PAP doing a spin on CPF again

CPF returns like mutual fund's, minus risk?

achael Boon
My Paper
Tuesday, Dec 09, 2014

The Central Provident Fund (CPF) provides an attractive return while protecting its members from risk, a new study has found.

Based on certain assumptions, returns from CPF could do as well as a mutual fund that has equities and bonds in its portfolio, without its attendant risk.

The study released yesterday by the Institute of Policy Studies and consulting firm Towers Watson showed that over the next 20 years, returns from CPF could rise to 5.7 per cent a year.

In other words, $100 in the CPF today could triple to $303 in 2034.

The study came to this conclusion after making several assumptions about the financial markets.

One assumption made is that interest rates will rise to 4 per cent in 10 years, up from nearly zero today.

The second is that the 10-year Singapore Government bonds will pay 5.3 per cent a year, up from about 2.2 per cent now.

Compared to returns in cash deposits and Singapore Government bonds, the CPF adds an additional 1.4 per cent a year.

"Overall, the CPF provides an attractive rate of return, with reasonable expected returns without downside risk," said the report.

An advisory panel has been set up to review the CPF by Prime Minister Lee Hsien Loong.

It will look at several aspects of the CPF, including allowing members to seek higher returns while balancing higher investment risks.

This institute must be worst one in the world.

The SPY etf - benchmarks on the S&P - has been delivering about 10 percent over the last 30 years. An investment of $10k a year would have seen your money grow to $1.3 million. Over the 30 year period, there has been numerous bust of the market, with the most recent in 2008-10.

What kind of bs study is this government think-tank producing? If the S&P tanks, the whole world suffers with it, including sinkapore. So, it is total bs to say that the CPF payout is better because of the absence of risk. If government coffers is hit, where got money to pay interest? In good times, the government makan 75 percent of the returns!

I have always said that PAP is the best and CPF is the most admired system in the world. This study proves it beyond all doubt.

Towers Watson I smell a kelong.

Leongsam said:

I have always said that PAP is the best and CPF is the most admired system in the world. This study proves it beyond all doubt.

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The study is totally wrong lah. Even you can prove that the S&P returns beat CPF hands down.

It's bad enough when the interest rates given are a pittance of real market rates. One can always find better rate of return being given outside of Spore.

However when the PAP decides to change the withdrawal age, you have to ask what other changes are being planned "after" the GE

johnny333 said:

It's bad enough when the interest rates given are a pittance of real market rates. One can always find better rate of return being given outside of Spore.

However when the PAP decides to change the withdrawal age, you have to ask what other changes are being planned "after" the GE

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Lets make sure they no more Majority after GE 2016. Lets listen to Sammy.

"Screw the CPF! Beat Ho Ching's returns by converting your SGD to ARS and earn 27.18% interest immediately"

Leongsam said:

I have always said that PAP is the best and CPF is the most admired system in the world. This study proves it beyond all doubt.

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We all know what consulting firms are. Just tell them what conclusion you as a client wishes to see at the end of the consultancy and it will deliver according but of course with all the supporting statistics it will selectively choose. Use your brain lah. This consultancy was commissioned by Institute of Policy Studies which under the Lee Kuan Yew School of Public Policy, so how independent can it be.

What the PAP never learns is that it still takes Singaporeans as fools to believe whatever it puts out. These are 20th century tactics that are absolutely non workable in this present age. PAP is stuck in the past century.

screw the spin on the roi....what we want is the return of cpf monies right now and then

Semaj2357 said:

screw the spin on the roi....what we want is the return of cpf monies right now and then

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True! who the fcuk cares how much can make in returns, if so ask the Familee and all tos Ministars to invest in their Plan.

CPF is the best, best until must be kept and locked for infinity....

Source: TR EMERITUS

IPS: CPF offers attractive returns with no market risk
December 9th, 2014 | Author: Editorial



According to a new study published by the Institute of Policy Studies (IPS) and professional services firm Towers Watson, Singapore’s CPF offers comparatively higher returns with no market risk.

Within the CPF, the Ordinary Account currently gives a guaranteed interest of 2.5 or 3.5% for balances up to $20,000. This is significantly higher than deposit rates offered by the banks, the study said.

Over the next 20 years, CPF could generate 5.7 per cent a year, IPS said. This is based on certain assumptions such as rising interest rates. So, for example, $100 in the CPF today could triple to $303 in 2034, a performance close to that of a typical unit trust that has equities and bonds in its portfolio, except that CPF members do not face any market risk, IPS added.

At the projected 5.7%, this is much higher than the current 2.5% earned on the Ordinary Account and 4% for the Special, Medisave and Retirement Accounts.

Mr Christopher Gee, a research fellow with the IPS said, “The Government’s guaranteed minimum rates that are offered in the CPF actually provide a strong benefit to the CPF member. And the calculations in the framework that have been provided by Towers Watson have shown that this is actually about 1.4 per cent per annum additional to what would have been the case if those minimum rates did not exist.”

Mr Peter Ryan-Kane, head of portfolio advisory for Asia-Pacific at Towers Watson, said, “The CPF account holder is getting a pretty good deal… (The CPF) provides an attractive rate of return, with reasonable expected returns without downside risk.”

CPF monies are invested in Special Singapore Government Securities, which are guaranteed by the Government and have been given the top ‘AAA’ credit rating by all international rating agencies.

However, in the IPS-Towers Watson’s study, several assumptions about financial markets were made:

Assumptions


IPS is part of the LKY School of Public Policy. The Director of IPS is Janadas Devan who is also the chief of Government Communications at the Ministry of Communications and Information. The Dean of the LKY School of Public Policy is Kishore Mahbubani, former Permanent Secretary at the Foreign Ministry.

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End Of Article​

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xingguy said:

Source: TR EMERITUS

IPS: CPF offers attractive returns with no market risk

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I withdrew more than $500,000 from my CPF with no issues whatsoever. All my friends have done the same without any problems.

I have 100% confidence in the CPF. Singapore has not earned a AAA+ rating for nothing. The country is rock solid.