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Thursday, 31 July 2014

Singapore’s Central Provident Fund #ReturnOurCPF

In Singapore, the Central Provident Fund is a social security savings plan for citizens’ old age.
It’s like a pension fund in other countries, however in Singapore, the Government does not spend any money on CPF.
It’s funded by employees themselves and the employers who of course see it as the salary for employees.
Hence, the government did not spend a single cent at all.

The real return on our CPF is the lowest of national pension funds in the world, in fact, the real rate of return on the Ordinary Account was negative the last 10 years.
CPF funds use to be managed by Temasek which is an investment company based in Singapore with a multinational staff of 490 people.
Their portfolio is a whooping S$223 billion, Temasek was incorporated in 1974 and its return since inception is more than 16%.

The PAP government then changed and said GIC is the one who manages CPF funds and the return since inception is more than 6% only.
But hey! It’s still more than the 2.5% we’re getting for the CPF’s ordinary account.

According to the parliamentary reply, HALF of active CPF members met the Minimum Sum but pledged their property.
Which means a QUARTER of CPF members met the Minimum Sum after pledging their property.
Therefore only EIGHTH of CPF members met the Minimum Sum without pledging property.

Most Singaporeans pledge their HDB which is the most expensive public housing in the world in other to have this “minimum sum” for their “retirement”
Is this even called retiring?
HDB is expensive because 60% of the price of HDB flats are allocated to land costs, which means the Government does not spend any money on HDB, which was supposed to be public housing.