MPs offer ideas to improve CPF

Aiya, in the end kong lai kong kee, my money in your hand beh song lah. My money i invest i lose it ma song lah. But if you are a vagabond or bankrupt due to your mishandling of your CPF money, who is going to responsible for you? Remember G's policy is everyone is responsible for himself. Nothing more nothing less.
So now there is a minimum of 20,000 in OA you can not touch for CPFIS.
BEH song lah! Keep on shifting of gaol post. Don't know in the end where the gaol post going to be.

智者千虑,必有一失;愚者千虑,必有一得

得民心者得天下,失民心者失天下

(08-06-2014, 12:06 AM)cfa Wrote: 1. 智者千虑,必有一失;愚者千虑,必有一得

2. 得民心者得天下,失民心者失天下

cfa,
至理名言。佩服、佩服。

1. I think LHL knows this well. the million dollar salaries make it difficult to justify G's mistakes. he might take some actions to update his lieutenant's salary gap vs the $1k salary.

2. Thailand comes into my mind immediately. My thought is it works most of the time too. But, moving forward, I predict the elite(in BKK) will be given more votes per person as compare to the farmers(in province). Malaysia faced the same issues but the ruling party prefers status quo to their advantage.
SGP?

Love Compassion


Earth day - save the world everyday.

(07-06-2014, 08:21 PM)CY09 Wrote: Finally someone who posts this figure so clearly! Here are my comments

From GIC's website, they have been capable of producing 6.5% per annum over 20 years. On the contrary, CPF members are offered a coupon rates of 2.5% to 5.00%.

Lets now compare this to the insurance analogy, to be exact Tokio Marine. From Tokio marine's track record, I remember the group has been able to yield 7% for policyholders in its diversified portfolio and has a record of returning 5.25% (the advertised amount on their policy sheet). I am sure many forumers here will know the advertised 5.25% is never the real figure and the actual returns are closer to 4.75%. In the process of doing so, Tokio Marine has earn good profits and remunerated thousands of insurance agents and their supervisors commission for getting naive people to sign up life policies.

Using this analogy, I will like to ask: Do you think the coupon rates currently are fair to CPF members? Discuss.

Maybe the problem is that it is not clear if CPF is meant to be a retirement/savings fund or is it an investment fund? You would expect a decent but not high, interest rate from a savings fund. An investment fund will require a risk/return trade off, which the CPF does not (since the amounts are guaranteed). You can't have both.

If we have a higher return on CPF accounts, the government may be forced to take more risks in their investments, and then when Sh*t happens, the system breaks down again.

Actually CPF members can use their funds to invest in unit trusts and buy stocks (subject to limits). So if they wish for a higher return, they have the freedom to take risks with their money. So those who are financially well off and savvy will probably not depend heavily on CPF for retirement.

Those people who are less financially well off and not financially savvy (meaning not Valuebuddies forummers ) have little options because their CPF savings are not enough to retire. Perhaps the government can use more of their GIC/Temasek returns to provide more social benefits to these group of people, rather than give a higher rate of return for all CPF accounts. It is a targeted solution at those people who need it most.

Which is why post #153, I suggested only increasing the SA/MA account for the first $40,000

Increasing the returns for this porportion will not hinder GIC's current investing strategy and help low/middle income meet retirement adequacy. This is because currently they are earning well in excess of the coupon rates that is to be paid to the members.

Secondly, the current CPF-IS scheme can be improved. Our SA is locked up (since it is likely almost our entire SA fund will be transferred to fund our CPF Life payouts) and there is very limited use for SA funds which constitutes a lot of our CPF savings. Financially savvy CPF members are unable to optimize this funds. Personally, I will like if STI ETF funds are made available for SA other than bond and balanced funds. It is true that OA is currently usable for investments, however, given the OA is always used to draw down for our housing needs, the end result is that for low/middle-income individuals, our SA balance at 55 is equal or slightly higher than OA balance.

At age 35-40, our SA is likely to be very much higher than OA. At this age gap, if an individual puts his SA funds to good use (e.g. investing in STI ETF), he will be able to reap higher returns and use compounding over time to his advantage.

(08-06-2014, 09:47 AM)CY09 Wrote: It is true that OA is currently usable for investments, however, given the OA is always used to draw down for our housing needs, the end result is that for low/middle-income individuals, our SA balance at 55 is equal or slightly higher than OA balance.

This is another example of why the system needs a revamp. The use of OA for housing has lead to depleted savings because of high flat prices.

By tying OA to property prices means the government has to control flat prices. Which hopefully they can do now with the property cooling measures and increased supply.

CY,
rgds to buying STI ETF using CPF-SA.
This might not be a good idea.

my story?

I remember having a feast with a Japanese colleague during the roaring .com bubble-ish time.

Being naive, I told him that Japan Nikkei is charging up like a bull (because I read news everyday that reported record breaking stock prices)

He looked at me as if I'm not from this planet.
"We are at 20,000 point. This is only half of our peaked where most Japanese dash out our hard earn money into stock market."
"Still got long way to go, my friend."

++++++
Next few months, prove that he is right, the market crash again.

If you look at today's Nikkei, it's only 15,000 ... even less than .com period and don't even think about its peak of 40,000 where many people money is in.

++++++++
I am glad that I learn from my Japanese friends and it gives me a balance view to look at STI.
I am actually quite certain that don't says 33.3333% seats goes to oppositions.
I am quite sure that if our foreign minister lost his election in 2016, it will never be BAU for SGP.

Anyway, we had already jump across the hurdle, we are blessed.

[Image: nu9a8e8u.jpg]
Love Compassion



Earth day - save the world everyday.

The mindset most useful will be, don't even think about the money in CPF.
When the day it releases to you, it will be like hitting lottery.
Better off living your life without thinking about it.
Its our money but cannot touch.
Much like buying insurance.
Lump sum payment down the road. In the meantime, every month put money in it.

(08-06-2014, 01:33 PM)kagemusha Wrote: The mindset most useful will be, don't even think about the money in CPF.
When the day it releases to you, it will be like hitting lottery.
Better off living your life without thinking about it.
Its our money but cannot touch.
Much like buying insurance.
Lump sum payment down the road. In the meantime, every month put money in it.

No lah, not like that leh. i am sure many VBs profited from CPFIS alone. But many more people can't make even 2.5% ROI. And there are many people on different cases of financial circumstances why they are not happy about CPF. Most VBs who are investments savvy, should have nothing much to complain about. But we should still speak out for our less fortunate or less investment savvy fellow Singaporeans. No?

The heart is willing but the thunder is immovable.
We can discuss and talk and find solution but the ultimate decision is not ours to make.
If you cannot change the course of events by participation, why participate?
saying singaporeans not caring about politics is bull....