The Singapore government today (Sep 21) announced that it will continue to depress interest rates of CPF retirement return due to “the continuing low interest rate environment”. CPF Ordinary Account will only pay 2.5% while the Special Account and Medisave will pay only 4% – the same rate unchanged since 2004 and also the lowest in Singapore history.
The low interest returns of CPF pales in comparison to similar government-backed retirement fund in Malaysia, the EPF, and is poorest performing retirement fund in terms of interest rate returns.
Managing the CPF funds are the country’s two sovereign wealth fund companies, GIC and Temasek Holdings. The Chairman of GIC is Prime Minister Lee Hsien Loong, while his wife, Ho Ching is the CEO of Temasek Holdings. With President Tony Tan elected with the help of Lee Hsien Loong’s single-party government, the Prime Minister effectively controls all keys of the CPF funds.
Temasek Holdings and GIC borrow CPF funds at cheap interest rates under the SSGS government securities scheme and use the funds to generate higher returns from stock markets around the world. The profit difference is not returned to CPF account holders and the anonymous amount were stashed away in the national reserves, which not even the President know how much it is.
In the upcoming Presidential election, new legislation has been written to prevent a non-PAP-endorsed candidate from contesting. Nonetheless, the country still has to go through an election to legalise the high level corruption under the dictator Prime Minister.