I wonder why they decided on 12 plans in the first place. I have always felt that it was unnecessarily complicated and have given my views on this matter. Anyway, the earlier structure was recommended by a committee of distinguished people that met and received the feedback of a large number of people over several months. It seems that there must be something wrong with the way that decisions are taken in Singapore.
When I gave my feedback to the REACH forum, I suggested that the CPF Life Annuity should be made attractive, rather than compulsory. If it is attractive, many people will opt to join the scheme. It can be made attractive by co-funding by the Government or earn an attractive (higher) rate of interest. The cost to the Government is small and could be easily afforded. (This was before the loss of hundred of billions on the investment of our reserves!)
I do not have the details of the 4 plans. I am not sure if they are placed on the right structure or are still flawed. I shall study it and give my views later.
9 comments:
When they could lose a mind boggling $58 billions, providing a little extra return to the CPFlife is peanuts, don't you agree?.
Yes, it is made simple. Not only it should be simple but a certain degree of compulsion is needed especailly to help members who are easily swayed by glib tongue insurance agents because nothing beats the CPFlife now. Sometimes compulsion is needed for the good of the members.
thanks Mr.Tan,
Yes, pls update me of this plans. I want to know more about this plan through your view.
Jane
Hundred of billions ?
Scary. Actually How many?????
At 100 billions, you can make 100,000 millionaires in spore out of 2,000,000 citizens, or 5% of sporean millionaires.
Are u sure?????
Just the interest alone. At 5% interest (what preference shares are paying), every sporean (2 million) can receved S$2,500 of interest per year. Are u sure??
Can afford to loss the interest, but not the principal amount!!
They are the best annuties and no other other private annuity is better than them .
Dear Mr Tan
Please read my views on CPF here.
I believe strongly that CPF should be used to help, and not bind the citizens.
I hope my children and I could one day live in a country where we can choose, and not forced to participate in CPF.
Please give us that hope.
Hi,
Recently I happened to look at at the scenarios of 1929 Great Depression. An Australian's pension just enough to buy a cup of coffee. Very scary right?
In 194 and 1949, the Guomintang government in the China forced its people to use gold and silver to exchange the so called Gold Yuan Certificates. What happened? The hyperinflation was not suppressed after all but the precious metals were shipped to Taiwan instead.
What will happen to us in the future? Hopefully the inflation rate remains at 2% or else ....I don't dare to imagine!!!!!Just my 2 cents' view.
30. What is the monthly income that I would receive under the CPF
LIFE?
Ans: The monthly income that you would receive under CPF LIFE would
depend on the amount of savings you have in your RA and the LIFE plan that you choose. The monthly income may be adjusted depending on the actual interest rate and mortality experience of the scheme. This is to ensure that the scheme is adequately funded and sustainable over the long term.
source: http://mycpf.cpf.gov.sg/NR/rdonlyres/F540570D-A107-488F-A295-67E128643210/0/CPFLIFE_FAQ.pdf
Does this mean the monthly payout would vary?
Jasmin
thank you Mr Tan. We need your expertise on these issues.
This is a kin to variable annuity where payouts depend on the performance of the investment you choose. It is good and bad but combined it is better than fixed payouts.
Even with participating annuity, eg, ntuc, there is variability, ie. a fixed amount plus a variable bonus which maybe zero.
CPFLife payouts are variable but the variability is low because it depends on the interest rate or the 10 year bond 10 year average, Of course currently the bond yield average is low but it can go as high as 5% especially when economic activities pick up.
Anything that is fixed is like a shooting target and at the mercy of inflation..
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