Interesting article on CPF by Philip Ang on the same day that Chia Yong Yong made her speech.
For me, I don't trust PAP with my hard-earned CPF money, they kept shifting the goalposts and changing the rules to lockup more and more of my CPF money till my death. Could it be that PAP elites have some sinister motive for locking up citizens CPF money till their death? CPF is actually debt for the PAP govt to play the market and they may not be able to repay the whole sum, locking some up till death can delay some debt repayment perpetually.
https://likedatosocanmeh.wordpress....y-way-to-stop-cpf-scam-remove-pap-from-power/
20150304 Only way to stop CPF scam – remove PAP from power
March 4, 2015 by phillip ang
PAP’s opacity and constant tweaking to prevent CPF withdrawal have led to an increasing number of Singaporeans to suspect CPF is a scam.
A ‘scam’ is defined as ‘a dishonest scheme’ or ‘a fraud’. Meant for retirement, two thirds of CPF contribution have been channeled by PAP into housing. CPF has also been abused as ‘friendly’ housing loans to buyers of HDB flats ie HDB concessionary loans. Returns in excess of the CPF rate have been retained by GIC for decades, returns which rightly belong to members. CPF qualifies to be a scam.
The PAP had the opportunity to clarify but has provided meaningless assurances such as telling members our CPF is safe. Many of us feel helpless in the face of PAP’s power, power given by Singaporeans which PAP has abused. Although we have victimised ourselves, fortunately, the upcoming election allows us to do what is right.
What is needed is an understanding of how the CPF scam works to have the confidence to vote wisely.
So why is CPF a scam?
1 No CPF member would have invested ALL our retirement savings in foreign assets. With family and friends in Singapore, very few would want to migrate to unfamiliar surroundings at the end of our ‘productive years’. The reason why GIC has invested 100% of our CPF in foreign assets – PAP never had the intention of returning OUR CPF.
2 The Minimum Sum (MS) was set at $30,000 in 1987 but has since increased by 430% to $161,000 by July 2015. One year before the introduction of the MS, CPF OA and MA rates were 6.5% but have fallen to the legislated minimum (almost every year) since almost 3 decades ago. Low CPF interest rate is one of the causes of our retirement shortfall.
3 Through legislation, CPF is ‘invested’ in Special Singapore Government Securities (SSGS) before being transferred into GIC where the real investment occurs. Traces of its CPF origin have been erased and CPF now belongs to the government where the PAP is then able to use our CPF at its whim and pays us peanuts in returns as it pleases. Not a scam?
4 What PAP has really been doing is use our CPF as a cheap source of funds to build an international business empire. If the PAP is able to constantly skim off a certain percentage from what’s rightly our returns, they will continue to use OUR money to supplement the budget eg profit 6% but pay only 2.5% to 4% to CPF members. Why should CPF members help PAP supplement the budget?
5 Since CPF returns provide a boost to budget surpluses, the PAP has used this to justify permanently retaining revenue from land sales instead of using a small portion on social spending. Revenue from land sales total about $200 billion for the last decade but PAP portrays the government as poor.
6 It does not make any sense for PAP to invest ALL our CPF in foreign assets and be subjected to unpredictable forex movements.
Forex movements could be unimaginably wild such as SGD/CNY. The value of a S$1 billion Chinese investment in 1985 (RMB 1.2 billion) would have fallen to S$200 million 10 years later due to a lower exchange rate. Held till today, forex losses would have amounted to 75%.
As for the Indian rupee, it has been depreciating at about 300% every 10 years during the last 30 years.
Knowing full well foreign investments carry extremely high exchange rate risks and investments will have to be liquidated and converted to local currency, what are PAP’s real motives for investing ALL our CPF overseas?
7 More than 90% of MPs do not know where our CPF is invested. Only a handful of PAP ministers are privy to information on our $275 billion managed by GIC. Does this make any sense?
8 The CPF retirement shortfall issue has been brewing for more than a decade, leading to CPF protests at Hong Lim Park last year. Since Yee Ping Yi became CEO of CPF Board in 2011, his voice has hardly been heard without the approval of PAP. Why does the CPF CEO not serve CPF members’ interest but PAP’s?
9 The CPF Advisory Panel has expectedly proposed a partial lump sum return of our CPF at 65. The inability to return billion$ of CPF to members at 55 suggests all is not well with our CPF. If the PAP continues to conceal CPF investment information from members, the underlying issues may one day blow up in our face and this can only mean severe losses.
10 Are CPF members really paid from investment gains made by GIC? Since CPF funds are commingled with real reserves (CPF is pseudo reserves), can PAP prove our reserves were not used to pay CPF interest?
11 PAP has sold public property to its own $2 company, Action Information Management, at a fraction of the cost to HDB residents. The MND found nothing amiss in the transaction.
Since PAP could do such a thing behind our back, how can we still trust the PAP with our CPF?
12 GIC needs a constant stream of income to pay CPF members but its ability to do so is not evident from its listed securities portfolio. Most GIC securities pay peanuts/zero dividend. It is likely GIC’s revenue is derived from the purchase/sale of shares ie speculation. GIC needs to disclose its source of revenue.
13 A post by Roy Ngerng revealed Lee Kuan Yew denied GIC’s use of CPF funds in 2001 and 2006. Lee Kuan Yew had been GIC chairman since its inception and he could not have been unaware of the origin of GIC’s funds ie reserves included CPF monies. Why does the PAP go to great lengths to de link CPF from GIC?
14 The PAP claims it is unable to disclose the size of “Government funds” managed by GIC because this will:
– amount to publishing the full size of Singapore’s financial reserves
– make it easier for markets to mount speculative attacks on our currency during periods of vulnerability.
CPF members have been misled because:
– there was never any mandate for the PAP to use CPF to conceal the full size of our reserves
– CPF was not ‘invested’ anywhere but merely a loan to GIC at a fixed, low interest rate through the MAS which acts as an intermediary
– currency speculators would only mount speculative attacks on fundamentally weak currencies, not on the strong Singapore dollar.
15 GIC’s performance has been mediocre at best but it appears its directors have been handsomely rewarded. Can the PAP confirm none of GIC’s directors have been paid in total hundreds of million$ from our reserves? PAP should be transparent because it is dealing with citizens’ money, not PAP’s. GIC’s 6.5% annualised 20 year return (US$) is only mediocre, as can be confirmed by the following:
The S&P was 444 points on Apr 1 1994, hitting 1883 on 31 March 2014. Excluding dividend payment, the S&P index 20 year compounded return is 7.49%.
16 More than $40 billion of our CPF is not invested because they are loaned to other HDB flat buyers in the form of HDB concessionary loans. ‘HDB concessionary loans’ should in fact be renamed ‘CPF members’ friendly loans’ as the funds do not belong to the HDB. When our CPF retirement funds are not invested but merely borrowed by fellow citizens to purchase their HDB flats (CPF interest rate is tied to low HDB concessionary loan rate of 2.6%), is this not a scam?
Conclusion
No responsible pension fund would invest 100% of citizens’ retirement savings in foreign assets which are subjected to unpredictable forex movements. OUR CPF is ultimately converted to local currency and returned to citizens.
But PAP has recently decided it will only return the full amount only after our last breath ie to CPF members’ nominees. Delayed CPF withdrawal, OA and MA Minimum Sum will be increased to about $205,000 this year, etc confirm PAP has no intention of returning our CPF.
Without relevant inflation data, PM Lee had already decided in August 2014 to increase the CPF Minimum Sum to $161,000 in July 2015. It appears PAP has already laid out its plans and knows how much CPF dollars it needs.
PAP has total control of $275 billion belonging to 3.59 million CPF members. Only a handful of PAP politicians are aware of how CPF is invested by GIC. More than 90% of MPs are as blur as you and I.
GIC has been retaining returns in excess of CPF interest rate. As such, CPF members have collectively lost tens of billion$ to GIC. Is this not a scam?
To clarify CPF is not a scam, PAP would need to be transparent and disclose information it has concealed. After more than 3 decades, such information would likely be embarrassing.
PAP’s efforts at obfuscation and constant tweaking to prevent CPF withdrawal comes at a huge political cost. That it has not made a ‘U-turn’ strongly suggests a mismanagement/abuse of our CPF.
With total control of parliament, PAP will continue to be opaque. It appears the only option left for voters to stop the CPF scam is to remove PAP from power.
