Speaking at a CPF seminar session today (Oct 1), Manpower Minister Lim Swee Say claimed that Singaporeans are finding the country’s retirement system “harder and harder to understand”:
“The feedback we’re getting from the ground is that they find the CPF system is getting harder and harder to understand. And as a result, when it’s time for them to make decisions, for example, which CPF Life plan to make and so on, they find that it can be confusing for some of them.
I would say that, on the whole, judging from the discussion, we still have a long way to go, to help our public understand that these are the simple options available; what the key differences are, across these simple options; and at the same time, help them make the decision that will best suit their requirements.
Our residents are now interested to find out – this is where the CPF system is today, and the government has agreed to introduce some of these options but they want to know, how would these new options fit into today’s options.
So what we’re trying to do now is to present an overall picture so some of the recommendations started since this year so now they see how these new options fit into the overall system.”
Minister Lim Swee Say also claimed that Singaporeans are ignorant of the CPF system and such “dialogues” are necessary to “better explain” the policies.
The country’s CPF system is currently undergoing review because of the poor state of retirement among elderly Singaporeans today. Singaporeans have been told by the government to remove the retirement age and that they should continue to work for as long as they can.
CPF’s accumulation is by far the slowest with the lowest interest rate return among retirement funds in the world. The low interest rate offered by CPF is taken advantage of by the country’s two sovereign wealth fund companies, Temasek Holdings and GIC. These two borrowed cheap funds from the CPF to invest in private equity markets around the world, and then pocket the difference in profits to redirect the surplus into the national reserves. The amount of national reserves is unknown and is authorised for government’s use by the country’s president. However, Prime Minister Lee Hsien Loong controls the single-party parliament, the puppet President and himself sits as the chairman of GIC while his wife the CEO of Temasek Holdings.