In a press release by the Ministry of Manpower (MOM) today (Oct 2), the PAP-majority Parliament has proposed changes to the CPF Act to allow more Singaporeans to transfer their CPF money to their parents and grandparents. Currently, Singaporeans can only transfer excess funds after fulfilling a minimum S$166,000 Retirement Sum. The new CPF law will allow Singaporeans to start transferring their CPF funds as soon as they fulfil half of the Retirement Sum at S$83,000.

MOM called this a “concession” in their press release:

“The latest concession will give members who are providing for their parents and grandparents more options to strengthen their parents’ and grandparents’ retirement adequacy.”

While MOM claimed that transferring CPF funds from the children is a way of helping the older folks to retire, the move will entrap ignorant Singaporeans who did so to lock up more money in CPF, leaving themselves with lesser in the future. CPF pays the world’s lowest interest rates among all retirement funds at 2.5%, exposing CPF account holders to yearly inflation losses. Malaysia’s equivalent retirement system EPF pays 5.7% for 2016, more than doubled that of Singapore’s CPF.

The CPF funds and interest rates are managed by the Monetary Authority of Singapore, under the Prime Minister’s Office. Borrowing the funds is the country’s two sovereign wealth fund companies, GIC where PM Lee Hsien Loong is Chairman, and Temasek Holdings where PM Lee’s wife Ho Ching is CEO.

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