CPF – Retirement Fund Or Tax In Disguise

The Central Provident Fund (CPF) is a comprehensive social security system that enables working Singapore Citizens and Permanent Residents to set aside funds for retirement.

Upoun closer look , the scheme resembles that of a percentage based taxation system which goes against the scheme’s policy statement.

THe term retirement fund means one has to consider the cost of living at a future date ( eg. Decades from present). The cost of living at retirement is often difficult to ascertain but inflation is guaranteed to drive up retirement costs.

If CPF deducted a percentage of a $1000 worker in singapore, His savings per month will be above $300-$400 ( including employer contribution). Assumign hsi salary remain constant, his disposable income will be estimated to be at $800.Due to the nature of how inflation works, his disposable income will be eaten up by inflation over the years. As a salary increase cannot be guaranteed, how does one retire comfortably decades into the future? The cost of living will be the same for all ( rich or poor) decades into the future. The rich may be able to afford better returns as they have more disposable income and CPF funds.

Is the CPF scheme designed to address this inflation? If the scheme considered this aspect, then CPF deductions will be in a fixed manner not according to percentage of salary as a percentage deduction rather closely resembles a taxation system , rather than catering for retirement.

A taxation system in the west works in a similar manner but the providence of benefits is different from Singapore. Are Singaporeans
able to notice this glaring flaw and mediocrity in the system?





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7 Responses to “CPF – Retirement Fund Or Tax In Disguise”

  • Whatever you call it:

    is definitely NOT a pension. Not the type of “pension” our senior civil servants enjoy.

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  • Meaningless To Dwell On:

    If government had not turned greedy it can still be a retirement fund.
    As of now, after LKY took control, CPF, just like HDB ,is a scam and Ponzi scheme.
    It can also be said as a tax scam that benefited the government and the greedy.
    There are also many hidden or indirect taxes.
    Call it whatever you like, it is not going to make any meaningful difference unless sinkies wake up to change the government.

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  • Diabolical Disguises:

    Well, if you consider what peanut monthly returns CPF will finally dispense you with – of your own savings – starting from your ripe old age of 65 [if you're alive then and beyond] with a sum calculated on a divisor of 30(yrs) x 12, then you’d find the overtly high income tax rates of other democratic industrialized nations East and West, to be much more benign when one realizes their superior social securities system (education, medical, old age pensions). Remembering we’re just one tiny city-state globally ranked 2nd in per capita wealth, something about our governance is manifestly amiss when Singapore’s labour median wages are the lowest in the developed world while costs of living here have skyrocketed to the apex of our burdens.
    Isn’t the CPF scheme not only not a bona fide means of retirement for ordinary workers in their greying years but indeed has been disfigured into a channel for sucking out our hard earned salaries through paying for grossly overpriced public housing leases, and the compulsory medical piggy-bank (that cannot even guarantee a comprehensive healthcare assurance).
    Do these highly questionable stratagems amount to a disguised national taxation program?
    Are the wealthy and super rich enjoying unjustifiably low taxation levels while the common mass of men and women labour on for mightily rewarded government officials who have openly embraced “trickle-down economics” and by virtue of their own machinations are now recognized around the world as one of the top crony-capitalist (unabashedly corrupt?) nations.

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  • oxygen:

    CPF IS IS NOT MY MONEY, so I am told. IT IS RIGHT – CPF is actually BACKDOOR TAX till I am 55, and after that, in reality of common law trust applications, IT IS THEFT OF PRIVATE PROPERTY (because there is no such a thing as trustee to mortality).

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  • Migrated to australia in 90s:

    The article is right. The CPF system is indeed a taxation system as it calculated from a percentage of yr income. The difference is that ordinary taxation systems provide the benefits like eg> free or subsidized healthcare costs, education or others and also a pension payout upoun retirement, CPF does not. it is a taxation system without benefits.

    GD Star Rating
  • 114:

    Only know how to que buy 4 D

    GD Star Rating
  • LIONS:

    It is daylight ROBBERY by PAPpy Brigand$.
    Lee Ah Long is no Robinhood.
    He robs the poor n gives to the RICH.
    COMMON SGS have been swindled big time!

    The pillage must be stopped!

    GD Star Rating

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