CPF not delivering on our retirement savings

oxford mushroom SG

"...Despite a high level of service and efficiency, the CPF has historically generated low returns to individuals under a centralized and opaque investment regime. This threatens to leave many old persons in Singapore with insufficient savings when they retire..."

(Mukul G. Asher. The Pension System in Singapore. World Bank)

See: http://wbln0018.worldbank.org/HDNet/hddocs.nsf/0/58A20E0A641943E8852567D6007B63AE?OpenDocument

Salman SG

Thats why you have ordinary accounts for investments.
How can it be opague? What is this Mukul Asher talking about?

oxford mushroom SG

"..The CPF scheme has come to occupy a pre-dominant position in Singapores
pension arrangements. The recent parametric reforms of the CPF scheme and the introduction of the SRS do not, however, address the main limitations of the arrangements. These include inadequate balances at retirement due to extensive preretirement withdrawals, particularly for housing and property, and due to low returns credited to members; lack of inflation and longevity protection; lack of survivors benefits; lack of transparency and accountability, particularly in investment management; inadequate weight given to fiduciary responsibility as compared to socio-economic engineering objectives; inadequate social risk pooling in health care financing (only about a quarter of the total national health budget comes from the Government - the rest is from individuals and businesses, while the opposite can be seen in high income countries of the OECD); and the virtual absence of a tax-financed redistributive tier. The limited nature of health insurance and the issue of long-term care of the aged also pose challenges to policymakers."

The above is another paper by Prof Asher,

see http://icpr.itam.mx/Working/AsherSingapore.PDF

ShutterBug SG

Don't the CPF know, that by pushing forward Retirement Age, they are liable to end up paying more??

Due to the high levels of stress in making a living here, many who are now 35, have already been diagnosed with high blood pressure. As such, I doubt many of these individuals will live long enough to touch their heard earned CPF cash. Basically, if more and more are dropping dead earlier, wouldn't CPF have to cough up whole lump sums to their next of jins??

Wouldn't this cost them more?

Delaying people's CPF isn't going to ease anything.. may even back fire.

Salman SG

Many retirees lost their retirement money once they receive it by gambling it away.

dragg SG

our population is aging. many citizens are going to withdraw the money in the next 2 decades? they cant afford that, hence the new rules.

they will do anything to stop people from withdrawing the full amount.

anonymouscoward SG

opague means it's not transparent.

dragg SG

then why the casino.

it will only make matters worst.

shade343 SG

I thought a recent survey conducted by the ST shows that life expectancy in SG has increased from 74 to 76?

dragg SG

dont trust surveys!!!

anonymouscoward SG

That is why even after you retire, you do not get the money in a lump sum. The government will disperse your CPF savings to you on a installment basis (which if I remember clearly, is not even enough to pay rent).

Once your money goes into CPF, the government takes this money for investments. Giving you a mere 2.5% for ordinary and 4% for special accounts (limited to $90,000). These rates are usually less than your annual inflation rates.

What the article is saying is that the returns are too small that you get less than peanuts when you retire.

The only solution that many see is to renounce your citizenship when you retire, then you get to take your bulk of the money and retire somewhere else. Try Malaysia, you immediately get to double your CPF savings and most likely become a millionnaire. Sounds very attractive considering the low cost of living. Singapore is not a place for retirement.

av98m SG

The whole idea is to keep people contributing to the cpf for as long as posible, and the delayed withdrawal means the government keeps the money for a longer period of time, thus earning more interest on it. The one thing that gets my goat is that the medisave/medishield money is lost to us forever.

I find that the CPF scheme actually causes much suffering to the low income group.

shade343 SG

casino not meant for singaporeans.

dragg SG

does malaysia welcome chinese retirees?

dragg SG

do you really believe in this type of rubbish talk?

if singaporeans dont go the casino will close in no time.

av98m SG

Sure they do. You'll become a prime target for armed robbers.

ShutterBug SG

Reports, surveys, and whatever you read in papers are like scenic posters they hang outside your opened windows. Just beautiful pictures!

Walk the streets on your own and ask around, and you'd get a lot of hokkien explitives!

euphratis SG

There are ppl who want to knows how to control their own $$$. No wonder garment keep saying we are not ready to take reposiblities for ourselves.Yet there are some idiots who just throw them away within a day. So just becoz of few bad apple, the whole basket has to suffer. That's why the CPF views are going toward this direction, garment doesn't want to end up spending their budget on retired 60+ freeloader who just sit & wait for money from the sky.

Here again, we sporean are again relying on garment to provide for us. Yes very true CPF will not be sufficient with inflation & blah blah blah but at least you will have peanut for lunch. Even if u strike 1mill toto, I don't think it is enough for retirement & yet there are some idiot out there who say if they strike they will immediately quit their jobs & retirement.... I am talking about 20+ 30+ ppl. so it all boils down to individuals.

So how much is enough? 2.5% returns not enough in comparison to what? Blue chips or Bank's rates. I think we have to compare apple to apple to be logical ppl. I am not promoting for CPF but I too am a worrying sporean. No body saves anymore & that is why everyone expect someone to take care of them when the well dried up.

Migrating is not only solution. Grass wil alway seems greener on other side, you will still find some things to complain about. This is human. I had a French friend who is cursing on their " Prefect" welfare system. French has the best welfare system in the entire Europe (World). In the end, no one in the country wants to work hard. The harder you work, the pay gets higher, the tax gets more in terms of percentage. In the end the pay you will get after tax deduction will be almost the same pay as the next person who worked less. So what the "F%�" work. Then you will be "F%�" mad with those free-loaders who refuse to get a job & garment had to spend billions of dollars of tax pay's money to feed these useless.

So imagine this to be happening in Singapore, all we need is to have 1% of these kind of retirees each year who finish their money within a day. Imagine what will happen? Some idiot will complain no garment no welfare. Then some idiot will be the first to complain to garment why they are spending your tax to feed these ppl. The same idiot will complain ppl begging on the streets... same idiot will complain too little money....it will never end.

So nothing is prefect in this world. Maybe the next world after death...

I rest my case.

anonymouscoward SG

I believe Malaysia is running a "retire in Malaysia" programme. Not sure if it's meant for Chinese though.

dragg SG

i seriously doubt they are meant for chinese, especially from singapore.