Why CPF failed in its mission

Singaporeans save a large part of their earnings in the Central Provident Fund, including the contribution from their employer.

But they do not have adequate savings for their retirement needs.

What happened? What cause this leakage?

Here are my perspective.

a) A large part of the savings is put aside in the Medisave account and used wastefully for medical treatment and insurance. They make the medical providers and the insurers rich, but make the workers poor.

b) A large part of the savings is used to buy an expensive leasehold property that will start to depreciate in value after 40 years and will eventually have no value at the end of the lease.

c) The interest rate payable by CPF is quite low, at 2.5% for some of the savings and 4% for others. These rates are below what can be earned on long term investments.

d) The approved investment schemes have high charges and poor investment performance. They do not give a good return to the workers, but make a good profit for the financial institutions.

If the CPF is operated purely as savings for retirement, similar to the superannuation funds in Australia, the workers would have get a much better return for their savings.

Sad. But the CPF is now a broken down scheme.

What can be done to correct the flaws? Here are my suggestions:

a) Stop Medisave and the insurance schemes. Introduce a single payer system that is done by many countries.

b) Let workers pay for their housing outside of CPF. They can use the money to buy a flat or to rent a flat, according to their needs.

c) Change CPF to be savings for retirement, similar to the superannuation schemes in Australia.

In other words, roll back CPF to what it was before 1968.

 

Tan Kin Lian

 

 

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24 Responses to “Why CPF failed in its mission”

  • patriot of TUMASIK:

    Tan ahhh!!! CPF is long dead…NOTHING can be done most if NOT all are locked up in homes and forced payments for other items according to the whims & fancies of the shitHOLES!!! with withholding payouts @ the Blooming Bastard’s discretion…

    Destroy the Dynasty and DECIDE where we can go from there!!!

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  • Went to Japan:

    I think everyone sort of know the problem but they still vote PAP.

    As long as they are incharge, we will expect more changes that dont benefit us.

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  • Regime change is the solution:

    Correct analysis but wrong solution. Why? Because what is suggested as a solution would mean admitting LKY and PAP made a big mistake. Did LKY and PAP ever admit they made a mistake? The solution needs a fresh start free from any “baggage”. Regime change is therefore necessary.

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  • oxygen:

    MY AUSSIE SUPER ACHIEVED AN AVERAGE ANNUAL RETURN exceeding 8%, so the CPF return in LEE-jiapore in my mind is chicken sh*t of return in comparison.

    In decades gone by, my Sinkieland CPFIS earned me a fair chunk of return which paid for many of my holidays – in those days, profits from CPIS can be withdrawn for spending enjoyment.

    And CPFIS allows only investment in SGX-listed “trustee stocks” (dividend paying) – IDIOTS. Had CPF a/c holders are allowed to invest all their CPF money in physical gold at US$220 per oz in around 2002, the profits today at US$1285 p. oz is phenomenal. When bureaucrats decides how and what you can invest in, they are playing GOD when the reality is that they are more likely than not, STUPID TO INFINITY AND NOT KNOWING THEY ARE THAT STUPID.

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  • Bobo:

    We never have hope in whatever PAP do. After decades of hard life, we still end-up from poor, poorer to poorest people. China and India are moving forward better life for her citiznes. Singapore is moving towards poorest life for her citizens. WTF.

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  • do our part:

    get voted in then can talk.
    PAP holds the keys to every thing under our sg sky.
    citizens too need to do their part or else talk n talk till the cows come home oso nothing will come of it.

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  • Opposition dude:

    Ha ha ha, CPF failed because PAP got too greedy for money and so changed it with all the rules so as to make more money.

    Sure the kiasees love to grumble about not being able to take out all their CPF but at the end of the day they won’t have the guts to vote opposition.

    So might as well let them continue grumbling lor!

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  • RDB:

    Quote article:
    Thank you for your views.
    “If the CPF is operated purely as savings for retirement, similar to the superannuation funds in Australia, the workers would have get a much better return for their savings.”
    ======

    Please don’t get me wrong. But the above sentence reads correct in time frame without the “get” after the words “would have”. I was confused as towhat it was trying to convey. Likely an inadvertent grammatical error.

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  • C’est la vie:

    *****
    CPF has been made impotent, … when all of its spunk and virility has been removed, to service other non-pensionable related needs !!!
    ***
    *****

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  • CPF Trustee no trustee lah:

    CPF Board is by law the trustee of our CPF money.
    But they don’t act like trustee. No. 1 failure. This leads to all kinds of failure.

    The Board simply pass ALL our money to MAS, and let MAS (PM) decide the interest rate.

    Have any people ever heard of this kind of investment strategy? If banks invest like CPF Board, they would all be bankrupt. If MAS/Temasek invest like CPF Board, they too would be bankrupt. If GIC invest like CPF Board, it too would be bankrupt.

    Failure to fulfill their legal obligatory duty.
    All pioneer, merdeka and future old Singaporeans suffer and will suffer because of this failure.

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  • James Lee:

    Both the PG and MG have been taken for a really damaging ride into their retirement.If the present 4G leaders are sincere in their praise and appreciation for the contributions made by these seniors to nation building,then those in the corridor of power in the govt should help provide the following to all PGs and MGs:-

    1) Fully subsidised basic hospitalisation and health care.The government can save on the usual medisave top ups and medical subsidies.

    2)Because of 1) above,the moneys in their Medisave Account amounting to more than $30,000 can be released to meet their retirement needs.

    3)Unconditionally give a monthly payment of S$500/= to all PGs and MGs to further boost their standard of living for their remaining life span.

    4)Waive all charges and fees for the Singapore Passport for all seniors.

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  • LIONS:

    When a govt eyes the retirement savings of ordinary like how the PAP gahmen eye ours,you better think carefully before you give them your votes.
    By blindly giving them your precious votes,you are asking them to $uck you dry.

    This govt is uncaring beyond all hope.
    Their policies are oredy making life hard for the PEople;yet they want to suck your CPF money.

    Sgs have themselves to blame if they choose to remian foolish.

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  • William C:

    It is not true Sinkies have a lot of money in their CPF. Most are taken away to service the HDB loans. They are asset rich but CPF poor.

    This is why the topic of CPF don’t most are not bother about it. From what I know, those below 40 are in the cohort.

    CPF has failed totally. It just a middle man transferring all contributions today to HDB tomorrow. Nothing left except the locked SA and Medisave

    Even those with money in CPF, most upgraded to private properties. Again asset rich and CPF poor.

    PAP will win every general election began all don’t want the property price to go south.

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  • Kangkor:

    Do not any how sign investment scheme using cpf.

    The VP of dbs can transfer all(oA and SA)
    Cpf to investment company.be
    Careful.vice presdent(vp)dbs no need verification you allow a not one.

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  • Asd:

    Property price is easy to control la…

    Just have to control the new hdb price and all will follow…

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  • Why CPF failed:

    Reason is very simple. Wrong folks in charge.

    1st generation leaders had it right. Then came 2nd generation seat warmer who started the rot. Next came 3rd generation who cemented the rot.

    Spore needs New Leaders, and need them fast. 70% sheep slumber hurts only itself, and its own children and grand children.

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  • HarderTruths:

    Hey look!

    More Korean PMET’s are coming to help us with CPF! Hooray!!

    https://sg.yahoo.com/news/south-koreas-latest-big-export-jobless-college-graduates-234138438–business.html

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  • nihon:

    con peoples funds.

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  • ganeshsk:

    JUST BOOT THE PAP OUT AND GET A G THAT WILL LISTEN TO THE CITIZENS.

    THERE IS ABSOLUTELY NO OTHER CURE FOR SHEER ARROGANCE.

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  • Disagree:

    Why CPF failed:
    Reason is very simple. Wrong folks in charge.

    1st generation leaders had it right. Then came 2nd generation seat warmer who started the rot. Next came 3rd generation who cemented the rot.

    Spore needs New Leaders, and need them fast. 70% sheep slumber hurts only itself, and its own children and grand children.

    The 1st generation gets credit when they should be getting blame.
    They too pay bank interest rate for CPF and they hijack our CPF money for government use. There was NEVER any thought about enhancing CPF returns through proper investment so that we will have a good retirement.
    1st, 2nd, 3rd, 4th all the same. ZERO thought about proper investment of our CPF money. All hijack our money for government use.

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  • forced savings:

    why hor ??? forced savings lar and then rent-seek from there lor – housing paym, healthcare paym, insurances (how many types of insurances ????) also, min sum (keep changing ???), withholding period (keep changing ???), etc, etc.

    don’t know what the white monkey idiots will think of next of including certain payments of services will come from there ???

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  • oxygen:

    @ CPF Trustee no trustee lah

    EXACTLY MY THOUGHTS TOO. How can the rate of return paid to CPF members – adequate or inadequate, fair or unfair – decide by an administrative decision, NOT BY ACTUAL MARKET RATE OF RETURN IN COMPETITIVE CONDITIONS?

    CPF Trustee no trustee lah: CPF Board is by law the trustee of our CPF money.
    But they don’t act like trustee. No. 1 failure. This leads to all kinds of failure.

    The Board simply pass ALL our money to MAS, and let MAS (PM) decide the interest rate.

    Have any people ever heard of this kind of investment strategy? If banks invest like CPF Board, they would all be bankrupt. If MAS/Temasek invest like CPF Board, they too would be bankrupt. If GIC invest like CPF Board, it too would be bankrupt.

    Failure to fulfill their legal obligatory duty.
    All pioneer, merdeka and future old Singaporeans suffer and will suffer because of this failure.

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  • Singaporean Kong Come.:

    Correct analysis but wrong solution, From the British time is correct analysis, they will pay U at age 55. Wrong solution is from the stupid people.Mandate them with absolute power again n again. let them abuse the process take this absolution power to delay your paying, came with uncertainty of changes.

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  • Dear @Asd:

    You might just stumbled upon an unlikely CONSPIRACY THEORY !!!!!!!!!!!!!!!!!

    80% of dwelling are controlled by ONE SINGLE entity. If that one entity priced 80% of dwellings low, the REST OF THE 20% cannot go very much higher.

    If these 20% dwelling can’t go high? who are the people will collect less $$$$$$$$$$ ???????? (Note: “What’s wrong with collecting more money?”)

    Wow ! Wow ! wow !

    Are you talking about this direct logical correlation-ship?

    Asd:
    Property price is easy to control la…

    Just have to control the new hdb price and all will follow…

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