Tan Kin Lian's Blog: Safeguard the CPF money

Saturday, July 02, 2011

Safeguard the CPF money

I have received several e-mails from the people about their CPF savings - how safe are they? They like the President to play an active role here. They feel that Dr. Tan Cheng Bock may not have the financial knowledge and Dr. Tony Tan might have a conflict of interest - as he was involved in managing the funds in GIC.

5 comments:

C H Yak said...: Dear Mr Tan

Yes, many people particularly the baby-boomers borned in the early 1960s and earlier are really concerned.

(i) Most of their CPF savings have already been committed in an "expensive" property.

(ii) Even if they have "balance" left in CPF and do invest, the present investment climate is too volatite and risky. Returns are not as high.

I feel Dr Tan Cheng Bock is comparatively lacking in his financial acuity. And Dr Tony Tan does have an immediate conflict of interest since he just left and handed over our SWF managment yesterday.

Not just that, I see SPH,an affliated GLC, had made very aggressive investment decisions into properties which even stakeholders with vested equity participation may doubt and query...

I wonder how our other GLCs and also the SWF investments are performing if our CPF are invested into them. Worst, these SWFs are not as transpartent in their investment decisions. I support your idea to have the EP office issue an annual report on our SWF investments.

But as we know from the late President Ong Teng Cheong, we are not even known with a "Listing of Assets"...less to say the investment returns.; July 02, 2011 10:31 AM
David said...: Dear Mr Tan

What are your concerns about our CPF? Is it that members may not get their money when they reach 55? Is CPF not guaranteed by govt?

Btw have you withdrawn all your CPF? Where do you think one should invest in since banks' deposit rates are miserable compared to CPF rates?

David; July 02, 2011 11:44 AM
Vincent Sear said...: Practically, all investible CPF funds might be self-managed privately between around 2002 to 2008, i.e. you can place all your CPF funds (except Medisave) with private fund managers of your choice. In that scenario, the CPF member would have nothing to worry about GIC or Temasek. Just keep track on your own fund managers.

Before 2002 (after CPFIS in 1992) there was minimum balance test, from 2008 on, there's the S$40,000 minimum (OA+SA combined) balance which I believe was introduced to cover CPF Life requirements.

So as it is now, a minimum of S$40,000 must be reserved for CPF Life. The S$40,000 may be reserved from SA since you can still deplete your OA for housing.

If you aren't happy with the government investment vehicles enough to leave all your funds there for CPF interests, your maximum exposure to institutions managing CPF funds is S$40,000.

If you don't know too much about personal investing, then you have to rely on government returns and worry about government investments and expenses relative to CPF funds.

From my understanding of the Constitution (limited, I'm no lawyer) the President should be able to check for reserve balances and block expenses deemed unwarranted. However, the President shouldn't be interfering with government investment management policies.; July 02, 2011 3:45 PM
symmetrix said...: It is true that bank interest rates are lousy compared to CPF interest rates. Hence withdrawal at 55 may not be a good idea for alternative investment purposes. But that is not the issue here.

The issue is whether one can withdraw all his CPF monies unconditionally upon reaching 55. This includes monies in all the accounts (Medisave, Retirement etc). With the Minimum Sum increasing periodically, there is less money available for withdrawal for other non-investment purposes, eg round-the-world cruise tour etc.

We want assurance that CPF money will be available as and when we need it. It would be great if the President can look into this matter.; July 02, 2011 3:57 PM
Tan Kin Lian said...: Reply to David. Many people have expressed the following concerns:
* are my CPF savings safe?
* can I withdraw it earlier, if I need it?
I have no concern about CPF. We need to communicate better with the citizens so that they can trust that the CPF policies are made in their interest.
I have left my CPF money with CPF to earn 4% interest - as I do not need to withdraw the money now. I encourage people to keep the money in CPF to earn this attractive interest rate and only withdraw the monthly amount that they need for their expenses.; July 03, 2011 8:19 AM