MPs offer ideas to improve CPF

Referring to flinger's post #165 in response to koh_52's post #164 about the lack of transparency which I find is one word used very vaguely and not everyone have the same idea.

There are people who looks at the diagram posted, and decided that it is crystal clear; but there are people who insists to trace the money to MAS, GIC.

For me, I won't ask where the money goes to beyond SSGS. Why? Because it will be like when I pay $1.00 for my share purchase, the broker ask me where my $1.00 comes from. Is it from my salary? Is it from my dividend? Is it from my bank interests? How to answer question like this? Money is fungible!!

I would like to hear from buddies here what they look for in terms of transparency.

I do see more can be done in the cpf system to help locals and to be improved on. For example, if the purpose of cpf is to help citizens build up retirement fund, why are PRs/FTs given the same interest rate? I have known some PRs transfer money from OA to SA to take advantage of the higher rate of 4% interest. They are doing this knowing that they can withdraw all cpf when they leave this country. This priviledge for PRs should be reviewed.

From a investor viewpoint, if the G is able to achieve 6.5% return on equity (equity in this context would refer to our CPF monies deposited with them) over a period of 20 years and give out 2.5% as annual dividend in our ordinary account which would translate to 38% earnings payout as dividends annually and use the balance 72% to reinvest and achieve higher growth and strengthen the country's balance sheet, I would say this is a sound management and good company to be vested in. Assuming a PE ratio of 10 to which foreign investors maybe willing to pay 10 times to buy the asset (i.e our house) from us as shareholders of the country over its initial price 20 years ago (i.e 3 room hdb cost 30k at 20 years ago and now 300k) I would say the country as a whole has done considerably well over the past 20 years. But I cannot say the same for the next 20 years.

Oh and not forgetting, we are a highly diversified company with investments in all types of industry. Recently I heard the mgmt may be using shareholders' equity to buy some trains? Oh... we are truly a high capex company. That's why the need to transform our balance sheet to more financial services industry and shift towards robotics manufacturing? Hmm... running such a humongous company is not easy huh. Still got interest rates, trade deficit and defence (another huge but cannot do without capex) to consider....

😇天堂与地狱😈就在当下

(09-06-2014, 01:40 PM)Freenasi Wrote: I do see more can be done in the cpf system to help locals and to be improved on. For example, if the purpose of cpf is to help citizens build up retirement fund, why are PRs/FTs given the same interest rate? I have known some PRs transfer money from OA to SA to take advantage of the higher rate of 4% interest. They are doing this knowing that they can withdraw all cpf when they leave this country. This priviledge for PRs should be reviewed.

Actually, based on what you have said, a "proper" implementation would be to disallow the PR folks from contributing into CPF at all. Then they will not be in the way and taking away the opportunity from citizens to earn as much from the CPF/GIC interest as possible. No need to share, everything only for Singapore citizens, yes?

PS: - only PR, because work permit, EP, S-Pass which you have referred to as FTs don't get to put money into CPF. You know that, don't you?

Pls do not forget that if non-citizen are exempt from contributing to cpf, they will be "cheaper" than us by abt 20%. Who do you think the local companies will prefer to hire?

(09-06-2014, 01:50 PM)thefarside Wrote:

(09-06-2014, 01:40 PM)Freenasi Wrote: I do see more can be done in the cpf system to help locals and to be improved on. For example, if the purpose of cpf is to help citizens build up retirement fund, why are PRs/FTs given the same interest rate? I have known some PRs transfer money from OA to SA to take advantage of the higher rate of 4% interest. They are doing this knowing that they can withdraw all cpf when they leave this country. This priviledge for PRs should be reviewed.

Actually, based on what you have said, a "proper" implementation would be to disallow the PR folks from contributing into CPF at all. Then they will not be in the way and taking away the opportunity from citizens to earn as much from the CPF/GIC interest as possible. No need to share, everything only for Singapore citizens, yes?

PS: - only PR, because work permit, EP, S-Pass which you have referred to as FTs don't get to put money into CPF. You know that, don't you?

(09-06-2014, 01:57 PM)funman168 Wrote: Pls do not forget that if non-citizen are exempt from contributing to cpf, they will be "cheaper" than us by abt 20%. Who do you think the local companies will prefer to hire?

Assuming that all unit labors are equivalent and that you can interchange people and jobs with perfect matches, yes I agree that the non-payment of CPF by foreign talents will disadvantage Singapore citizen workers, and 20% is a significant number.

I am happy to pay higher cost for everything, if the government is willing to step up and put everyone into the same system (i.e. CPF). Does that solve the issue? How about the following questions:

1. Why are they having the same interest?
2. Why are they allowed to take out the money when leaving?
3. Why are they matched the same 16% as citizens?
4. Why are their contributions tax deductible for employers
5. Why are they allowed to invest in the same non-CPF instruments as citizens?

How about just taxing all companies 20% extra for all foreigner headcount? I think that's a great idea that will completely level all playing fields between Singaporeans and foreigners. Actually something like 40% would be good as well because that accounts for the tax differences between some foreign jurisdictions and here - after all they are all having a great time sheltering under Singapore's low tax system and sucking high salaries while being here.

Everybody will pay; maids, childcare teachers, bangalas, whatever - you name it the government will tax it.

Then distribute all the proceeds into the CPF accounts of Singaporeans (citizens only, PR not included) as extra interest. Kill two birds with one stone - great solution?

(09-06-2014, 02:13 PM)thefarside Wrote:

(09-06-2014, 01:57 PM)funman168 Wrote: Pls do not forget that if non-citizen are exempt from contributing to cpf, they will be "cheaper" than us by abt 20%. Who do you think the local companies will prefer to hire?

Assuming that all unit labors are equivalent and that you can interchange people and jobs with perfect matches, yes I agree that the non-payment of CPF by foreign talents will disadvantage Singapore citizen workers, and 20% is a significant number.

I am happy to pay higher cost for everything, if the government is willing to step up and put everyone into the same system (i.e. CPF). Does that solve the issue? How about the following questions:

1. Why are they having the same interest?
2. Why are they allowed to take out the money when leaving?
3. Why are they matched the same 16% as citizens?
4. Why are their contributions tax deductible for employers
5. Why are they allowed to invest in the same non-CPF instruments as citizens?

How about just taxing all companies 20% extra for all foreigner headcount? I think that's a great idea that will completely level all playing fields between Singaporeans and foreigners. Actually something like 40% would be good as well because that accounts for the tax differences between some foreign jurisdictions and here - after all they are all having a great time sheltering under Singapore's low tax system and sucking high salaries while being here.

Everybody will pay; maids, childcare teachers, bangalas, whatever - you name it the government will tax it.

Then distribute all the proceeds into the CPF accounts of Singaporeans (citizens only, PR not included) as extra interest. Kill two birds with one stone - great solution?

Perhaps theological but also applicable to looking after your finances:

http://www.mennonitechurch.ca/files/news..._v6n08.pdf

Moral of the story I would say is to always count the horse's teeth...

(09-06-2014, 02:13 PM)thefarside Wrote:

(09-06-2014, 01:57 PM)funman168 Wrote: Pls do not forget that if non-citizen are exempt from contributing to cpf, they will be "cheaper" than us by abt 20%. Who do you think the local companies will prefer to hire?

Assuming that all unit labors are equivalent and that you can interchange people and jobs with perfect matches, yes I agree that the non-payment of CPF by foreign talents will disadvantage Singapore citizen workers, and 20% is a significant number.

I am happy to pay higher cost for everything, if the government is willing to step up and put everyone into the same system (i.e. CPF). Does that solve the issue? How about the following questions:

1. Why are they having the same interest?
2. Why are they allowed to take out the money when leaving?
3. Why are they matched the same 16% as citizens?
4. Why are their contributions tax deductible for employers
5. Why are they allowed to invest in the same non-CPF instruments as citizens?

How about just taxing all companies 20% extra for all foreigner headcount? I think that's a great idea that will completely level all playing fields between Singaporeans and foreigners. Actually something like 40% would be good as well because that accounts for the tax differences between some foreign jurisdictions and here - after all they are all having a great time sheltering under Singapore's low tax system and sucking high salaries while being here.

Everybody will pay; maids, childcare teachers, bangalas, whatever - you name it the government will tax it.

Then distribute all the proceeds into the CPF accounts of Singaporeans (citizens only, PR not included) as extra interest. Kill two birds with one stone - great solution?

Wouldn't a simple withholding tax do? Just retain x% of whatever that is withdrawn by PRs leaving Singapore, with x% being a function of purchasing power parity?

(09-06-2014, 08:49 AM)Temperament Wrote: i also don't understand why people who are happy and contented with CPF need to join in this CPF forum. And makes people who are not so happy with some aspects of CPF suspect something is amiss with people who are happy with CPF.

Actually, I don't intend to rely on CPF fully for my retirement and I tend to treat CPF as a riskless reserve.

What I don't get are the illogical arguments I see. I also deliberately (as a social engineering exercise) posted many redundant comments along the lines of "but you can use CPF to do precisely what you accuse CPF of not allowing (higher returns)" and I've been generally ignored.

I think that this CPF Return issue is just a stalking horse for people to complain about the government or perhaps to avoid the real issue - that they really want the CPF money now.

(09-06-2014, 01:29 PM)egghead Wrote: I would like to hear from buddies here what they look for in terms of transparency.

Personally, I think that this is part of a global problem of figuring out where future growth is going to come from. The growth model in the past lifted our country to first world status but by its design also created income inequality, low income wage stagnation and high costs of living.

I think our govt has prudently recognized the problem and has rolled out lots of policies to rebalance the economy. Unfortunately, their impact is small and not fast enough. There comes a point where we see these policies as oppression instead of delayed gratification. Attacking the CPF is just an excuse to show that we are angry.

On hindsight, the govt missed its chance to move faster in resolving these issues before the current anti establishment sentiment came to a boiling point. Addressing the transparency of the CPF is just part of it, now the bigger problem is to rebalance the economy and pacify the people at the same time, not easy at all!