Government may make buying annuity compulsory
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The trouble is, many people have yet to realise that CPF isn't to be relied upon for retirement anymore. The Govt indicated that they are thinking of raising the retirement age, and as yet, no one from the baby boomer generation born in the 1950s and 60s have yet to even take out the CPF. What happens when they attempt to take it out is anyone's guess (except the Govt since they hold the figures and refuse to give us details on how it used the monies and wasted etc.)Originally posted by eagle:I think CPF was a genius scheme, no matter how unpopular/popular
1. Forced savings for Singaporeans who cannot "manage" money
2. Increased coffers for government to invest, provided net investments are positive. A warchest too small is hard to govern with. It does make strong economical sense... Curbs unnecessary spending...
But the way CPF control is evolving now.... makes the government seems a bit mercenary...
The main problem in Singapore is "compulsory"
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i know wat you said here means.Originally posted by Fingolfin_Noldor:The trouble is, many people have yet to realise that CPF isn't to be relied upon for retirement anymore. The Govt indicated that they are thinking of raising the retirement age, and as yet, no one from the baby boomer generation born in the 1950s and 60s have yet to even take out the CPF. What happens when they attempt to take it out is anyone's guess (except the Govt since they hold the figures and refuse to give us details on how it used the monies and wasted etc.)
End of the day, it's just some data/figures-punching into the computer.
...$300,000 donated to charity from me ! (originates from taxpayers).
...Payouts to elders forever ! (originates from taxpayers).
End of the day, public money in Sg Inc given away is considered 'loss', and 'loss' is dirty becos MONEY IS VERY IMPORTANT to me. -
Even if the government kept quiet about the money and the 'wasted' amount, at the end of the day (I mean at 62 yrs old :lol
, we still get our interests and money back.
Any investment carries a risk... We cannot expect government investments to be always earning... It is the net returns that are the most important.
It's just like putting money in the bank's super long-termed fixed deposit. You don't question how they spend the money to generate interests. You will bother only the interests you get.
Anyway I'm still wondering... Why make buying annuity compulsory? Why can't they just increased the amount to be put into the special account? Isn't about the same? -
it's like a prepayment, you see, like EZ-Link Card, before you take transport, you prepay first.Originally posted by eagle:Even if the government kept quiet about the money and the 'wasted' amount, at the end of the day (I mean at 62 yrs old :lol, we still get our interests and money back.
Any investment carries a risk... We cannot expect government investments to be always earning... It is the net returns that are the most important.
It's just like putting money in the bank's super long-termed fixed deposit. You don't question how they spend the money to generate interests. You will bother only the interests you get.
2
Anyway I'm still wondering... Why make buying annuity compulsory? Why can't they just increased the amount to be put into the special account? Isn't about the same?
The govt dislikes people who forfeit payment after taking transport, or forfeit payment after becoming old/poor. So everyone pays first, so your money maybe used to cover another person's forfeit.
End of the day, it's between taxpayer's money, to settle the dirty losses, for Money collected can be used for growth further, and Money can also be in excess if after buying annuity but die early. Exciting Opportunies are there for them to explore, evolve, and squeeze further.
Don't touch the Sg Inc public money.
(Pls bring up your questions again if explainations not good) -
While everyone is immersed with the subject of the possibility of the Singapore Government getting Singaporean Aged to get into a compulsory 'Annuity Plan' - has anyone wondered who will be the beneficiary of such an accumulation of monies collected into this 'Annuity Plan' ?
During the recent Tuesday night, CNA reported that towards the foreseeable future, if all the Aged were to gather together in one place, it will number about five times the present Toa Payoh population, and as well as five times the space of the present Toa Payoh
The present Toa Payoh occupy a space of 8 sq Km with a population of 150,000 residents.
Five times the present population and size of Toa Payoh will be 40 sq Km and 750,000 aged persons.
Can this be possible as reported by Channelnews Asia ?
The TS article mentioned that Lim Boon Heng mentioned as an illustration that if an 'Annuity Scheme' payout of $500 per month will allow one to have money over a longer period of an extra 20 years, compared to a CPF payout of $700 per month for a lesser length of time.
Did Lim Boon Heng mention the amount that the Aged will have to pay NOW, in order for the $500 to be payable per month in the future ?
If each Aged were to pay $40,000 now into an Annuity Scheme, the estimated future number of 750,000 potential Aged will be making a total contribution of $30,000,000,000.
With the Financial Institutions holding this amount before any Singapore Aged begin to collect the first $500 - some 10 to 20 years into the future, these Financial Institutions will make more then 5x this amount through their Fund Managers.
Are the Financial Institutions being altruistic coming into this Annuity Scheme ?
If one is to look at the Profit and Loss of any Financial Institutions - be it banks, insurance companies, or fund managers - they rarely suffer any major blows to their positions unless a Nick Leeson were to appear and pull the rug from under the feet of the Management.
Many US Banks were severely exposed to the Latin American financial crash during the late 1980s, with billions in debt being written off - yet not a single major US Banks collapsed, while many recovered from their hefty billion dollar losses and continue to make profits.
During the last few downturns in Singapore in 1987, 1997, and 2002 - the various financial institutions continued to make profits, when every sector of the economy were negatively affected.
If the Government is seriously concerned with the well being of the Singapore Aged, why take the last amount of CPF monies from the Aged ?
Why will the Government not utilise all the amount of monies that the Singapore Government had paid out over the years into an Annuity Scheme for the Singaporean Aged - instead of uselessly pay out to ''buy votes'' ?
If the Government continue to payout to Singaporeans as in all the various past cash payout schemes with fancy names:- SRS (in 2001), ERS and NSS (in 2002), CPF Top Up (2001 + 2005), GST Credits (2006)
- all would have amounted to just as much as - if not even more than - the $30,000,000,000 collected from the expected 750,000 Singaporean Aged.
0.5 percent taken from the Annual Billion Dollar Profits reported by GIC and Temasek Holdings will go a long way as ANNUITY premium for all the Singaporean Aged; while another 0.5 percent for the premium of a Medical Insurance Plan to cover any Singaporeans requiring medical attention.
With the current generation of Aged being late in starting their contribution to CPF, should it not be the responsibility of the Singapore Government to at least assist the Aged who have given the best years to Singapore Success ? -
Daddy: Wait ah, I need to consult my superior on a good rebuttal.
Gazelle: Moderator can we delete this post? -
CPF is like a 40 year fixed deposit. You don't get your money back until much later, but the interest gained for our money is still rather acceptable. Even though there may be losses, your money in this 'fixed deposit' remains untouched. From the consumers' point of view, it is satisfactory enough. Of course, financial gurus out there may have better uses for the money.Originally posted by lotiman:it's like a prepayment, you see, like EZ-Link Card, before you take transport, you prepay first.
The govt dislikes people who forfeit payment after taking transport, or forfeit payment after becoming old/poor. So everyone pays first, so your money maybe used to cover another person's forfeit.
End of the day, it's between taxpayer's money, to settle the dirty losses, for Money collected can be used for growth further, and Money can also be in excess if after buying annuity but die early. Exciting Opportunies are there for them to explore, evolve, and squeeze further.
Don't touch the Sg Inc public money.
(Pls bring up your questions again if explainations not good)
To the government, CPF represents money that can be used to invest, an increase in the liquidity of government funds, and thus a larger influence in the economy.
Annuity is also both good and bad. Good points have already been listed by the government. Bad point is you get to spend less of your money overall. Excess money do go to your beneficiaries when you die....
The point here is: when you die. How are we going to use our hard-earned money when we die????????? First, raising CPF withdrawal age, now annuity... I wonder what other plans the government can come up with... Just because a certain person can live till 90+ and still has the ability to continue to work doesn't mean everyone here can! As pointed out by a fellow forumite here, our average age for males is around 82 => 20 years after retirement age.
A few black sheeps here and there cannot manage their own money, which is why they have nothing to spend in their old age. Why involve every Singaporean in an unpopular scheme for the sake of that few black sheeps? The government says it is our own responsibility in many matters, yet when it comes to matters of money, they have to claim 'responsibility'....
P.S. Sorry.... I just want to lament... -
There is nothing to suggest that NTUC Income did not make the annuity payments of $183 per month as promised. When you invest in pure annuities, there is no equities component to it ie no bonus. So to even get a cent of bonus is considered lucky.Originally posted by Lin Yu:Yes but his bonus was $4.60 in 2004 and $5.20 in 2005. that will not work out a return of $183 as promise. pls check that fact
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CPF's payout is higher because there is a time-limit to it, while perpectual annuities does not have any time limit. This big difference, you dont know meh. A financial planner before and yet dont understand this difference.Originally posted by Rock^Star:You must be jesting....go ask any financial planner, do your sums and you will know what I mean.
I used to be a financial planner and certainly have done my homework.
Annuities ensure that 'one does not die broke' but the payout is very much compromised compared to the CPF's.
If you refuse to accept this fact that I serve on a silver platter to you, so be it. Your loss. -
Then show us all how you calculated.Originally posted by Rock^Star:Welcome to the forum.
Just a friendly word of advice - pls don't ever encourage anyone to buy an annuity.
You will earn much lesser returns than if you park it in the CPF. However, if one likes the concept of 'not wanting to die broke', then it's their prerogative. Just that it doesn't make any investment sense.
I have done my calculations before and do heed my word. -
what talking you lar.Originally posted by frakfrakfrak:Daddy: Wait ah, I need to consult my superior on a good rebuttal.
Gazelle: Moderator can we delete this post? -
Originally posted by Atobe:
if our govt does that, it will certainly be gracious of them.
While everyone is immersed with the subject of the possibility of the Singapore Government getting Singaporean Aged to get into a compulsory 'Annuity Plan' - has anyone wondered who will be the beneficiary of such an accumulation of monies collected into this 'Annuity Plan' ?
During the recent Tuesday night, CNA reported that towards the foreseeable future, if all the Aged were to gather together in one place, it will number about [b]five times the present Toa Payoh population, and as well as five times the space of the present Toa Payoh
The present Toa Payoh occupy a space of 8 sq Km with a population of 150,000 residents.
Five times the present population and size of Toa Payoh will be 40 sq Km and 750,000 aged persons.
Can this be possible as reported by Channelnews Asia ?
The TS article mentioned that Lim Boon Heng mentioned as an illustration that if an 'Annuity Scheme' payout of $500 per month will allow one to have money over a longer period of an extra 20 years, compared to a CPF payout of $700 per month for a lesser length of time.
Did Lim Boon Heng mention the amount that the Aged will have to pay NOW, in order for the $500 to be payable per month in the future ?
If each Aged were to pay $40,000 now into an Annuity Scheme, the estimated future number of 750,000 potential Aged will be making a total contribution of $30,000,000,000.
With the Financial Institutions holding this amount before any Singapore Aged begin to collect the first $500 - some 10 to 20 years into the future, these Financial Institutions will make more then 5x this amount through their Fund Managers.
Are the Financial Institutions being altruistic coming into this Annuity Scheme ?
If one is to look at the Profit and Loss of any Financial Institutions - be it banks, insurance companies, or fund managers - they rarely suffer any major blows to their positions unless a Nick Leeson were to appear and pull the rug from under the feet of the Management.
Many US Banks were severely exposed to the Latin American financial crash during the late 1980s, with billions in debt being written off - yet not a single major US Banks collapsed, while many recovered from their hefty billion dollar losses and continue to make profits.
During the last few downturns in Singapore in 1987, 1997, and 2002 - the various financial institutions continued to make profits, when every sector of the economy were negatively affected.
If the Government is seriously concerned with the well being of the Singapore Aged, why take the last amount of CPF monies from the Aged ?
Why will the Government not utilise all the amount of monies that the Singapore Government had paid out over the years into an Annuity Scheme for the Singaporean Aged - instead of uselessly pay out to ''buy votes'' ?
If the Government continue to payout to Singaporeans as in all the various past cash payout schemes with fancy names:- SRS (in 2001), ERS and NSS (in 2002), CPF Top Up (2001 + 2005), GST Credits (2006)
- all would have amounted to just as much as - if not even more than - the $30,000,000,000 collected from the expected 750,000 Singaporean Aged.
0.5 percent taken from the Annual Billion Dollar Profits reported by GIC and Temasek Holdings will go a long way as ANNUITY premium for all the Singaporean Aged; while another 0.5 percent for the premium of a Medical Insurance Plan to cover any Singaporeans requiring medical attention.
With the current generation of Aged being late in starting their contribution to CPF, should it not be the responsibility of the Singapore Government to at least assist the Aged who have given the best years to Singapore Success ?
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Originally posted by eagle:The government says it is our own responsibility in many matters, yet when it comes to matters of money, they have to claim 'responsibility'....
Well said ! On one hand they give 'workfare', on another hand, they move further away from 'welfare' discreetly.
Annuity is also both good and bad. Good points have already been listed by the government. Bad point is you get to spend less of your money overall. Excess money do go to your beneficiaries when you die....
[/quote]
(A) The current Sg Inc coffer is continually increased with CPF, taxes (COE, Cigarettes), HDB sales, GIC Sg companies, etc. And these can be used by govt. for investment.
(B) NEW avenues are introduced. To resist any blows to this $Coffer$ collection, from bad economy, GST is increased. Now annuity is introduced.
(C) For CPF, when one dies, the excess/balance amount that goes to the beneficiaries, (e.g. $200,000) can easily come from (ie. offset) the money collected from (B), not (A), in the SAME CURRENT-MONTH/YEAR. Even more possible if annuity is introduced. (Unless too many people die together in the same-month).
So it is still just punching of data into the computer to play with figures, if figures not satisfactory, introduce new ideas.
There are already avenues for $Coffer$ to be increased. Collect more money using NEW avenues, to fully offset any losses/welfare given to people.
The word 'welfare' means 'losses' to the $coffer$. Even 'workfare' means 'losses', sometimes i think.
The point here is: when you die. How are we going to use our hard-earned money when we die ?????
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They have not thought of this yet. They are still punching data into the computer to spot unsatisfactory figures.
i lament also, for bornt in the wrong time, the computer era.
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We can narrow that to a portion of the senior citizens, those that are not financially educated.Originally posted by Fingolfin_Noldor:The trouble is, many people have yet to realise that CPF isn't to be relied upon for retirement anymore. The Govt indicated that they are thinking of raising the retirement age, and as yet, no one from the baby boomer generation born in the 1950s and 60s have yet to even take out the CPF. What happens when they attempt to take it out is anyone's guess (except the Govt since they hold the figures and refuse to give us details on how it used the monies and wasted etc.) -
talking about all these gahmen initiatives, i not so clever understand all these cheem annuities, etc. but i got only one question.
Now is golden period hor, so.....
- can gahmen restore our cpf first or not? -
who many of us will live till 100??Originally posted by Lin Yu:CNA latest news -
Originally posted by Atobe:
The idea of a 'free lunch' is simply to ghastly for our govt to accept. It is this same govt who will view such 'handout's as welfare, the same govt who views welfare as a 'dirty word'.
While everyone is immersed with the subject of the possibility of the Singapore Government getting Singaporean Aged to get into a compulsory 'Annuity Plan' - has anyone wondered who will be the beneficiary of such an accumulation of monies collected into this 'Annuity Plan' ?
During the recent Tuesday night, CNA reported that towards the foreseeable future, if all the Aged were to gather together in one place, it will number about [b]five times the present Toa Payoh population, and as well as five times the space of the present Toa Payoh
The present Toa Payoh occupy a space of 8 sq Km with a population of 150,000 residents.
Five times the present population and size of Toa Payoh will be 40 sq Km and 750,000 aged persons.
Can this be possible as reported by Channelnews Asia ?
The TS article mentioned that Lim Boon Heng mentioned as an illustration that if an 'Annuity Scheme' payout of $500 per month will allow one to have money over a longer period of an extra 20 years, compared to a CPF payout of $700 per month for a lesser length of time.
Did Lim Boon Heng mention the amount that the Aged will have to pay NOW, in order for the $500 to be payable per month in the future ?
If each Aged were to pay $40,000 now into an Annuity Scheme, the estimated future number of 750,000 potential Aged will be making a total contribution of $30,000,000,000.
With the Financial Institutions holding this amount before any Singapore Aged begin to collect the first $500 - some 10 to 20 years into the future, these Financial Institutions will make more then 5x this amount through their Fund Managers.
Are the Financial Institutions being altruistic coming into this Annuity Scheme ?
If one is to look at the Profit and Loss of any Financial Institutions - be it banks, insurance companies, or fund managers - they rarely suffer any major blows to their positions unless a Nick Leeson were to appear and pull the rug from under the feet of the Management.
Many US Banks were severely exposed to the Latin American financial crash during the late 1980s, with billions in debt being written off - yet not a single major US Banks collapsed, while many recovered from their hefty billion dollar losses and continue to make profits.
During the last few downturns in Singapore in 1987, 1997, and 2002 - the various financial institutions continued to make profits, when every sector of the economy were negatively affected.
If the Government is seriously concerned with the well being of the Singapore Aged, why take the last amount of CPF monies from the Aged ?
Why will the Government not utilise all the amount of monies that the Singapore Government had paid out over the years into an Annuity Scheme for the Singaporean Aged - instead of uselessly pay out to ''buy votes'' ?
If the Government continue to payout to Singaporeans as in all the various past cash payout schemes with fancy names:- SRS (in 2001), ERS and NSS (in 2002), CPF Top Up (2001 + 2005), GST Credits (2006)
- all would have amounted to just as much as - if not even more than - the $30,000,000,000 collected from the expected 750,000 Singaporean Aged.
0.5 percent taken from the Annual Billion Dollar Profits reported by GIC and Temasek Holdings will go a long way as ANNUITY premium for all the Singaporean Aged; while another 0.5 percent for the premium of a Medical Insurance Plan to cover any Singaporeans requiring medical attention.
With the current generation of Aged being late in starting their contribution to CPF, should it not be the responsibility of the Singapore Government to at least assist the Aged who have given the best years to Singapore Success ?
[/b]
It is unfortunate that a large number of the elderly cannot maintain themselves, with a combination of health-care costs, medical treatments and food supplements denying them a comfortable end to their life. Increases in GST, transportation which in turn raised the price of food, groceries etc have also had a negative impact.
The idea that CPF may be manipulated in some manner to supplement this annuity cost is disturbing, especially if it means greater contribution from the people. -
Originally posted by frakfrakfrak:Daddy: Wait ah, I need to consult my superior on a good rebuttal.
Gazelle: Moderator can we delete this post? 
Ha ha ha ha ha!!!! -
don't think they will. Few months back when LHL talked about this issue, he did not sound keen to restore CPF to the original %. NO interest for the people!!Originally posted by boredtulan:talking about all these gahmen initiatives, i not so clever understand all these cheem annuities, etc. but i got only one question.
Now is golden period hor, so.....
- can gahmen restore our cpf first or not? -
Restore CPF? hmm, don't think they will...anyway...its good news for business owners like us so our costs are lower....but in fairness...this annuity thingy is another money sucking scheme of theirs....between the two...I'd rather they raise the cpf.....its just another instance of them forcing it down your throat, whether you like it or not.....one more reason to leave this unstable little red dot.....come and join me all of you
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Agreed....frankly...I can't stand all these so called clean efficient governance....no country is totally 100% clean...and what they do with teh money is anyone's guess....Originally posted by Fingolfin_Noldor:The trouble is, many people have yet to realise that CPF isn't to be relied upon for retirement anymore. The Govt indicated that they are thinking of raising the retirement age, and as yet, no one from the baby boomer generation born in the 1950s and 60s have yet to even take out the CPF. What happens when they attempt to take it out is anyone's guess (except the Govt since they hold the figures and refuse to give us details on how it used the monies and wasted etc.)
I'd rather be in a country where there is some corruption but because of the checks and balances, the powers that be cannot withhold too much info as there is such a thing as freedom.... -
Where are you base? The gahmen here is turning the place topsy turvy to their advantage. Guess the annuity thing is just crap, but I am looking forward to see what sort of details they will provide us with this annuity.Originally posted by Coquitlam:Restore CPF? hmm, don't think they will...anyway...its good news for business owners like us so our costs are lower....but in fairness...this annuity thingy is another money sucking scheme of theirs....between the two...I'd rather they raise the cpf.....its just another instance of them forcing it down your throat, whether you like it or not.....one more reason to leave this unstable little red dot.....come and join me all of you -
what we can expect to see when we log in to "My CPF" web page
1. The amount of monthly CPF being deducted for the annuities
2. The calculated annuities monthly payout at 62 will be shown and is guaranteed because the monies are invested immediately into bonds according to the yield curve.
We will know how much we will collect monthly when we reach 62. We can check this by going online anytime using SingPass.
(this calculation is based on forward rate which is normally higher than 3 months interest rates if the yield curve is upward sloping)
In the "Lim Yan Beng" example, he locked in a 5.9% rate in 2009. It is similar to a forward rate agreement. The lack of interest payments from NTUC Income before 2009 is already computed in the forward rate.
The government is brave to introduce such an annuities plan because
a) annuities payments will be very little if the curve is flat at nearly zero percent. At that point, our government will be hard pressed for solutions.
b) they will have to either i) guarantee the annuities payments if it is managed by private insurance companies or ii) manage the annuities investments by themselves. -
Are you talking about currently we can log in and there are already info on annuity in individual's account? Hey, they have not confirmed it isn't it, how could they work so fast without letting us know more details about the annuity? I don't think so , or is this what you foresee?Originally posted by Daddy!!:what we can expect to see when we log in to "My CPF" web page
1. The amount of monthly CPF being deducted for the annuities
2. The calculated annuities monthly payout at 62 will be shown and is guaranteed because the monies are invested immediately into bonds according to the yield curve.
We will know how much we will collect monthly when we reach 62. We can check this by going online anytime using SingPass.
(this calculation is based on forward rate which is normally higher than 3 months interest rates if the yield curve is upward sloping)
In the "Lim Yan Beng" example, he locked in a 5.9% rate in 2009. It is similar to a forward rate agreement. The lack of interest payments from NTUC Income before 2009 is already computed in the forward rate.
The government is brave to introduce such an annuities plan because
a) annuities payments will be very little if the curve is flat at nearly zero percent. At that point, our government will be hard pressed for solutions.
b) they will have to either i) guarantee the annuities payments if it is managed by private insurance companies or ii) manage the annuities investments by themselves. -
This is what i foresee.Originally posted by qlqq9:Are you talking about currently we can log in and there are already info on annuity in individual's account? Hey, they have not confirmed it isn't it, how could they work so fast without letting us know more details about the annuity? I don't think so , or is this what you foresee?