The recommendations from the CPF Advisory Panel are a sham.
But you most probably knew it anyway. I will share my interpretation here. This article might be a bit long. If we agree that the CPF is the most important thing that the PAP government needs to answer to, then we need to make sense of these “recommendations” so that you will know what the PAP is really doing.
After you go through the article, please take part in the poll at the end of the article on what you think about the recommendations from the CPF Advisory Panel.
Background: Singaporeans Want to Change the CPF because We Cannot Save Enough to Retire
Before we continue, let’s revisit the background again. First, the CPF of Singaporeans is the least adequate pension fund in the world, according to the OECD, which explains why many of our elderly Singaporeans are unable to retire today. Second, the CPF has the lowest returns among all pension funds in the world as well. Third, Singaporeans have to pay the most out of our wages into CPF or social security in the world – Singaporeans have to pay 37% of our wages into the CPF.
So, here is what it is. The PAP government businessmen makes Singaporeans pay the highest proportion out of our wages in the world into the CPF, so by right we should be able to save the highest pension funds in the world as well too, right? But why is this not happening?
Here’s why. First, the CPF earns the lowest returns in the world and so the CPF grows the most slowly of all the pension fund systems in the world. Second, Singaporeans have to pay for the most expensive public housing in the world – we actually use 55% of our CPF Ordinary Account to pay for the housing mortgage, as such this depletes a large proportion of our pension funds. Finally, the PAP businessmen have been taking Singaporeans’ CPF to give the GIC and Temasek Holdings to invest and because of this, the GIC and Temasek Holdings take away a large amount of our CPF earnings. The PAP businessmen refused to admit to this and even denied that they took our CPF to invest in the GIC in 2001, 2006 and 2007. They only finally admitted that they took our CPF to invest in May last year, after they sued me and were forced to admit to the truth. But even then, thePAP businessmen continued to deny that they have ever taken our CPF to invest in the Temasek Holdings when it has been proven that they have. Today, the GIC earns an annualised 6% returns and Temasek Holdings earn an annualised 16% since inception but the PAP businessmen only return 2.5% to 4% back to our CPF, or an average of between 3% to 4%. You can see that we are losing as much as half of our CPF.
So, this is the background – the reason why Singaporeans are not able to earn enough inside our CPF is because the PAP businessmen have been taking Singaporeans’ CPF to give to the GIC and Temasek Holdings to earn but have not been giving back the full returns. In fact, because the PAP businessmen has been taking Singaporeans’ CPF to earn, the GIC and Temasek Holdings today rank as the top 10 sovereign wealth funds in the world, but Singaporeans have the least adequate retirement funds with the lowest returns in the world.
No surprises how this happened – the PAP businessmen has been siphoning off Singaporeans’ CPF to enrich themselves legally.
Solutions: To Grow the CPF, a Responsible Government would have Increased Wages, Reduce CPF Interest Rates and Reduce Housing Prices
Now that we have established the background, let us ask – how then should the CPF be changed?
If we follow the explanation above, then the solutions to increase the CPF are clear.
First, increase the CPF interest rates to at least the level that the GIC is earning, or 6%. Second, reduce housing prices (by pegging flat prices to near construction costs).
In addition, the one reason why Singaporeans’ CPF have not been growing is also because the real wages of Singaporeans have remained stagnant or even declined for the past 20 years. Today, 30% of Singaporeans are not able to earn enough to even spend on basic necessities and have to spend 105% to 151% of what they earn. What this means is that already a significant portion of Singaporeans are not paid enough to survive, so whatever they set aside for CPF will not be enough for retirement as well. As such, the third solution to increasing the CPF would be to increase the wages of Singaporeans.
As it is, because both wages and the CPF interest rates have been growing much slower than inflation, this means the real value of our CPF is actually declining.
Thus as Leong Sze Hian and I have written about this last year, to truly increase the CPF, we need to:
- Increase wages by implementing a minimum wage of at least $1,500
- Increase CPF interest rates to 6%
- Remove land costs from HDB flats to reduce housing prices, so that lesser CPF will need to be paid to housing loans
So far, so good.
Now, let’s take a look at the recommendations by the CPF Advisory Panel and see if they satisfy these solutions.
Before I proceed, I am going to use a cup of tea to illustrate the next part of the story.
Imagine that your cup of tea is only half-full now – the tea represents your CPF. Currently, we do not have enough tea inside the cup and do not have enough in our CPF to retire on. To have enough to retire on, we will need to fill up the cup with more tea, and so we need to increase wages, increase the CPF interest rates and reduce housing prices, so that we can fill the cup with more tea.
Preferably what we want is for the tea to be filled up to the brim so that we will have enough CPF to retire on.
The CPF Advisory Panel Changed the Name of the “CPF Minimum Sum” but Singaporeans will Still Not Have Enough to Retire On
Now, let’s look at the CPF Advisory Panel’s recommendations.
The panel said that it will rename the “CPF Minimum Sum” to “Retirement Sum”. This “Retirement Sum” comprises three levels: Basic, Full and Enhanced. If someone is able to meet the Basic Retirement Sum of $80,500, he/she would get a payout of $650 to $700. If someone is able to meet the Full Retirement Sum of $161,000 or twice the Basic Sum, he/she would get a payout of $1,200 to $1,300. If someone is able to meet the Enhanced Retirement Sum of $241,500 or three times the Basic Sum, he/she would get a payout of $1,750 to $1,900.
But you see, nothing changes. The “Full Retirement Sum” is basically the current CPF Minimum Sum dressed up in a new name. The “Basic Retirement Sum” is basically what happens when people currently pledge their property to meet half the CPF Minimum Sum – no change again. Thus there is nothing new about the “Retirement Sum” except for a name change.
The only new thing is the “Enhanced Retirement Sum” of $241,500 which as many Singaporeans have observed, only means that the PAP businessmen want to trap more of your CPF inside the CPF.
Bur more importantly, regardless of which “Retirement Sums” you come under, it is not these “Sums” that matter. What really matters is whether you have enough CPF inside to meet these “Sums” in order to receive the payouts.
What we need to realise is that these “Retirement Sums” are only “levels” that the PAP businessmen want to keep Singaporeans’ CPF inside. If you cannot meet these “Retirement Sums”, the PAP businessmen do not mention at all how they will help to increase Singaporeans’ CPF to meet these “Retirement Sums”. Your CPF will still be trapped inside.
So, if you do not have the amount of CPF to meet the “Retirement Sums”, then you cannot receive the level of payouts.
What is so different about this as compared to the old system? Nothing.
Let’s use the cup of tea for illustration.
You see, what the PAP businessmen have done is this – they are now saying that they will give you three cups – a Basic, Full and Enhanced cup, or small, medium, large.
But you see, the amount of tea you have inside the cup is still the same – it doesn’t change.
But what were Singaporeans asking the government to do? Singaporeans wanted the government to increase the amount of tea in the cup. Instead, the PAP businessmen have refused to increase the tea but only provided different cups. Then, what’s the use?
Then so what? So what if the PAP businessmen now tell us that we can have three different cups, or “Retirement Sums”? It doesn’t matter. Even if we go under the Enhanced Retirement Sum of $241,500, if we only have $60,000 inside our CPF, we would still be able to withdraw only about $550 every month to use and not the $1,900 proclaimed.
In short, the “Retirement Sums” do not change a thing – in effect, what the PAP businessmen has done is to simply have three levels of the CPF Minimum Sums and Singaporeans will still not be able to meet the Minimum Sum anyway – nothing changes.
The PAP businessmen are not going to and to not want to help you earn more CPF.
You see, I have previously estimated that 73.5% of Singaporeans have less than $77,500 inside our CPF. Thus even with the “Basic Retirement Sum” of $80,500, it still does not change a thing. Previously, 73.5% of Singaporeans cannot meet half the CPF Minimum Sum. Now, 73.5% still cannot meet the “Basic Retirement Sum”. And nearly 90% still won’t be able to meet the “Full Retirement Sum”.
Singaporeans are still not able to withdraw enough to use.
Do you also remember that prime minister Lee Hsien Loong had said in the National Day Rally last year that, “Beyond (increasing the CPF Minimum Sum to $161,000), I do not see the need for any more major increases in the (Minimum Sum)” but the CPF Advisory Panel is now saying that the Basic Retirement Sum will be increased every year by 3% from 2017 to 2020. If already 73.5% cannot even meet this Basic Retirement Sum, then if the PAP businessmen keep increasing this Retirement Sum, doesn’t this mean that more Singaporeans will not be able to meet this Retirement Sum and will still have their CPF trapped inside.
Previously, it was also estimated that only 11.5% of Singaporeans have more than $155,000 inside their CPF. Then how many Singaporeans would have enough inside their CPF to meet the “Enhanced Retirement Sum” of $241,500? Most likely less than 5%, or only the most well-to-do. This means that the large proportion of Singaporeans will still not benefit.
A Government which Really Wants to Help Singaporeans will Help Increase Our CPF
But back to our cup of tea.
You see, all these “Retirement Sums”, by it Basic, Full or Enhanced are all useless.
If a government truly wants to increase the CPF of Singaporeans, it will not give you different cups but yet only pour the same amount of tea into the cups. If a government really want to help you, it will pour more tea into your cup.
And what is the way that will allow you to have more tea? As we have said, it is to increase your wages, increase the CPF interest rates and reduce housing prices.
But the PAP businessmen do not want to do this.
The PAP Businessmen Do Not Want to Help Grow Singaporeans’ CPF but Want to Make Our Family Members Pay More
Yet the PAP businessmen said that if you want to increase your tea, sure you can do so – ask your spouse or family member to pour the tea from their cups into your cup. They are asking Singaporeans to top up the CPF of their family members.
First, 30% of Singaporeans already do not earn enough and have to spend more than what they earn, even on basic necessities. Also, the next 30% of Singaporeans only earn enough to pay for basic necessities and nothing else. So, you can see that at least 60% of Singaporeans barely earn enough to make ends meet and can barely save. Essentially, the majority of Singaporeans would have to work for the rest of their lives and never be able to retire.
And what are the PAP businessmen asking Singaporeans to do? To top up the CPF of their family members. But where at least 60% of Singaporeans already have difficulty even saving enough inside their own CPF and around 75% of Singaporeans cannot even meet the “Basic Retirement Sum”, then how exactly are Singaporeans even able to have the excess money to top up their family members’ CPF?
Again, so let’s go back to the cup of tea.
When we said that we want more tea to be poured into our cups, we are not asking for another family member of ours to do so because either way, all of us inside the family will still not have enough tea inside our cup, no matter how we move it around.
Already, the PAP businessmen has taken a lot of our tea and poured into the GIC and Temasek Holdings cups, or teapots. What we are saying is for the government to pour the tea from the GIC and Temasek Holdings pots back into our cups – by returning the interest earned on our CPF back to us.
But the PAP businessmen do not want to do this.
A Just Government would Return the Money They Took from Singaporeans Back and Increase Our Wages
The problem now is that Singaporeans already do not earn enough wages so a responsible government would increase our wages. However, the PAP businessmen have instead ignored the low wages that Singaporeans are earning – one of the lowest among the developed countries, mind you. But the PAP businessmen have the cheek to ask low-income and lower-middle income Singaporeans to stretch the little money they have and share it with one another by topping up each other’s CPF, while the PAP businessmen continue to take Singaporeans’ money to earn for themselves.
Rightfully, a responsible and just government would return the money taken from the people back to the people, right? But not the PAP businessmen – they only want to take Singaporeans’ money to earn. Giving back your money means lesser for them, why would they want to do that?
Yet Mr Lee still had the cheek to say that, “How much you need in retirement depends on how much you have been earning, depends on your family circumstances,” when he was asked to comment on the CPF Advisory Panel’s recommendations. If Mr Lee would so much as to acknowledge that whether Singaporeans will have enough to retire on depends how much we earn, then he would know that Singaporeans do not earn enough wages and that the government should rightfully increase the wages of Singaporeans. But the PAP businessmen refuse to do so.
Also, Mr Lee would acknowledge that whether Singaporeans are able to save enough for retirement depends on our “family circumstances”, then he would know that a significant portion of Singaporeans lead difficult lives and would have difficulties topping up their family members’ CPF, then why would the PAP businessmen not return the money that GIC and Temasek Holdings have taken from Singaporeans’ CPF back to us? The PAP businessmen simply do not want to do so.
The PAP Businessmen Do Not Want to Increase Our CPF and Do Not Want to Let Us Take Out Our CPF
Not only that, Singaporeans have been asking the government to return their CPF to them when they reach 55 years old.
The PAP businessmen said, you want you money returned? Fine, we will do so. But we will only return 20% of your CPF and we will only return it to you when you are 65 years old.
But what’s the problem? You see, already half of Singaporeans do not even have $55,000 inside their CPF. After withdrawing 20% of their CPF, half of Singaporeans would have less than $44,000 inside their CPF. This means that with what is left inside, half of Singaporeans would only be able to receive less than $400 in payouts every month.
Again, what then should the solution have been?
Back to the cup of tea, if wages and CPF interest rates are increased and housing prices are reduced, there would be more tea inside our cups, right?
As I had written before, because the PAP businessmen takes our CPF to earn in the GIC and Temasek Holdings, Singaporeans are losing as much as half of their CPF. The average Singaporean will actually lose between $750,000 to $3 million of their CPF.
Now, if Singaporeans are able to rightfully get back their CPF and what is earned, the average Singaporean would be able to save as much as nearly $2 million inside their CPF. If you take into perspective that Singaporeans are already paying 37% of our wages into the CPF, this amount is not far-fetched. In fact, this is pretty much how much we should be actually be able to save inside our CPF.
Then, why is it that more than half of Singaporeans do not even have $55,000 inside their CPF today?
Even if Singaporeans have $1 million inside their CPF, you can even let a person take out 50% or 80% of their CPF and they would still have enough to take out in monthly payouts and be able to retire adequately.
Then, what is the problem here?
If the tea in our cup is properly filled, we would have enough to be able to both withdraw in lump sum when we want to retire and still have enough in monthly payouts for the rest of our lives – we already pay 37% of our wages into the CPF, so we should have saved a lot of CPF by the time we want to retire.
And if the experience of other countries follow through, when the CPF interest rates are high, Singaporeans would in fact want to keep the CPF inside our accounts to let our CPF earn interest and grow.
But it is in fact that because CPF interest rates are so low today – and the lowest in the world, which is why Singaporeans cannot earn enough on our CPF and would rather take our CPF out so that our CPF will not get trapped inside.
The PAP Businessmen Still Want to Trap Singaporeans’ CPF Inside
When you put everything together, you will realise that the PAP businessmen still want to trap Singaporeans’ CPF inside for their own use. First, the PAP businessmen refused to increase wages and the CPF interest rates, or reduce housing prices – in other words, the PAP businessmen do not want your CPF to grow. Next, the PAP businessmen do not want to return to Singaporeans the money they took from us, instead they want poor Singaporeans to take from whatever meagre savings they have to pay for their family members – the PAP businessmen wants to keep taking Singaporeans’ monies to earn and does not want to return it. Finally, the PAP businessmen is only allowing Singaporeans to withdraw 20% lump sum from their CPF, and only at 65 years old, so after taking away Singaporeans’ CPF and leaving very little for Singaporeans, the PAP businessmen still want to prevent us from taking our CPF out so that they can keep our CPF inside for themselves.
Singaporeans, as I have said many times, Singapore no longer has a government. The PAP businessmen are raiding our CPF to let themselves get richer, while Singaporeans have to suffer.
The CPF Advisory Panel Pretends to Change the CPF but Nothing Changes
So, do you see now that the recommendations from the CPF Advisory Panel is pretty much useless and is in fact, a sham?
If the above was confusing, all you need to know is this – currently our cup of tea is only half-filled, we do not have enough inside our CPF to retire on.
What a responsible government should have done is to pour back the tea that they have taken from our CPF into our cups so that our cups will be filled with enough tea and we would have enough to retire on.
Instead, what the PAP businessmen have decided to do is to give us bigger cups without putting back the tea. They hope that when they give us bigger cups, they can make us believe that there is more tea. But you can see for yourselves whether there is more tea or not.
Clearly, what this means is that we still won’t have enough tea, or CPF to retire on.
There is no point in giving bigger cups when there isn’t more tea, or to help Singaporeans have more tea.
In fact, by giving Singaporeans bigger cups and then telling Singaporeans that if there is not enough tea, we won’t be able to drink it still, this still means that our CPF will still continue to be trapped inside the CPF.
And as mentioned, the only way that the tea will be returned, and for our CPF to be returned, is to increase our wages, the CPF interest rates and to reduce housing prices so that we do not pay so much from our CPF into housing loans.
But the PAP businessmen do not want to do this.
Instead, Mr Lee chooses to turn a blind eye to Singaporeans and said, “In fact, even today, quite a number of people leave their money in their CPF instead of withdrawing it all when it comes to their withdrawal age. They don’t get a lot of publicity, and they don’t jump around at Hong Lim Green, but they quietly know that this is a good deal.”
However, what Mr Lee said does not sync with reality. A Blackbox survey showed that 51% of Singaporeans thought that the CPF is unfair and only 37% thought it is fair and of the low and middle-income, 60% felt that the CPF is unfair.
The PAP Businessmen Still Want to Take Singaporeans’ CPF to Earn for Themselves
What can you surmise from this whole “exercise” by the PAP businessmen to “enhance” the CPF? It is another “wayang”, as many Singaporeans have put.
You see, the PAP businessmen never meant to increase your CPF at all. Why should they? If they increase your CPF, they would have lesser money to use for GIC and Temasek Holdings. Why should they let you have the money when they can take it for themselves?
We all know it was all along a sideshow and that the PAP would never increase our CPF. Some of us might have held on to some semblance of hope but I hope that what the PAP businessmen have done this time round have shown very clearly to you that they will not change and never meant to change the CPF to protect the interests of Singaporeans at all.
For the PAP businessmen, their monetary interests and their want for profit will always be more important than Singaporeans, if it is not clear by now.
The PAP businessmen still wants to keep your CPF stuck inside for them to use, they still want to depress wages to profit, they still want to keep the CPF interest rates low to let them earn the excess returns and they still want to keep housing prices high to earn from them.
This is How the PAP Businessmen Wanted to Trick You into Believing that They Want to “Enhance” Your CPF
Before I end off, let me show you what tricks the PAP had tried to use to “convince” you that they are trying to “enhance” the CPF.
When most people first read about the recommendations, they remarked that the recommendations were “complicated”. This is the PAP’s first trick – make the recommendations look so complicated that Singaporeans will believe that the CPF is being enhanced.
Second, the PAP said that they will give higher payouts of $1,750 to $1,900 if someone goes under the “Enhanced Retirement Sum”. A casual glance at this will make people believe that they will be able to get higher CPF payouts. But the PAP businessmen know that only the richest 5% among them will be able to get this payout. 73.5% of Singaporeans cannot even meet the Basic Retirement Sum and will not even be get monthly payouts of $650. 90% cannot even meet the Full Retirement Sum (or previously known as the CPF Minimum Sum).
Third, the PAP changed the name of the CPF Minimum Sum. Many Singaporeans have become very angry with the CPF Minimum Sum. The PAP businessmen hoped that by having a brand name change to the “Retirement Sum”, it can work in two ways. First, they would have hoped that people will forget about the bad reputation that the CPF Minimum Sum has and second, they would have hoped that the change would be so confusing that people will forget about how lousy the CPF Minimum Sum/Retirement Sum is. Well, don’t let the PAP get away easy on this one.
By using these tactics, the PAP businessmen believed that they can choose not to increase the CPF and hope to get away with it. Well, will you let the PAP get away with this?
You see, the PAP knows that they need to increase wages and return the interest earned that they took from our CPF, in order to grow the CPF. The PAP also knows that they need to reduce housing prices as well (and housing prices are in their control because National Development Minister Khaw Boon Wan had said that the government controls the housing programme and sets the prices).
But the PAP businessmen won’t do it. They still want to continue making money off Singaporeans.
The CPF Advisory Panel’s Recommendations can Trap Singaporeans Further
But what is worse is not that the PAP still does not want to increase the CPF of Singaporeans. What is worse is how even in the new “recommendations”, there are minefields that can potentially trap Singaporeans.
First, if someone chooses to go on the Enhance Retirement Sum, in the belief that they would be able to get higher payouts, but if they still do not have enough inside their CPF, this means that they whole CPF savings become completely stuck inside the CPF. Second, if someone agrees to defer the Payout Eligibility Age (previously known as the Draw Down Age) to 70 years old, or to only start receiving payouts at 70, this means that their CPF will be stuck inside for a longer time and if they pass away before 70, then they would never have been able to withdraw their CPF.
The PAP Businessmen Still Refused to Answer the Real Questions about the CPF
At the end of the day, after all the sideshow, the PAP businessmen still evaded answering the real questions.
Singaporeans have been asking the PAP businessmen to release the full reports of the GIC and Temasek Holdings, so that we can see for ourselves what the PAP businessmen are taking our CPF to use.
The PAP kept saying that the government does not interfere in the GIC and the GIC claims that it does not know if it uses Singaporeans’ CPF to invest. However, the PAP ministers, ex-ministers and members of parliament are also the GIC’s board of directors, as such it is impossible that the PAP businessmen do not meddle in the GIC and the GIC cannot feign ignorance about not knowing that it uses Singaporeans’ CPF. The PAP businessmen have still not dealt with this clear conflict of interest and continued to pretend that this issue does not exist.
Finally, the PAP businessmen still has not answered how they have kept changing the CPF system to suit their own needs and why they stopped telling Singaporeans how our CPF is being invested by them, until forced to do so after they sued me last year. I have also exposed how the PAP has kept changing the information on the government websites after I managed to trace information on these websites on how our CPF was really invested in the GIC and Temasek Holdings.
Should we allow businessmen from the PAP to meddle in our national affairs and take Singaporeans’ CPF monies to use as if it is their own money? Should we let businessmen take control over our money while not explaining to Singaporeans how they have siphoned it away to use?
The PAP Businessmen will Never Help Singaporeans, It is Time to Help Ourselves
You know, you really have to ask yourself if the PAP wants to help you at all.
It is really easy to increase the CPF if a sincere and responsible government truly wants to – implement a minimum wage and increase wages, return and increase the CPF interest rates and reduce housing prices, so that all in, our CPF will grow.
Why did the government not want to do this – and not even do a single one of these solutions?
Instead, why have the PAP businessmen choose to come out with recommendations that are so complicated to confuse Singaporeans? It is clear that the PAP simply does not want Singaporeans’ CPF to grow, isn’t it? And all they are hoping to do is that by making the CPF even more complicated and by giving the illusion that you might be able to get more from your CPF, that they can trick you to believe that they are trying to “enhance” the CPF, by actually doing nothing.
The PAP businessmen want to continue to earn money off your CPF. Your CPF is cheap money for them.
Well, question is, will you let the PAP businessmen trick you again? Will you let them pull wool over your eyes yet again?
It is clear that the PAP businessmen do not want to help Singaporeans. The PAP businessmen do not want to increase the CPF and they do not want to protect Singaporeans. The PAP businessmen are only interested to continue to confuse Singaporeans further, so that they can make off with Singaporeans’ money to earn for themselves.
Question now is, will you let the PAP businessmen get away with this?
The PAP businessmen have hijacked government to allow themselves to make use of your labour to let themselves get rich, by letting you remain poor and have such squeezed lives. Will you continue to let them?
Or will you do what is right to protect yourself? You gave them a chance to fix the CPF but they have not done so. Instead, they tried to trick you to make you believe that they want to help.
But they only want to continue making money off you.
Well, it’s up to you now. I have never voted for the PAP and I am now even more determined to vote them out of government. I am also pretty sure that more than 50% of Singaporeans, or even 60% of Singaporeans today are very angry with the PAP, if you chart the trends.
Then, let’s make the next general election worth our while. Let’s vote the PAP out and bring in a new government, so that Singaporeans can once again be protected.
It’s all in your hands now. Protect our children. Protect our future.
Roy Ngerng
*The author blogs at www.TheHeartTruths.com