MPs offer ideas to improve CPF

[Temperament]

I don't think it's 100% in anything in this world. Can we imagine if someone can come out with a better CPF scheme and let the whole Singapore knows about it. And ask all those who wanted this new CPF scheme attend the speaker corner to sign a petition for the change. This is only an imagination, please.
But,
Albert Einstein once said, "Imagination is more powerful than knowledge."
Anyway, at least every 5 years you have got your one chance.

[specuvestor]

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.

However, Insurers are aware of this and this is why their returns are smoothed to ensure policyholders think they are getting positive returns annually over the long run. However, this results in a low but consistent yield of below 5% p.a.

Already answered your question sometime back BTW I'm referring to life policies not ILP

And do go and see your life insurance return profile. The returns in the first 90% of tenor is pathetic. The returns jump only when your policy is maturing.

Even with hindside, are you then saying we should let those who were able to withdraw 1/2 their CPF money in the past for their Batam purposes remain homeless and vagabonds?

It is not peculiar just to GFC but in general people like to say success is mine... failures are picked by by the society.

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.

[Temperament]

It is not peculiar just to GFC but in general people like to say success is mine... failures are picked by by the society.

Yes of course! Look at the QE by central banks of the world. Isn't our money just become less valuable?

[kagemusha]

wow, looks like alot of people attended the CPF event in Hong Lim yesterday.....

[Temperament]

wow, looks like alot of people attended the CPF event in Hong Lim yesterday.....

Yes if you study the photos of the crowd, you can say it was even more then the crowd who attended "the talk on population white paper". i think CPF really touches the raw nerve of almost all Singaporeans.

[CY09]

Hi Specuvestor,

No doubt, the first 90% of whole life is pathetic but that is because the initial returns are absorbed by the agents and sales charges incurred. However over the long run where people live until 66 years old and beyond, people are actually better off getting whole life insurance than putting your money in CPF!

I did the modelling of CPF system vs a whole life insurance payout.
Recently, I was offered a whole life insurance as I just joined the workforce and was interested to know what the payouts are like. Attached is a print screen of the payout offered till age 66. I do not have the payout till 99 because I did not sign up eventually. Lets say this annual payment of $2,300 for 20 years is put into your CPF SA/MA account, attached in the excel is how much you will get from CPF. Please see Column's C and D for the results under the current CPF system.

Note I am a believer of BTITR method and am against whole life insurance.

Edit (add on): For argument's sake, lets assume the 4.75% payout insurers advertised are attainable and they pay policyholders the advertised amount. Some readers may ask me why do I use the insurance industry to compare against our CPF system. This is because: 1) the insurance model mirrors closely to our CPF system where the insurers invest on behalf of policyholders into funds and then give us a certain payout. 2) In the process of doing so, these companies earn hundred of millions as profits and are able to employ thousands of staff. On the contrary for the CPF system, our custodian presumably makes no or little profit from doing so. The only expenses incurred should be for employees at CPF stat board and GIC fund managers. 3) The current CPF system provides us payouts till we die and in exchange we have to pledge a certain min sum to CPF life, while for insurance, we pay annual premiums and at our death we receive the payout. No doubt people will tell me CPF and whole life insurance are not the same, but this is the closest comparison in the industry I can find and thus has used it for comparison sake.

[aspeed]

However over the long run where people live until 66 years old and beyond, people are actually better off getting whole life insurance than putting your money in CPF!

There is an exit clause on min sum requirement though, you could buy a private annuity plan that match the payout of CPF Life. But doubt there is such a product with the same or lesser premium.

[egghead]

However over the long run where people live until 66 years old and beyond, people are actually better off getting whole life insurance than putting your money in CPF!

Is a private company and a State comparable?

[CY09]

I just find it hilarious that financen companies can earn millions a year administering something similar but the state can only give about same returns at no profits

[Temperament]

I just find it hilarious that financen companies can earn millions a year administering something similar but the state can't

Ha! Ha!
i think you have a valid point.