CPF was "100 per cent safe''

(09-07-2014, 10:10 AM)CityFarmer Wrote: IMO, in term of performance, we should not include the idle cash not managed by both GIC and Temasek.

In GIC, 10-year long term return in US$ was 8.8%, and Temasek 10-year return was 13%, so it is a valid question to ask why not CPF? The answer was provided, because the mismatch of mandate between CPF board with GIC/Temasek...

Why not? The idle cash is partly there due to CPF rules, i.e. a member can withdraw for housing, investments, medical, education, etc at at short notice...

(09-07-2014, 01:27 PM)HitandRun Wrote:

(09-07-2014, 10:10 AM)CityFarmer Wrote: IMO, in term of performance, we should not include the idle cash not managed by both GIC and Temasek.

In GIC, 10-year long term return in US$ was 8.8%, and Temasek 10-year return was 13%, so it is a valid question to ask why not CPF? The answer was provided, because the mismatch of mandate between CPF board with GIC/Temasek...

Why not? The idle cash is partly there due to CPF rules, i.e. a member can withdraw for housing, investments, medical, education, etc at at short notice...

The liquidity management of the CPF members is done by CPF Board. The Finance minister is not going to care about CPF liquidity per se as it is an independent unit unless CPF calls for help

You are talking about performance evaluation and cashflow of different entities though they are connected.

(09-07-2014, 01:35 PM)specuvestor Wrote: The liquidity management of the CPF members is done by CPF Board. The Finance minister is not going to care about CPF liquidity per se as it is an independent unit unless CPF calls for help

Lukong simi? So if CPF member needs money, what does CPF Board do => sell SSGS. Who is the joker that is buying or selling SSGS to CPF Board on a on-call basis? He does not need a cash float? What if he says all the money is locked up with GIC and Temasek earning the wonderful returns? How?

It's like asking banks for all the profits it derives from deposits it accepts.

Does it ever happen?

There is nothing new about what Mr Tharman said. It similar to different departments (cpf, gic, Temasak etc) within a corporation (gov), tasked for different functions. But when it comes to balance sheet and P/L, there is only one that the shareholders (citizens) look at. And as a shareholder, we are only interested in what the dividend we received. And it's now 2.5% for the OA. To be it could be better given the it's high profit/cash flow, it's too low.

I haven't heard anyone saying that he/she would give up his/her return from CPF or be willing to pay if GIC can't make adequate return or worse, if GIC makes a loss.

Yet, we keep hearing demand that CPF's return should be better?

(09-07-2014, 04:32 PM)Freenasi Wrote: There is nothing new about what Mr Tharman said. It similar to different departments (cpf, gic, Temasak etc) within a corporation (gov), tasked for different functions. But when it comes to balance sheet and P/L, there is only one that the shareholders (citizens) look at. And as a shareholder, we are only interested in what the dividend we received. And it's now 2.5% for the OA. To be it could be better given the it's high profit/cash flow, it's too low.

From the perspective of a CPF shareholder (member), you got the appropriate return with the risk profile of the "investment"

From the larger perspective of a Singapore shareholder (citizen), you got the return, not only from interest of CPF (department), but from other subsidies of various departments e.g. HDB, education, health-care etc.

(09-07-2014, 04:49 PM)freedom Wrote: I haven't heard anyone saying that he/she would give up his/her return from CPF or be willing to pay if GIC can't make adequate return or worse, if GIC makes a loss.

Yet, we keep hearing demand that CPF's return should be better?

I am one of those strange ones who have just transferred $ from my CPF OA to my CPF SA to max out the new higher limit of the latter. To me 4% risk free (AAA rated) in today's environment is a really great deal.

Even the 2.5% CPF OA is good as I can use it to hold my cash buffer as I gradually raise my stock holdings to 100% of my net worth (this makes sense because I am only 3 years away from 55).

So I am actually quite happy with CPF overall but Tharman's speech has given me reason to pause. I quote from today's Business Times, front page article entitled "Government protects CPF members from risks: Tharman" - "In the five years following the global financial crisis until March last year, GIC managed a return of only 2.6 per cent in US dollar terms, which translated to 0.5 per cent in Singapore dollars."

Now I am (a little) worried about getting my CPF money above the minimum sum back when I do reach 55.

(09-07-2014, 04:49 PM)freedom Wrote: I haven't heard anyone saying that he/she would give up his/her return from CPF or be willing to pay if GIC can't make adequate return or worse, if GIC makes a loss.

Yet, we keep hearing demand that CPF's return should be better?

where do you think the money will eventually come from, assuming GIC has been making loss until it drop below all CPF balance.

(09-07-2014, 05:25 PM)aspeed Wrote:

(09-07-2014, 04:49 PM)freedom Wrote: I haven't heard anyone saying that he/she would give up his/her return from CPF or be willing to pay if GIC can't make adequate return or worse, if GIC makes a loss.

Yet, we keep hearing demand that CPF's return should be better?

where do you think the money will eventually come from, assuming GIC has been making loss until it drop below all CPF balance.

The government can fire the current fund managers and hire better ones. The government can borrow. The government can divert its tax revenue to pay CPF return. The government can adjust the expected return of CPF.

There are many ways before the government can inflate it away.