According to a written parliamentary response by Manpower Minister Josephine Teo, 47% of the 3.86 million CPF Account Holders, or 1.8 million Singaporeans, are unable to meet the S$181,000 Retirement Sum in 2018. The Minister also wrote that for the remaining 53% who are able to meet the Retirement Sum, 5 in 10 have no need for their CPF money:

“For the same cohort, about 53% of active members met their Full Retirement Sum in cash and pledge at age 55 in 2016 (i.e., able to set aside the Full Retirement Sum fully in cash, or met Basic Retirement Sum in cash and provided sufficient property pledge or charge). Of this group, about 5 in 10 left additional funds in their CPF Ordinary or Special Accounts. Based on our observations, members do so because they have no immediate need of the money, or they wish to take advantage of the higher CPF risk-free interest rates.”

Unfortunately, Minister Josephine Teo’s figures revealed something more sinister: more than 1.5 million Singaporeans will never get to withdraw their CPF.

According to the CPF Board, the total funds is currently sitting at S$368 billion.

2 million CPF accounts with minimum S$166,000 (2017), including 50% property pledge (there are 1 million HDB property units in Singapore) = Meet RS in full + Meet RS with pledge = S$166 billion + S$83 billion = S$249 billion minimum
1.8 million CPF accounts holds only on average = S$346b (2017 adjusted total) -249b)/1.8m = S$53,888 maximum

This S$53,888 in 2017, after adjustments, is only about 30% of the S$181,000 Retirement Sum today. Each year, the Retirement Sum however increases by S$5,000 on average – a figure arbitrarily set by the CPF Board.

For low income workers below the age of 55, they contribute about S$4,000 in CPF contribution each year but the Retirement Sum increases by S$5,000 each year. The situation is worse for elderly workers with contribution rate as low as S$2,000 a year.

As Retirement Sum increases outpaces CPF contribution rate, this would also mean that an estimated minimum of 1.5 million Singaporeans will never reach the full retirement sum x years down the road.

GIC is the investment company managing the CPF funds, and its chairman is Prime Minister Lee Hsien Loong. Through legalised corruptions, the Prime Minister arranged for his PAP MP, Halimah Yacob, to become President so he would have free access to the CPF funds. The corrupted Prime Minister then depress CPF interest rate at 2.5% from the day he took over in 2004 for the next 14 years and counting, so GIC would be able to profit off the difference above its obligatory CPF coupon rate of 2.5%.

Alex Tan
STR Editor