Is CPF really your money?

The government has just announced that the minimum sum in the CPF be raised to $155,000. If you take into account the medisave in CPF, the total amount is nearly $200,000. If you do not have at least $200,000 in your CPF account today, you will not be able to withdraw any cash. The minimum sum and the amount in medisave will keep increasing each year making it more and more difficult for Singaporeans to withdraw their own savings in their CPF account.

Unless you belong to the high income earners, those lower income earners will never withdraw their own savings even if they work a lifetime. It is quite obvious to any thinking Singaporean that he will not be able to withdraw his life savings in his CPF account based on the following 3 factors.

a) Minimum Sum in CPF
This minimum sum will keep increasing through the years. They say it is adjusted to inflation so that you could get a decent monthly payout when you retire. The fact that our wages are not increasing as fast as the increase in minimum sum means that we can never keep up. But if you are high income earners earning more than $10,000 a month, then it’s no issue. Fact is that most of us don’t earn that kind of salary. As such, your own money in your own CPF account is beyond your reach in that sense. When you reach 55 years, you can’t withdraw your CPF money cuz of the high minimum sum arbitrarily decided by the government.

b) Medisave
This portion of your CPF can never be withdrawn in your lifetime. It is meant for medical expenses in the event you are hospitalized. The money will be transferred to your NOK when you expire. It is now more than $40,000. It is expected to be increased over time also.

c) HDB
We know that HDB prices will also keep increasing. With housing loan stretching up to 25 yrs, by the time you finish paying your housing loan, a big chunk of your CPF is gone. Just to give you an example, my parents bought their 4-room A model in 1994 at only $101,000. Today, a much smaller 4-room flat easily costs you much more than that. The government will tell you about grants and more grants, but how many really benefit? If you are earning a decent salary, you are expected to pay your own flat. Do not expect easy grants since HDB flats are “affordable” to you.

Due to the above 3 factors, a majority of Singaporeans will not be able to get their CPF when they retire at 55 yrs. That is why so many Singaporeans are very concerned about this CPF issue. It affects them directly especially those lower income wage earners.

To arbitrarily impose a minimum sum (currently is $148,000) across the board for all Singaporeans is illogical and unjust. Those earning $1,000 to those earning more than $10,000 also subject to the same minimum sum simply doesn’t make sense at all. It is not justifiable at all given the fact that it is our own money. If it belongs to us, then we should be given an option. But as it is, there is no option at all. The government decides and justifies it without even bothering to seek your consent. Is it your real money? If it is really your money and the money really belongs to you, then you should be able to decide for yourself. Not someone decides for you and still insists that it is your own money. What sort of logic is this?

There is so much frustration and anger when the government keeps increasing the minimum sum beyond the inflation rate until Singaporeans lost faith and trust. How to justify the increase in the minimum sum when it far outstrips inflation rate with stagnant wages due to the influx of cheap foreign labour? We know that our wages are so much lower than 1st world countries due to the influx of cheap foreign labour. I’m not going to expand on this area since I’m now talking about CPF.

Another flaw is that the minimum sum doesn’t take into account healthy and fit seniors working till their 70s. Just look around you and you could see that there are tons of old people cleaning tables, toilets or selling tissue paper. My parents in their 70s are still working. That is a fact. How about those children who could support their aged parents? I’m sure providing 3 meals a day and a roof over their heads should not be a problem. In the event that the children do not want to support their aged parents, there is the Parents Maintenance law to fall back on.

As such, the government’s argument that they should not be supporting unproductive seniors in the event that they do not have monthly payouts does not really hold water here. Most Singaporeans are now wondering why is the government so persistent in holding back our CPF money by drastically increasing our CPF minimum sum year after year? Amongst us, there are many who do not have CPF savings such as self-employed hawkers, taxi drivers, odd job labourers etc. What about them? Will they perish when they grow old?

There is an old blog post written by me about 2 yrs ago relating a true story about my ex-colleague’s inability to use his CPF Special Account to pay off his outstanding housing loan and he’s struggling to live on his meagre income. It is his money and yet he can’t decide to use it to pay off his remaining housing loan. That post went viral recently with more than 5,000 hits in a day when that blogger got sued for defamation. Netizens goggle about CPF and found my old blog post. Link – Click here to read

It is no longer an issue between that blogger and the PM. The case has generated so much intense debate and discussion that even some ministers and MPs are coming out openly in concerted effort to explain their official position. That blogger has inadvertently kicked the hornets’ nest. It is not going to rest but the frustrations and anger will surely escalate. You can shut him down but you can’t shut off those heartlanders still talking in the coffee-shops. As it is, I’m sitting at EM coffee shop writing this blog, I could hear residents discussing about the CPF issue. I’m not going to repeat what they are saying cuz some of those comments are simply unpublishable here.

As far as I’m concerned, I do not care if the government uses my money to invest and make tons of money. After all, the government guarantees me 4% on my special account or 2.5% on my ordinary account. It’s just like borrowing money from the bank to invest. If I make lots of money, do I have to share with the bank? Even though in this case, I got no choice but let the government use my CPF to invest in whatever way they deem fit.

Do not forget that the government has no money by itself. The money comes from those living in the country. If the government is rich, it could do lots of things like investing heavily in infrastructure, defense, better schools and hospitals etc… But pls don’t squander our money on Children’s Games or building luxurious Club exclusively for the maids! Let the government make the money through our combined CPF savings but pls be more transparent and truthful. Return us our CPF when we reach 55 yrs. That’s what our late Dr Toh Chin Chye – ex-DPM said in parliament before. How I wish we got leaders like Dr Toh or Dr Goh in government today. Do not simply keep on increasing the minimum sum to deny us our own life savings. Give us an option whether to withdraw our CPF or leave it there for safekeeping to earn interest. If it is so attractive to keep our CPF with the government, I’m sure many will do it willingly. Denying us to our own life savings in our CPF will definitely ignite the time bomb. That is the crux of the matter.

To be fair to the PM, he has NOT sued many bloggers before. Did he proceed to take full legal action against them? Many a time, the PM stopped short of taking them to court except in this case. Why make that blogger a martyr? There is nothing for him to lose and much more for the PM. At most, the blogger is declared a bankrupt but he has just woken the masses. I believe the PM is in a dilemma. To go all out or to pull back? That’s the question? CPF is one of the pillars of our nation. It is now under attack. How is he going to handle it?

If I were the PM, I would try to open up and be more transparent. Most importantly, give Singaporeans a choice or an option. With that, there will be no more issue. Why go against the flow of the current or against the wind direction? Ours is a democracy where one man one vote will decide the government of the day? This government compared to many other countries in the world has done very well so far albeit imperfect in certain areas, should not let the CPF issue be it’s Waterloo. Remember the CPF issue affects every Singaporean. It is an issue closest to their hearts. It is a time bomb that need to be diffused as quickly as possible. As it is, damage control is in place with so many Ministers and MPs speaking out and making comments but they still fail to address the root cause of the CPF issue.

I’m merely stating my own opinion on the CPF issue. I believe as a true blue Singaporean, I’ve got the right to my own view on this controversial issue where every mother’s son is talking about. Let’s hope that the government will heed the comments, opinions and cries of Singaporeans. It is in their interests to do so.