Are Singaporeans Guaranteeing the Returns and Funding the Losses of GIC and Temasek Holdings?

The Worker’s Party’s Gerald Giam had asked “DPM Tharman Shanmugaratnam on 4 August 2014 in Parliament regarding the Government’s “net assets” and how the returns from the reserves managed by GIC make their way back to CPF members.

Are Singaporeans Guaranteeing the Returns on Our CPF by Ourselves?

Tharman had said, “The CPF Board invests CPF members’ savings in Special Singapore Government Securities (SSGS), which are guaranteed by the Government,” and that, “GIC manages a major part of the Government’s funds, including those derived from long-term liabilities such as SSGS.

Tharman also said, “GIC has achieved good long-term returns to date. However, as investment markets are uncertain and volatile, GIC’s returns over shorter periods could be low or even negative. The Government is able to absorb these short-term market risks, because it has a strong balance sheet. It has a substantial buffer of net assets that enables it to meet the obligations on its liabilities, including its SSGS commitments.”

However, if the government’s “strong balance sheet” and “substantial buffer of net assets” also comes from Singaporeans’ CPF and HDB, then is it the government that is guaranteeing the returns on our CPF, or are Singaporeans actually guaranteeing the returns on the CPF by ourselves?

Then, are Singaporeans guaranteeing the returns on GIC as well?

If so, shouldn’t whatever returns earned by the GIC using our CPF be returned to Singaporeans?

Are Singaporeans Funding the Losses of GIC and Temasek Holdings

Gerald Giam asked Tharman, “specifically on the eight years in the past 20 years where GIC’s investment returns were below what the Government pays on SSGS, were these shortfalls funded from the Government’s net assets or from the GIC’s assets?”

Tharman replied: “And as for the eight years within the last 20 years, which was what I had stated in response to Mr Gerald Giam’s question at the previous Sitting – just to reiterate, that is eight years in the previous 20 years ending 2013 – that is when in fact the GIC’s returns on the total assets that it is managing fell below the SSGS rates. That by definition would have meant that net assets would have been lower than otherwise because the Government has fixed obligations on its liabilities, and because of the fluctuations in returns on its assets.”

However, did Tharman answer Gerald’s question and are the “shortfalls funded from the Government’s net assets or from the GIC’s assets”?

Earlier on, Tharman had also said, “GIC is managing Government assets. It is not GIC’s assets. GIC is a fund manager, so the assets are assets on the Government’s balance sheet, rather than on the GIC’s balance sheet.”

Thus if the GIC does not have any assets of its own, does it not mean that any shortfalls are funded by the government’s assets?

And since the government’s assets are also made up of our CPF and HDB value, does this not mean that Singaporeans are funding the losses of GIC from our CPF?

If so, when GIC and Temasek Holdings lost $117 billion in 2008 or 77% of the $151 billion value of our CPF at that time, did the government increase the CPF Minimum Sum to fund for their losses?

#ReturnOurCPF 3 Protest on This Saturday 23 August 2014 at Hong Lim Park

Come down to the #ReturnOurCPF protest this Saturday at 4pm at Hong Lim Park. You can join the Facebook event page here.

Return Our CPF burning rose poster

Return Our CPF sun poster

Return Our CPF burning sun poster

Return Our CPF 3 Poster Part 2

Return Our CPF 3 Poster Part 2 chinese


  1. Money flow

    Look at money flow. Not balance.
    In good years and bad years, GIC/government simply issue more bonds to “pay” for the CPF interest. Tharman avoided saying this so explicitly.
    “That is when in fact the GIC’s returns on the total assets that it is managing fell below the SSGS rates. That by definition would have meant that net assets would have been lower than otherwise because the Government has fixed obligations on its liabilities, and because of the fluctuations in returns on its assets.””
    That is what “net assets would have been lower” means. More bonds are issued to CPF to “pay” for interest, without a corresponding increase in asset in GIC.
    So CPF is guaranteeing a steady stream of billions of cash dollars every year for the government to “invest”. In return the government issues a steady stream of AAA rated bonds to CPF.

    To put it simply, when you cannot repay Ah Long, you just issue more “I owe U” to Ah Long. This Ah Long is very good, Interest, principal, new money all can be repaid by more “I owe U” papers

  2. jasmine

    Now we can see why foreign entities such as S&P and Moody like to give AAA rating to Singapore government. Because the debt is local, not foreign. Debt that are not foreigners to bear and foreign investors do not have to fear of losing their money because what Singapore government did is to owe Singaporeans money to the tune of 111% of GDP. All local debt. If anything happen, the PAP can just print more money and foreigners are still not going to be affected. Singaporeans will be the daft ones to clear the mess PAP created. Foreigners do not have to fear. Contrast this to USA where most debts are foreign. Their QE1,2,3 forces everyone to share their burden whereas Singapore will meet the fate like Iceland once the party is over.

  3. say truth

    Everything coin as long as in the name of every person, has the full right to get it back, do not join their plan. they can not force us . they only can open to those who want to join them. how much benefit to them, but for us, no benefit, only bitter and bitter , we appeal any of international help , get back our life . we suffer too long, every day in the countdown to death,

  4. Oracle - What Will You Do ??

    If an Opposition party says they will return all our CPF money back to us when we are 55 years old.
    – Will you vote for this Opposition party?

  5. When Singaporeans Give Up On PAP

    “If you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater the effort the heavier the world bore down upon his shoulders—what would you tell him to do?”
    “I…don’t know. What…could he do? What would you tell him?”
    “To shrug.”
    Like Atlas, I think it is time for all of us to shrug our shoulders.
    Give up on PAP.
    And rebuild our Singapore around a new group of political leaders.

    It’s time to stop sacrificing our time and lives in order to help make stupid PAP policies workable.

  6. Deaf Frog's Toothpick

    basically it’s the taxpayers guaranteeing CPF return rate when the GIC fails to reach the investment target.

    some questions that interests me are,

    1. if that is the case, where is the incentive for GIC to perform when it knows that whenever it fails, there will be the taxpayers to bail them out?

    2. how tempting is it for the government of the day to increase the taxes in order to generate the cash flow to offset poor performance by GIC?

    3. in “good” years where the GIC performs above the target, they keep the surplus$$, but in “bad” years the taxpayers is expected to come in to “subsidise”?

    is it a case of: i win – it’s mine, i lose – it’s on you?

    in “bad” years, shouldn’t the GIC payout from their capital to make up the shortfall instead?

    4. take the public transport companies for example, train segment making money, bus segment making loses, instead of allowing the profit from the train to subsidise the buses, government decides to to let the companies “amputate” the loss making bus segment and sell it back to the government.

    then we accidentally create this unforeseen dilemma for ourselves, of figuring out whether the taxpayers should subsidise or the commuters should pay higher fares.

    if taxpayers should subsidise, the bogeyman of higher taxes comes into play again?

  7. Deaf Frog's Toothpick

    i do have a slight disagreement with Roy when he says: “If so, shouldn’t whatever returns earned by the GIC using our CPF be returned to Singaporeans?”

    i do not know how much of then returns is implied, is it 100%?

    if the value is 100%, i think it’s not realistic.

    it’s better to make the GIC more transparent on it’s operational cost, so that we can have a full debate in parliament to determine a reasonable sum to pay GIC for managing the money.

  8. khong heehee

    Xtron is like GIC. When people ask about GIC, government will tell them it is national secret. Similarly, church members should not ask too much about Xtron.

  9. Tom

    thank Roy,
    thank God for giving our children wisdom,
    form of government. The media won’t let there be any cover-up. but except Singapore, As so happens with CPF scandals, it isn’t the original scandal that gets people in the most trouble – it’s the attempted cover-up.

    Some people think that the truth can be hidden with a little cover-up and decoration. But as time goes by, what is true is revealed, and what is fake fades away.

    so cover up the truth is a crime, If today there is no way to give them a sentence, but one day, there is a criminal law in wait for them.









    上述表明,从独裁统制下获得解決最终取决于人民的力量。當人們當家作主的時候, 才來考慮把貪污獨裁者送入監獄的時間表。

  11. teoenming

    Singapore Minister Mentor Lee Kuan Yew and Prime Minister Lee Hsien Loong Want Teo En Ming Dead

    Singapore Minister Mentor Lee Kuan Yew and Prime Minister Lee Hsien Loong want Teo En Ming dead. Lee Kuan Yew and Lee Hsien Loong want Teo En Ming to die young. I am only 36 years old. I do not want to die young. I want to live to a hundred years old and beyond!!!

    Teo En Ming has filed an official complaint against the Singapore Government at the United Nations Human Rights Council Branch and the International Criminal Court. Read the letter here:


    Teo En Ming’s Open Letter (Plea for Medical Help/Assistance) to World Leaders dated 27 Aug 2010. Read the letter here:

    Mr. Teo En Ming (Zhang Enming)
    Singapore Citizen
    Republic of Singapore

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