We refer to the article “CPF focus group: Hopes for more certainty, simpler system” (Channel NewsAsia, Nov 15).
10 focus group discussions?
It states that “The CPF Advisory Panel held its first public focus group discussion on Saturday (Nov 15) to seek views on enhancing the CPF system. The panel will likely hold up to 10 focus group discussions over the next three months.
A variety of suggestions were given on what is considered adequate for retirement. One common thread was the desire for more certainty and a simpler system.
Recognising the diverse views, the Advisory Panel said ultimately, a decision will be made to serve the majority needs.
“In the end, some judgement has to be made because no matter where you stand, there will be a trade-off,” said Prof Tan Chorh Chuan, chairman of the CPF Advisory Council. “That flexibility does not just affect the individuals concerned, it can also spill over into the wider society because if many people opt for certain options, then the consequences may have to be shared with the wider community.”"
Much ado about CPF – all of a sudden?
- After decades – all of a sudden – we seem to be “head over heels” about the need to change our CPF system.
No matter how many focus groups you hold – if you ask a diverse group of people what they want – it is likely that you will get different wishes.
This is arguably what happened at this first focus group discussion – “Finally, participants were asked if they preferred to have flat CPF payouts or escalating payouts that rise over time. The majority preferred escalating payouts, due to inflation. However, there was a group opting for declining payouts, leading to mixed views.
“Some of us felt a declining payment schedule would be best because we felt that when we are young, we probably need more money to spend on whatever interest that we have – travelling or to help with children’s education,” said Colin Loh, a participant at the focus group. “But when we are old, we probably don’t need much anyway.”
But fellow participant Daniel Yap said: “Declining payment opens the country up to a lot of risks, in terms of social transfers. There is going to be a point where your payments don’t meet the basic subsistence level, and when that happens, the government has to make up for that shortfall somehow.”"
How useful or fruitful is such a “focus group discussion” approach?
Focus! Focus!
Here’s what we suggest we should be focusing on:
Why can’t we get a straight answer to the following question about our CPF:-
… Is Singapore the only country in the world that keeps about half of the returns (estimated) from its national pension scheme, at the expense of the citizens – resulting in the lowest real return of all national pension schemes?
How much exactly did we lose?
GIC: Lost more than $40b?
Since it was disclosed recently that our CPF funds were managed by GIC – does it mean that the stated “20% loss” in 2008/2009 was about more than $40 billion (20% of total CPF funds balance plus non-CPF funds in GIC)?
Temasek: Negative Annual Wealth Added of $68.1b?
Whilst repeated questioning in Parliament by Members of Parliament (MPs) failed to find out how much Temasek lost during the last financial crisis (2008/2009), its report in 2011 indicated a negative Annual Wealth Added of $68.1 billion in 2009.
Lost over $100b?
So, if we add Temasek’s “negative Annual Wealth Added of $68.1 billion in 2009″ to GIC’s estimated loss of over $40 billion in 2008/2009 – does it mean that we may have lost more than $100 billion?
To put this amount in perspective, does it mean that we may have lost almost double our total Government spending in a year (2008) or about half of our total CPF funds then (2008), in just one year?
CPF’s main issue?
How much money are Singaporeans losing due to the Government keeping the excess returns on our CPF?
Implicit tax on CPF returns?
Since we now know that GIC manages our CPF funds, and we estimate its annualised returns from inception to be over 6% – the excess returns that we lose is estimated to be about 3% because the weighted average return on all the CPF accounts is estimated to be 3%+.
Singaporeans lose $8.5b a year?
With over $269 billion in the CPF and contributions exceeding withdrawals by about $14 billion in a year, is the estimated loss to Singaporeans about $8.5 billion a year?
Lose $144b in 10 years?
Or about $53 and $144 billion in the next 5 and 10 years, respectively.
Already lost hundreds of billions?
Similarly, how much has Singaporeans lost out in the past? It may be in the hundreds of billions of dollars.
No country profits from national pension scheme?
Is there any country in the world that makes so much profits, or for that matter any profits at all, from the national pension scheme?
S Y Lee and Leong Sze Hian
P.S. Come with your family and friends to the 5th Return Our CPF protest on 29 November 4 pm at Speakers’ Corner https://www.facebook.com/events/796694730417598/