Associate Professor Chia Ngee Choon, an economist from the National University of Singapore, lashed out at the amount of CPF payout for low income elderly and lambasted the present CPF retirement system for being inadequate.
Low income elderly tend to receive about S$300 CPF payout when they retire and the professor said that the CPF “doesn’t address the retirement adequacy for vulnerable groups”. Among this group, she explained, constitutes the low income group, casual workers, stay-home mothers and singles with no family support.
The Professor then proposed a minimum CPF payout of S$450 to S$600, based on her calculation off the basic income and expenditure patterns of retiree households. This amount, she said, includes only food expenditures and basic goods like utility bills. Non-basic goods like recreational activities are excluded in her calculation.
Professor Chia also criticised the present CPF system saying it risks unintended consequences, such as disincentives to save, work and creating a clutch mentality.
Another professor from the NUS Business School, Professor Joseph Cherian, agreed with her presentation and suggested two-way transfers between the Special Account and Ordinary Account.
Presently, CPF funds are indirectly managed by Temasek Holdings which borrowed from the CPF Board through a series of cheap bonds called “Special Singapore Government Securities” (SSGS). Any difference in profits from SSGS and the investments made by Temasek Holdings is pocketed by the Singapore Government in the pretense of filling in the national reserves, instead of returning the extra profits to CPF account holders.
The CEO of Temasek Holdings is the wife of Prime Minister Lee Hsien Loong, who is also the chairman of the other sovereign wealth fund company, GIC. The former chairman of GIC is Lee Hsien Loong’s father, the deceased dictator Lee Kuan Yew.