TR EMERITUS

The police have advised the Pilipino Independence Day Council that there are public order and safety concerns with the venue proposed for its celebration plans. Consequently, the organisers decided to cancel their event. I am disappointed in the Singapore Police Force. Instead of fulfilling its duty to protect law and order, it gave in to threats by bigots towards other members of the community, the same bigots our Prime Minister condemned for their intolerance. Instead of advising the organisers to hold the event elsewhere, they should have promised additional security if needed. What message are we sending to the Philippine government — that we are unwilling to protect its citizens? What is the message to foreigners who live and work in Singapore? When a police force tells the people it is supposed to protect that powers in the community are too big for it to control, it is plainly shirking responsibility. Daniel Sim Shao Qi * Letter first appeared in TODAYOnline (29 May). Editor's note: From an online search, we have found that Daniel Sim Shao Qi is a government scholar. He was awarded the Lee Kuan Yew Award for Mathematics and Science in 2008, in recognition of his academic achievements - http://www.nas.gov.sg/archivesonline/data/pdfdoc/20080821981.pdf. He was also among 30 students who were awarded a Singapore Government Scholarship in 2008. The Singapore Government Scholarship was introduced to allow greater flexibility for students who wish to keep their career options open. These scholars can indicate their choice of ministries to join after they graduate. They are also eligible for a Masters programme after they have completed their undergraduate studies - http://www.psc.gov.sg/content/dam/psc/annual_reports/PSC%20Annual%20Report%202008.pdf. According to his Facebook page [Link], Daniel Sim graduated from Raffles Institution in 2007 and later went on to study at the University of Cambridge. He is believed to be studying for his Masters at Cambridge currently.  Read More →

By MP for Hougang SMC, Png Eng Huat [Delivered in Parliament on 29 May 2014] Madam Speaker, every working class generation has a dream to look forward to and that is to be able to stop and smell the roses one day and retire. For our pioneer generation workers, the anxiety of not knowing what is to come after retirement was somewhat moderated by the anticipation and excitement of being able to finally collect their lifelong CPF savings in full at retirement age, which was 55 then. Before the introduction of the Minimum Sum Scheme (MS) in 1987, turning 55 of age is an exciting day for many retiring workers. For low wage workers who found it hard to save on their meagre income, those CPF savings could be their only life savings after 30 to 40 years of hard work. I have witnessed that excitement through the eyes of my father. Such excitement and anticipation no longer exist at age 55 for many Singaporean workers today. We are living longer and the statutory retirement age has been raised to 62. The re-employment age will be raised from 65 to 67 over time and the CPF draw-down age will follow suit. CPF savings up to the Minimum Sum will be locked up all in the hope of achieving retirement adequacy. I welcome the pledge by the President that the Government will enhance retirement adequacy to give greater assurance and peace of mind to all Singaporeans. But for Singaporeans attaining the age of 55 going forward, greater assurance and peace of mind are question marks. Minimum Sum I met a Singaporean who works 2 jobs to support his family. He said he is working hard as he wishes to perform his umrah next year when he turns 55. He had calculated that he can withdraw some of his CPF savings to help fund the pilgrimage to Mecca. The announcement on 8 May 2014 changed everything for him. The CPF Minimum Sum was raised from $148,000 to $155,000 thereby reducing his projected withdrawal by $7,000 – a big sum of money especially for someone who has to take on 2 jobs to make ends meet. In 2012, only 48.7 per cent of active CPF members were able to meet their Cohort Minimum Sum. With the latest increase, how many more CPF members like the gentleman I met will need to change their pre-retirement plans and how many more will need to do some serious financial planning for housing mortgage payments in the future? I am sure we have met residents who were caught by the change in the Minimum Sum at our MPS. While it is prudent to adjust the Minimum Sum every year to beat inflation, the way to achieving it should not rest solely with the members because the CPF scheme is a tightly regulated instrument. At this moment, the only way for most Singaporean workers to meet any revised Minimum Sum is basically to work longer and harder and nothing else. The goal of the CPF Minimum Sum Scheme is to help local workers meet their basic retirement needs. The CPF acknowledged that there are many ways that can help members achieve this goal, some of which are to live within one’s means, to invest wisely, as well to continue employment beyond age 55. To live within one’s means is something the Government cannot legislate. To continue employment beyond age 55 has already been legislated. So the missing component now is to invest wisely our CPF savings so that it can beat inflation. And that is a challenge as most CPF members may not have the technical knowledge and financial literacy to make an informed choice to grow their savings. This is something the Government can certainly help. The former Minister for Manpower had promised to look into this as well. Madam, while we want Singaporeans to work longer and harder for their retirement, it is also prudent to make our CPF savings work harder for us at the same time. The former Minister for Manpower said in 2007 that money place in the Special, Medisave and Retirement Accounts (SMRA) should enjoy a higher rate of return than the Ordinary Account. The current interest rate for SMRA is pegged as the yield of the 10-year Singapore Government Security (SGS) plus 1 per cent. This formula came into force on 1st January 2008. In the MOM website, it was stated that the Government will review the formula after 5 years, to fine tune if necessary. We have passed the 5-year mark. The interest rates for our CPF savings had not changed for the past 15 years. The call by the President to enhance retirement adequacy is certainly more than timely. The formula, including that for the Ordinary Account, should be reviewed so that our workers will have enough to retire on in an aging society. We need better SMRA returns so that our workers do not need to worry about not meeting the Cohort Minimum Sum every year and having nothing more than $5,000 or less to withdraw at age 55. Draw-Down Age This brings me to another issue – the draw-down age. The Workers’ Party believes that draw-down age should not be linked to the retirement age or re-employment age. I understand this issue has been debated in this House before. Whatever amount our workers can withdraw at age of 55 will be the last they see of their CPF savings if they do not meet the Minimum Sum until they reach the draw-down age. For workers born in 1954 or later, the draw-down age is 65. This draw-down age will be raised to 67 over time as the government intends to link it to the re-employment age. By doing so, it will leave no room for Singaporeans to decide how they want to live their lives after age 55 or upon reaching the statutory minimum retirement age. The President has said that the Government will strengthen safety nets to help the vulnerable and elderly cope with the vicissitudes of life. Madam, the vicissitudes of a working life begin at age 55 when the Minimum Sum kicks in, at age 62 when retirement kicks in and then a few years later when draw-down age kicks in. For workers who do not have any other form of life savings, these CPF savings are the only safety nets. Delaying the CPF payouts for these older workers may cause them undue anxiety and stress. Older workers on part-time employment may need such draw-downs to supplement their income. And not all older workers can work after age 55 or 62. As SMS Amy Khor had said on Tuesday, sometimes the spirit is willing but the flesh is weak. And for workers who do not have any other form of savings other than their CPF accounts, it spells trouble when ‘the spirit is willing but the flesh is weak.’ The Minimum Sum Scheme, before CPF Life comes into existence, is designed to last for about 20 years or until the member’s Retirement Account savings are depleted. The CPF Life, which is a better scheme, guarantees payout for life. Madam, our life expectancy at birth is 82.5 years. At draw-down age of 65 to 67, most members will probably enjoy about 15.5 to 17.5 years of payout under CPF Life; which is about 13 to 23 per cent shorter than the 20-year payout period under the old scheme although the payout under CPF Life is slightly more. Can we not allow a member to draw down on his CPF Life a little earlier then? When we are young, we need a disciplined instrument like CPF to help us save for the future. But when we are old, we need a more flexible instrument to help us plan for the uncertainties of aging. Issues like job security, health, mobility, etc. cannot be taken for granted anymore. The current CPF Life plans do not offer older workers the flexibility to plan for an early or semi-retirement. I call for a 3rd CPF Life plan to address this issue. This plan will give a monthly payout with no bequest, similar to the old Life Income Plan, but come with an early draw-down age of 60. This plan will give our workers a choice to go slow after age 60 for whatever reasons. Many pension schemes in OECD and Asia/Pacific countries do offer such “early age” withdrawal. Madam, we are an aging society. I urge the Government to look into providing more choices for older Singaporeans to access their CPF savings. Source: wp.sg/2014/05/mp-png-eng-huats-speech-debate-on-presidents-address-2014  Read More →

The government has just announced that the Minimum Sum in the CPF be raised to $155,000. If you take into account the Medisave in CPF, the total amount is nearly $200,000. If you do not have at least $200,000 in your CPF account today, you will not be able to withdraw any cash. The Minimum Sum and the amount in Medisave will keep increasing each year making it more and more difficult for Singaporeans to withdraw their own savings in their CPF account. Unless you belong to the high income earners, those lower income earners will never withdraw their own savings even if they work a lifetime. It is quite obvious to any thinking Singaporean that he will not be able to withdraw his life savings in his CPF account based on the following 3 factors. a)  Minimum Sum in CPF This Minimum Sum will keep increasing through the years. They say it is adjusted to inflation so that you could get a decent monthly payout when you retire. The fact that our wages are not increasing as fast as the increase in Minimum Sum means that we can never keep up. But if you are high income earners earning more than $10,000 a month, then it’s no issue. Fact is that most of us don’t earn that kind of salary. As such, your own money in your own CPF account is beyond your reach in that sense. When you reach 55 years, you can’t withdraw your CPF money cuz of the high Minimum Sum arbitrarily decided by the government. b)  Medisave This portion of your CPF can never be withdrawn in your lifetime. It is meant for medical expenses in the event you are hospitalized. The money will be transferred to your NOK when you expire. It is now more than $40,000. It is expected to be increased over time also. c)  HDB We know that HDB prices will also keep increasing. With housing loans stretching up to 25 yrs, by the time you finish paying your housing loan, a big chunk of your CPF is gone. Just to give you an example, my parents bought their 4-room A model in 1994 at only $101,000. Today, a much smaller 4-room flat easily costs you much more than that. The government will tell you about grants and more grants, but how many really benefit? If you are earning a decent salary, you are expected to pay your own flat. Do not expect easy grants since HDB flats are “affordable” to you. Due to the above 3 factors, a majority of Singaporeans will not be able to get their CPF when they retire at 55 yrs. That is why so many Singaporeans are very concerned about this CPF issue. It affects them directly especially those lower income wage earners. To arbitrarily impose a minimum sum (currently is $155,000) across the board for all Singaporeans is illogical and unjust. Those earning $1,000 to those earning more than $10,000 also subject to the same Minimum Sum simply doesn’t make sense at all. It is not justifiable at all given the fact that it is our own money. If it belongs to us, then we should be given an option. But as it is, there is no option at all. The government decides and justifies it without even bothering to seek your consent. Is it your real money? If it is really your money and the money really belongs to you, then you should be able to decide for yourself. Not someone decides for you and still insists that it is your own money. What sort of logic is this? There is so much frustration and anger when the government keeps increasing the minimum sum beyond the inflation rate until Singaporeans lost faith and trust. How to justify the increase in the minimum sum when it far outstrips inflation rate with stagnant wages due to the influx of cheap foreign labour? We know that our wages are so much lower than 1st world countries due to the influx of cheap foreign labour. I’m not going to expand on this area since I’m now talking about CPF. Another flaw is that the minimum sum doesn’t take into account healthy and fit seniors working till their 70s. Just look around you and you could see that there are tons of old people cleaning tables, toilets or selling tissue paper. My parents in their 70s are still working. That is a fact. How about those children who could support their aged parents? I’m sure providing 3 meals a day and a roof over their heads should not be a problem. In the event that the children do not want to support their aged parents, there is the Parents Maintenance law to fall back on. As such, the government’s argument that they should not be supporting unproductive seniors in the event that they do not have monthly payouts does not really hold water here. Most Singaporeans are now wondering why is the government so persistent in holding back our CPF money by drastically increasing our CPF minimum sum year after year? Amongst us, there are many who do not have CPF savings such as self-employed hawkers, taxi drivers, odd-job labourers etc. What about them? Will they perish when they grow old? There is an old blog post written by me about 2 yrs ago relating a true story about my ex-colleague’s inability to use his CPF Special Account to pay off his outstanding housing loan and he’s struggling to live on his meagre income. It is his money and yet he can’t decide to use it to pay off his remaining housing loan. That post went viral recently with more than 5,000 hits in a day when that blogger got sued for defamation. Netizens Google about CPF and found my old blog post. [Link – Click here to read] It is no longer an issue between that blogger and the PM. The case has generated so much intense debate and discussion that even some ministers and MPs are coming out openly in concerted effort to explain their official position. That blogger has inadvertently kicked the hornets’ nest. It is not going to rest but the frustrations and anger will surely escalate. You can shut him down but you can’t shut off those heartlanders still talking in the coffee-shops. As it is, I’m sitting at EM coffee shop writing this blog, I can hear residents discussing about the CPF issue. I’m not going to repeat what they are saying cuz some of those comments are simply unpublishable here. As far as I’m concerned, I do not care if the government uses my money to invest and make tons of money. After all, the government guarantees me 4% on my special account or 2.5% on my ordinary account. It’s just like borrowing money from the bank to invest. If I make lots of money, do I have to share with the bank? Even though in this case, I got no choice but let the government use my CPF to invest in whatever way they deem fit. Do not forget that the government has no money by itself. The money comes from those living in the country. If the government is rich, it could do lots of things like investing heavily in infrastructure, defense, better schools and hospitals etc… But pls don’t squander our money on Children’s Games or building a luxurious Club exclusively for the maids! Let the government make the money through our combined CPF savings but pls be more transparent and truthful. Return us our CPF when we reach 55 yrs. That’s what our late Dr Toh Chin Chye – ex-DPM said in parliament before. How I wish we got leaders like Dr Toh or Dr Goh in government today. Do not simply keep on increasing the Minimum Sum to deny us our own life savings. Give us an option whether to withdraw our CPF or leave it there for safekeeping to earn interest. If it is so attractive to keep our CPF with the government, I’m sure many will do it willingly. Denying us to our own life savings in our CPF will definitely ignite the time bomb. That is the crux of the matter. To be fair to the PM, he has sued many bloggers before. But did he proceed to take full legal action against them? Many a time, the PM stopped short of taking them to court except in this most recent case. Why make that blogger a martyr? There is nothing for him to lose and much more for the PM to lose. At most, the blogger is declared a bankrupt but he has just awoken the masses. I believe the PM is in a dilemma. To go all out or to pull back? That’s the question? CPF is one of the pillars of our nation. It is now under attack. How is he going to handle it? If I were the PM, I would try to open up and be more transparent. Most importantly, give Singaporeans a choice or an option. With that, there will be no more issue. Why go against the flow of the current or against the wind direction? Ours is a democracy where one man one vote will decide the government of the day. This government, compared to many other countries in the world, has done very well so far albeit imperfect in certain areas, and should not let the CPF issue be it’s Waterloo. Remember the CPF issue affects every Singaporean. It is an issue closest to their hearts. It is a time-bomb that needs to be diffused as quickly as possible. As it is, damage control is in place with so many Ministers and MPs speaking out and making comments but they still fail to address the root cause of the CPF issue. I’m merely stating my own opinion on the CPF issue. I believe as a true-blue Singaporean, I’ve got the right to my own view on this controversial issue where every mother’s son is talking about. Let’s hope that the government will heed the comments, opinions and cries of Singaporeans. It is in their interests to do so. Gintai_昇泰 * The author blogs at gintai.wordpress.com.  Read More →