Why do they have to come up with annuity scheme?
Why do they have to increase the CPF minimum sum?
Why do they have to come up with draw down age at 62 years old?
Old folks used to be able to draw out all their ordinary account
when they reach a certain age around 60++.
http://mycpf.cpf.gov.sg/Members/Gen-Info/Sch-Svc/S-and-S.htm#retirement
It's simple. They realised that their future payout is
increasing drastically, that's why they need to restrict
members full withdrawal of funds, else if they should make all
these payouts, it will result in an increase in money supply,
leading to more inflation (that is if they don't liquidate all
their investments overseas). It's not about old folks spending all
their money in Batam, though there are cases like these, but I
think it's in the minorities, not all Singaporeans behave this way.
It's a media propaganda campaign to brainwash the majority.
If you look at the latest CPF Annual Report, the balances in
member's accounts are as follows:
Above 60 = $9.7 billion
55 - 60 = $14.8 billion
50 - 55 = $24.9 billion
As it progresses each 5 years, the liability of CPF to repay
it's members gets substantially higher. The only way to make good
these liabilities is to get money from MAS. The money which were
contributed by members has been transferred from CPF Board to MAS,
thereafter the loan was made to Temasek. Temasek current portfolio
consist of Singapore companies and overseas companies, some of
their major overseas investments have not made good returns. If
they were to sell some of their investments, the losses will be
quite substantial.
1) The only way that MAS could
contain the inflation is to ask Temasek to liquidate it's position
overseas or locally, so that it could make good the loan given to
it by MAS. (aka sterilized foreign exchange
intervention)
2) Otherwise, MAS will have to
resort to increasing the money supply without sterilization. Which
will inevitably lead to a higher inflation rate for
Singapore.
3) Else, they will have to delay
the withdrawals of CPF members by increasing the draw down age,
minimum sum and annuities. This method will ensure that Temasek,
GICs and GLCs will not have to liquidate their overseas investments
suffering a loss, while at the same time placating the
retiring CPF members.
This is like a foolproof plan, even if opposition's win the
majority vote in the next election, they will have this headache
left by the current ruling elites. There's a term in
investment that describes this situation, it's called "the Winner's
Curse". 
**This is just my opinion based on my knowledge, as with any
opinion, it could be wrong or right. So readers will need to
exercise due judgement.
