A Classic CPF Horror

last SG · 2008-01-22T23:38:01+00:00

So sad. After you retire at 55, you can't take out your all your CPF monies. Instead, they "persuade" you to delay withdrawing CPF to an even later date so t...

HyperFocal SG

http://www.littlespeck.com/informed/2006/CInformed-070922.htm

CPF changes
An uncle's woes
He writes from the heart how his elusive savings promised for 55 had eluded him even when he was laid up.
Sept 22, 2007

This anonymous bloger posted this letter when commenting on "CPF Lies - The very blackest kind." by Kenneth Tiong
http://freedom-for-man.blogspot.com/2007/09/cpf-lies.html

Anonymous said,
Hi Kenneth,
Quote from ST, 20 Sept 2007:

"To a question by opposition MP Low Thia Khiang (Hougang) on whether the Government of Singapore Investment Corporation (GIC) uses funds from the CPF funds to invest, Dr Ng said: "The answer is no."

"Later he rose to add: "The relationship is not so simple".

I could not believe my ears and eyes! Far as Im concerned, its a STUPID EVIL (moderated)!

I watched a video of parliament and I saw Hen (Manpower Minister Ng Eng Hen) denigrating a nation by mocking his own and other MP's, violating and belittling the intelligence of Singaporeans, insulting uncles like me for being too dumb to handle our finances, saying, "having a fling here, having a fling there".

I cannot believe that an overpaid manpower servant that we pay with our taxes thinks so lowly of his fellow citizens! A case of kurang ajar or, in the hokien dialect which is pretty popular in Parliament now, kiam kah!

If I remember well, when I started work as a teenager in 1968, I was told by my boss that 25% of my pay will go to CPF. He will contribute 25%. My boss said, Thats law, dont worry. Government guarantees youll get it all back when you retire at 55.

On reaching my retirement goal/age of 55, I was shocked that they have moved the goalposts many times since I started work at 1968. My money wasnt my money anymore.

Yes, there's Special, Medisave & Retirement Account - SMRA - "You can't touch these!" A hip hop/rap song?

To be fair, I received my yearly CPF statements of the changes, but who reads? I did not.

Eight years ago I had a heart attack and ventricular fibrillation. I was jobless for seven years. Lately, I was suspected of having other health challenges and in the past months, I had my share of visiting polyclinics and hospital.

Poor rich! I'm rich enough to have more than $28,000 sitting in my Medisave Account BUT I cannot use it for tests, treatments and medicines in hospitals and polyclinics.

Yes, my bills from Changi General Hospital and Polyclinics had to be paid in cash from my pocket.

Oh, they tell me I can only use it if I spend more by visiting the hospital again for an artery ballooning/stent or a by-pass procedure.

Or maybe another heart attack and ventricular fibrillation caused by the agony and heartache of My Money Sits in CPF but Cannot Use For Staying Alive!; They Use my $$$, Make A Profit, Dont Pay Back, Then Say I Stupid & Not Enough, Want Some More, Force Annuity On My Children!

Since nobody wants to employ a sick geezer with a heart condition and other challenges, I am fortunate that a kind soul, having faith, love and trust in me, offered me a sum of money to start a little business last year.

I registered a sole proprietorship in ACRA to start the little business. Another heartache - I was informed that I could not register because I owed CPF Medisave which I did not pay when I was self-employed previously.

Unless I pay up, I could not register my little business.

Imagine, I was broke and I still had to top up my Medisave (already loaded with >$28,000) if I wanted a licence to make myself productive again. Simple: No Top Up, No Licence. This is what I know as Uniquely Singapore First World Standard of Whatever!

Another irony: After seven years of joblessness (due to my health challenges) without paying tax, I made good enough to pay tax again for year ending 2006. I've done my part as a citizen, I even did NS in the army from 1969 to 1971.

"Fend for myself"? I have. I pledge myself as part of a united people regardless of race language or religion to build a democratic society based on justice and equality so as to achieve happiness, prosperity & progress for our nation.

As a simple heartlander, Ive done my tiny part. No worries, I may just jump in front of moving MRT before I bother my busy hardworking government with any problem.

Question: What has the Government done for me? Zilch. . . and please dont do anything.
Whenever you do something for the good of the people, you cause me more pain than gain! Eg: PUB increase, 7% GST, Bus fares increase, etc. Just dont hurt my family further by forcing my children to pay for annuity which is another scam to leech from innocent citizens!

On second thought, you may want to upgrade my HDB flat with a Go-And-Die-Chute so that sick and old people like me who have outlived our usefulness to the regime can self-destruct by jumping into it.

Health Minister may like this idea as he wants me to die at home so that I will not be a bother or a burden to his money-making hospitals.

Based on the video, Mintsters just give us plenty of sarcasm and zero empathy. Just Mr. Hen talking cock!

Another wayang, another days work to justify obscene million dollar pay! The more they "strengthen the CPF", the worse our lives become.

... Please, denigrate us no more and stop treating Singaporeans like idiots! Let us live with dignity. Just because we are peace loving citizens does not mean that you can walk all over us.

Trying your luck too far may just change a push to a shove. Yes, even peaceful monks can turn into citizen activists. They are at it in Myanmar!

Do whats honourable - Simply explain the difference in returns of GIC, Temasek and my hard earned CPF. Come clean with transparency!

My problems may have been less if the returns in my CPF had been on par or better than Malaysias EPF. Maybe part of the interest that could have been mine has ended up in the purchase of Manchester City Football Club. Am I co-owner now?

Thanks Kenneth for igniting the fire of a sick and tired Singaporean to write something on this disgraceful state of affairs
Sincerely,
Feed me to the Fish

http://freedom-for-man.blogspot.com/2007/09/cpf-lies.html

maurizio13 SG

The investment that the government uses to invest is not DIRECTLY from the CPF.

The CPF loans member's money (at low interest rates) to MAS, then MAS loans the money to Temasick, GICs and GLCs.

It's not a direct relationship, therefore they can deny using CPF members money to invest.

HyperFocal SG

... a clever use of words, but ethics remains blackened...

maurizio13 SG

Therefore, if your dad gives your mom a loan and your mom loans the money to you.

When I asked if the money you loan is from you dad, you can deny it. Only one intermediary is required to circumvent the relationship.

Laughing

I think they make a mockery out of the system.

HyperFocal SG

http://www.iht.com/articles/2005/05/13/yourmoney/mfunds14.php

Funds: For many, a paltry payoff from Singapore's savings plan
By Wayne ArnoldPublished: SATURDAY, MAY 14, 2005

As President George W. Bush tries to persuade the U.S. Congress that some Social Security payments should go into a personal investment account, the island state of Singapore is grappling with an extreme version of what he has proposed.

Singapore's national pension program places every penny a worker contributes - 33 percent of total pay - into a personal account. Workers can choose whether to accept a guaranteed deposit rate from the government or chase higher returns in the property or stock markets. Called the Central Provident Fund, Singapore's program has succeeded in increasing home ownership and virtually eliminating the cost to the government of funding retirement by taxing the young.

But is the fund adequate for retirement? Not according to Leo Lim Tong, who after working 16 years as a hotel cook finds himself at 60 embarking on a career as a security guard at a local shopping center. The returns on the fund, known locally as CPF, he said, are "only a little bit, not enough."

Nor did it work for Shu Ting Hoe, a career banker who retired at 57 thanks to an early retirement package from his employer. "Depending on CPF alone, it's not enough to retire," Shu said.

When the governing party took control of a newly independent Singapore in 1965, it rejected the idea of a welfare system that would drain public coffers and adapted the fund system left by the British, expanding it to channel savings toward social goals.

doesn't purport to have a perfect system," Ng Eng Hen, the manpower minister, said. But he disputed the notion that the CPF provided inadequate returns.

Workers contribute 20 percent of their salary and their employers the equivalent of 13 percent, all of which goes into three accounts, including one for medical insurance and health care. Once workers reach the retirement age of 62, they can either take their savings as a lump sum or begin drawing it down in installments. If they have saved more than a minimum set by the government, they can begin withdrawing at 55.

The government pays a guaranteed interest rate on fund deposits that works out to about 3.4 percent. Depositors can also invest their savings in mutual funds, insurance products or, to a limited extent, in individual stocks. Whatever they contribute, as well as any interest or profit earned on their money, is tax-free.

Mukul Asher, an economics professor at the new Lee Kuan Yew School of Public Policy here, estimates that as many as 75 percent of fund members end up without enough to retire on and that the fund delivers on average less than 30 percent of the average depositor's last salary. That compares with 70 percent in France and 45 percent in the United States.

Economists say the government uses the fund as a fiscal tool, periodically changing the contribution rates the way a central bank changes interest rates. In the 1980s, the government pushed contribution rates as high as 50 percent to fight inflation. After the Asian financial crisis in the late '90s, it halved the contribution from employers, to 10 percent, effectively giving the entire country a pay cut.

Allowing members to withdraw their savings for such government-ordained investments opens another hole in retirement planning, economists say. Asher calculates that 70 percent of all funds deposited end up being withdrawn, often to buy property. In the 1960s, to enable its population to move out of slums, the government began allowing citizens to withdraw CPF savings to buy public housing. Singaporeans today withdraw more to pay for property than they do for retirement, a situation that leaves many asset-rich and cash-poor. Many are loath to sell, economists say, because property values have fallen by roughly a third in the past decade.

Ng said that most elderly property owners were sitting on profits that could fund their retirements. Cultural pressure to own and pass along a home dissuade many from selling, but "they can live with their children," he said.

Although caring for the elderly is part of traditional Asian values, critics of the system say relying on the young to care for the elderly amounts to just the kind of generational tax that Singapore's system was supposed to avoid.

Perhaps the most worrisome feature is the record on Singaporeans investing their own funds. According to Asher, CPF members on average lose 15 percent on their investments. When they pick individual stocks, they lose even more - about one-third.

pwnz0r SG

very sad story... and very true to what many singaporeans' suffer.

i wonder how long more will we suffer in 'silence' and not take remedial action.

i really wish that an opposition party can put together a good campaign tackling all these issues.

i wonder why CPF has such inflexible policies forcing the hardship of our own citizens.

maurizio13 SG

A recent case that happened to my friend's mom.

My friend's mom needed to go for some endoscopy, which entails inserting a tube from the mouth into the stomach and intestines to look for ulcerations or growth. Apparently they can't perform the normal endoscopy procedure on her because her intestines were too convoluted (criss cross all over).

They recommended her some procedure which entails swallowing a pill to track the passage thru her intestines. The procedure would take 24 hours, she would need to wear a special suit during this 24 hours.

The cost of the procedure was approximately $2,000. The PUBLIC hospital refused to let her pay for this procedure using Medisave, they insist that she has to pay for it using Cash. The reason being, the public hospital does not have this particular equipment, therefore they have to lease it from a private hospital.

Isn't the money in our Medisave an equivalent form of cash?

My friend's mom has some money in her Medisave but little cash.

extrinsic SG

all leave sg. take all cpf away. 101% govt will die.
econ burst, sg sink. leave it to FT and ministers, they can handle.

HyperFocal SG

... when it comes using the money in one's Medisave, they will dish out all sorts of kock & bull stories and or excuses ....

maurizio13 SG

I feel sorry for my friend's mom, I mean isn't the money in her Medisave equivalent to cash. All they had to do is deduct the money and use it to pay for the equipment leased from a private hospital. But instead the insist that she pays cash, the family is not financially well off.

Lin Yu SG

pls....they are try to help.....just in case you get ur money and laid them in the casino table in one try
Laughing

de_middle SG

really classic Laughing

fishbuff SG

i hope to cash out my CPF in afew years time. Smile

eagle SG

Note! Employment contribution has not risen to pre 97 levels! Evil or Very Mad

phil30k SG

This is truely a horror story.

I don't think this forum is large enough for this story.

I think the person should speak to his minister and to the newspapers and try to get his story published in the mainstream medias.

I think more Singaporeans have to hear this story.

kilua SG

CPF is another big indirect tax on the citizens wealth. The older generation like the man in this article represent the batch of Singaporeans who get the worst deals from CPF.

The old generation who are generally less educated, entrusted LKY their retirement savings and earned paltry returns on their CPF. They wasnt much choice then, Investing in mutual funds/unit trusts was only allowed in 1999. Thus the older generation really got a raw deal when they earn low interest for long term savings.

The results of poor returns of retirement savings? Extended retirement age..

Most of the older Singaporeans without a good education are hit with a double whammy - low retirement savings and a flood of foreigners. Thats why Singapore is one of the few developed country where the cleaners and cardboard scrapers are elderly people. Even PRCs in Singapore question why the elderly have to work as cleaners. What happen to the retirement plan LKY promised to the largely uneducated Singaporeans when the system was set up?

trendz SG

how true. i agree.

eagle SG

the original intention of many policies has already been changed.

Question: How many old folks can 1 million sgd a year help?
I'm sure it can help a lot.... if so, the following questions:

Do our ministers require a pay raise totaling more than million a year when they are serving the public? And if they are serving the public, why can't part of this "pay raise" be donated to help this old folks instead? And if can be donated to help these old folks, do we still need annuity schemes or raising of withdrawal age to 65?

deathbait SG

To be fair, I received my yearly CPF statements of the changes, but who reads? I did not.

I think this says everything.

Time and again I'm amazed by people who naively believe that the interest from money in CPF falls directly from the heavens. Where do you think interest comes from?

Basically, the bulk of his complaint was the fact that he could not register his company due to his *ahem* owed CPF contribution. Now I'm no lawyer, but I'm sure that if you wronged someone first, you can hardly complain when they decide to retaliate.

Annuities is something I disapprove of. That's about the only part in his rant that I agree with. A man with so little to say he has to resort to claiming credit to doing national service is a sorry man indeed.

Once more though, I should clear up the silly argument that CPF interest returns should match Temasek's stellar returns on investments last year.

Temasek INVESTS. That means sometimes it wins, sometimes it loses. CPF interest is more or less stable. Just because Temasek does well one year does not mean it will do so the following year. Unless you are willing to take NEGATIVE INTEREST on years that Temasek loses money, please don't even dream of asking for more interest in the years that Temasek makes good money.

kilua SG

yes our govt is so smart to manage money this way bearing the risks for uneducated Singaporeans in the early years of the nationhood.Most developing countries should learn from the Singapore CPF system so that their citizens can lead a productive life even when they hit the 80s.