Our CPF system is now in a mess. Here are the problems:
a) The contribution rate is not predictable. It changes with the economic cycle and can be cut severely in a recession.
b) The contribution rate decreases when a person passes age 55.
c) There are too many uses for CPF savings - health, retirement, housing.
d) The interest rate is depressed, relatively to the yield from a diversified portfolio.
e) Foreign workers do not contribute to CPF - making them less costly to employers compared to local workers.
f) New and complicated schemes keep being introduced, causing confusion to the public - Medisheld Life, Eldershield Life, CPF Life.
g) Many people want to withdraw their savings in cash, but are not allowed to.
h) Young people cannot use the CPF savings to pay for property with leases less than 60 years, leading to a low demand for old HDB flats.
i) The savings set aside for health care are used wastefully, leading to inflated cost of health care.
How can the government sort out this mess and give clarity to the people on how they can plan their CPF savings for their financial needs?
Tan Kin Lian
a) The contribution rate is not predictable. It changes with the economic cycle and can be cut severely in a recession.
b) The contribution rate decreases when a person passes age 55.
c) There are too many uses for CPF savings - health, retirement, housing.
d) The interest rate is depressed, relatively to the yield from a diversified portfolio.
e) Foreign workers do not contribute to CPF - making them less costly to employers compared to local workers.
f) New and complicated schemes keep being introduced, causing confusion to the public - Medisheld Life, Eldershield Life, CPF Life.
g) Many people want to withdraw their savings in cash, but are not allowed to.
h) Young people cannot use the CPF savings to pay for property with leases less than 60 years, leading to a low demand for old HDB flats.
i) The savings set aside for health care are used wastefully, leading to inflated cost of health care.
How can the government sort out this mess and give clarity to the people on how they can plan their CPF savings for their financial needs?
Tan Kin Lian
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