MPs offer ideas to improve CPF

(20-06-2014, 12:46 PM)egghead Wrote: Is it not easier for you to terminate your DPS policy covering your children and getting them to sign up for themselves?

This raise another confusion.
CPF member can only pay for their own DPS.

Let's see how much is the premium Chong pay for his kids DPS.

From there, we might know whether is it really DPS or something else.

LC

now we start to see why CPF is having so many issues. Everybody understand them differently.
I am sure even some of the officers are also confuse, what more about common citizens who likely will not be able to understand all the jargons....
If you make something complex, it is easy to loose track of some of the things that are done.
If changes are made, it will be hell..... some of the things will be forgotten.
Whenever I read documentations, I always find that current human understanding is not equal to what is written in the docs.

The DPS scheme was introduced in 1989 with the following amendment.

27. Act 23 of 1989—Central Provident Fund (Amendment) Act 1989
Date of First Reading : 13 March 1989
(Bill No. 22/89 published on 14 March 1989)
Date of Second and Third Readings : 7 April 1989
Date of commencement : 14 May 1989

Readers who are interested can read this amendment at the following website: Statutes On Line (Look for the CPF Act and click on legislative history)

No where was it mentioned that CPF members can buy the DPS using their CPF funds for their dependents....

(20-06-2014, 02:48 PM)kagemusha Wrote: now we start to see why CPF is having so many issues. Everybody understand them differently.
I am sure even some of the officers are also confuse, what more about common citizens who likely will not be able to understand all the jargons....
If you make something complex, it is easy to loose track of some of the things that are done.
If changes are made, it will be hell..... some of the things will be forgotten.
Whenever I read documentations, I always find that current human understanding is not equal to what is written in the docs.

Most of the people saying they are confused are doing so because they are being polite. Actually they understand quite well. It's the original story that is "confusing"

Use Malaysia's EPF as model lah...

http://www.tremeritus.com/2014/06/20/mal...res-cpf-0/

(20-06-2014, 06:28 PM)Zelphon Wrote: Use Malaysia's EPF as model lah...

http://www.tremeritus.com/2014/06/20/mal...res-cpf-0/

Not again! Slap forehead. Apples and Oranges. Apples and Oranges.

As I and others have mentioned, 100% of the CPF investible limit can be placed in the STI, which from 2003 to 2013, gained 9.2% per year (dividends reinvested). See http://einvesthub.com/markets/2014/02/12...st-10-yrs/

But if you have to compare, here's another view....

EPF returns are not far above fixed deposit rates in Malaysia (around 3+ % in the last 10 years), so the risk premium bar is very low. Put another way, EPF returns compared to risk free suck. In fact, CPF risk free interest over bank FD rates in Singapore is much greater on a relative basis than EPFs!

MYR has depreciated by about 20% against SGD in the last 10 years or about -1.7% per annum annualized, which makes EPF returns suck even more as a risky return. Put it crudely, this is the result of Malaysia's economy doing worse than Singapore's. In other words, Singapore's fiscal discipline (AAA rated) and economy contributes to your savings indirectly.

One more thing. Let's just say that the G declares it will invest some percentage of the money on behalf of members into risky investments.

Do you think it will be free from criticism? I don't think so. Feel free to google EPF and some of the criticisms against EPF. I can imagine CPF getting even more vitriol no matter how well it is administered.

One question always puzzle me. Why OA is 2.5% SA 4.0% & MA 4.0 and recently the 1st 60K of OA+SA+MA enjoy +1% more. Why OA must be so specially lower than the rests.

Because you use OA to pay for property, monthly mortgages, CPFIS, etc; and has to stay liquid. It is the same reason why short term deposit has lower interest than longer term ones.

So am i correct to say OA operates more like a banking account; only now it is better because bank's FD is so low? It's not really a state's pension(aka looking after our interest) account at all.
Have OA's rate been lower than the bank's FD?
i say definitely yes. Even when i was still working. It was really not too long ago.
Most of us who didn't know how to DIY investment just dumped it to banking FD lol!
Or bought 5 to 10 "endowment" policy from the Bank's insurance department.
i can say all this because i did it lol.