“GIC does not use CPF funds to invest”
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In reply to a question by opposition MP Low Thia Khiang (Hougang) on whether the GIC uses funds from the CPF funds to invest, Dr Ng said: “The answer is no.”
Using a banking analogy, he explained,
“You put money in a bank and you agree that you put it there and you get 2 per cent. The bank publishes a report and says of all its earnings, it earned 8 per cent. You go to the bank and say, I want 8 per cent. It doesn’t work.”
He said that the Government bears the liabilities in the same way that the bank does.
“The Ministry of Finance has taken our liabilities. What the Ministry of Finance does with its money is (its) consideration. But… the CPF Board… promises a risk-free rate to (CPF) members. And that is how it works.” -
Singapore govt should not run the country like a bank and has a duty not to make profit out of SingaporeanÂ’s retirement savings. The Govt wrongly assumes that Singaporeans cannot take any form of risks or stomach any volatility in the market. There is no middle ground where one could be holding 30% equities and 70% bonds.
The " risk free returns" given by the CPF board contrary to its name is not really risk free. The Govt has been raising GST regularly causing regular inflation and eating into the real value of the retirement savings.
The consequence of earning these low "risk free returns" could be having even higher retirement age when the next generation of Singaporeans retires. -
Nope. I believe GIC does not use CPF funds to invest.
But nothing is stopping CPF to invest in GIC -
yeah.. that's the way i see things too
play on words..Originally posted by Ponders:Nope. I believe GIC does not use CPF funds to invest.
But nothing is stopping CPF to invest in GIC -
different words, same conclusion.
just whether Temasek is seen as the one askin for funds,
or a stat board readily giving funds to Temasek...
doesn't change much now, does it -
Originally posted by Ponders:Nope. I believe GIC does not use CPF funds to invest.
But nothing is stopping CPF to invest in GIC -
PM's Husband: it looks a good time to invest in Temasek..
CPF Boss: for the sake of the people, we will invest in Temasek because it's a good time to invest..
uhh.. is this also called insider trading?Originally posted by sir sickolot II:different words, same conclusion.
just whether Temasek is seen as the one askin for funds,
or a stat board readily giving funds to Temasek...
doesn't change much now, does it -
is it even trading in the first place?Originally posted by the Bear:PM's Husband: it looks a good time to invest in Temasek..
CPF Boss: for the sake of the people, we will invest in Temasek because it's a good time to invest..
uhh.. is this also called insider trading? -
Penal Code legalised homosexuality?Originally posted by the Bear:PM's Husband: it looks a good time to invest in Temasek..
CPF Boss: for the sake of the people, we will invest in Temasek because it's a good time to invest..
uhh.. is this also called insider trading? -
Bank accountable to shareholder in terms of losses and profitability.Originally posted by kilua:In reply to a question by opposition MP Low Thia Khiang (Hougang) on whether the GIC uses funds from the CPF funds to invest, Dr Ng said: “The answer is no.”
Using a banking analogy, he explained,
“You put money in a bank and you agree that you put it there and you get 2 per cent. The bank publishes a report and says of all its earnings, it earned 8 per cent. You go to the bank and say, I want 8 per cent. It doesn’t work.”
He said that the Government bears the liabilities in the same way that the bank does.
“The Ministry of Finance has taken our liabilities. What the Ministry of Finance does with its money is (its) consideration. But… the CPF Board… promises a risk-free rate to (CPF) members. And that is how it works.”
CPF accountable to government who is accountable to the citizens of Singapore (who are the ultimate shareholder). But then again, the government chooses to segregate itself from the the citizens, therefore whatever money they make from investments goes to the government's coffers, not the citizen's pocket.
CPF can always guarantee to pay up whatever nominal money it owes to it's members, because MAS can always increase money supply if there is a need to. -
I see there is no end to the debate on one's own money held by CPF. Trouble is when we put our savings in a bank that pays lousy interest rate, nobody complains, not even Low Thia Kang. But your CPF savings earn 2.5% and many forumers here are unhappy. Many also think they can manage their monies better, and feel CPF is not doing them any favour. CPF is a compulsory saving scheme in which employers are also required to contribute. Why don't you unhappy people go work in China, Indonesia, Australia, USA and see how much you can saved before you kick the bucket!Originally posted by kilua:Singapore govt should not run the country like a bank and has a duty not to make profit out of SingaporeanÂ’s retirement savings. The Govt wrongly assumes that Singaporeans cannot take any form of risks or stomach any volatility in the market. There is no middle ground where one could be holding 30% equities and 70% bonds.
The " risk free returns" given by the CPF board contrary to its name is not really risk free. The Govt has been raising GST regularly causing regular inflation and eating into the real value of the retirement savings.
The consequence of earning these low "risk free returns" could be having even higher retirement age when the next generation of Singaporeans retires. -
Unfortunately CPF is a retirement fund and not a bank. Imagine how much profits a bank can make if they can force every Singaporean to "save" $20,000 at 3.5% and $40,000 at 4% on a long term basis with regular contribution.Originally posted by TheGoodEarth:I see there is no end to the debate on one's own money held by CPF. Trouble is when we put our savings in a bank that pays lousy interest rate, nobody complains, not even Low Thia Kang. But your CPF savings earn 2.5% and many forumers here are unhappy. Many also think they can manage their monies better, and feel CPF is not doing them any favour. CPF is a compulsory saving scheme in which employers are also required to contribute. Why don't you unhappy people go work in China, Indonesia, Australia, USA and see how much you can saved before you kick the bucket!
If a person earned 4% compounded interest over 30 years, his 1 dollar would have been 1.04^30 = $3.24 dollars.
If a bank can achieve 8 % returns over 30 years, the bank would have made 1.08^30 = $10.06 dollars for every dollar invested.
If such a bank exist, they can earn ($10.06 - $3.24) $6.82 per dollar saved by Singaporeans.Now thats profits! I am sure you agree the govt can keep them because its like a bank.
And if you think CPF is paying good guaranteed rates, you should look at AVIVA big E . They can pay 3.5% interest with guaranteed returns yet make a profit from it.
If there is a bank that can force people to save like the way CPF board does, let me know. I would be first to buy shares of such a bank.
You should search your conscience and think if its right making all these profits from the retirement savings of Singaporeans. The pioneer batch of Singaporeans in the CPF scheme were only allowed to invest in unit trusts in 1999 and were earning "risk free interest". Now many of them do not have enough to retire and have to postpone retirement despite Singapore having one of the highest savings rate of 40% in the world.
P.S. I am waiting for the CPF board to release the returns on the funds under the CPF investment scheme till 2007. They are using 2005 data and did not take account into the rise the market lately. -
Oh yeah a good point. For the central bank MAS, there is no chance of default because they can just print more money.This probably makes it one of the profitable "bank" as it can invest all the money and repay its obligation by printing paper. Other commercial banks would have to keep a portion uninvested to meet their potential liabilities.Originally posted by maurizio13:CPF can always guarantee to pay up whatever nominal money it owes to it's members, because MAS can always increase money supply if there is a need to. -
whats the diff?
they cant invest every single dollar of the reserves. a certain amount is needed to support the currency.
so cpf is probably left behind. -
I would think the regular budget surplus would have provided enough reserves to defend the currency. Not to mentioned all the possible hidden revenues such as land sales or gambling revenues.Originally posted by dragg:whats the diff?
they cant invest every single dollar of the reserves. a certain amount is needed to support the currency.
so cpf is probably left behind. -
its LPPL isnt it?Originally posted by kilua:I would think the regular budget surplus would have provided enough reserves to defend the currency. Not to mentioned all the possible hidden revenues such as land sales or gambling revenues. -
That's what I always say that they are ALWAYS good at ...Originally posted by dragg:its LPPL isnt it?
... being LPPL in everything.... -
If the GIC did not use CPF funds to invest, how does this Government take responsibility for allowing such a big pool of money sitting idle at the CPF ?
What has the CPF done to ensure that the huge accumulation of funds will earn a ''reasonable'' return for every Singaporean contributing into the CPF - especially when other private investments has done better with smaller amounts being managed ?
The amount accumulated is mind boggling even if one is to make a conservative estimate of an average Singaporean employee earning a fixed wage of $2000 per month for the next 35 years without pay increase; and pays 20% into his CPF while the Employer pays 16% - which will result in an assured monthly CPF contribution of $720; or $8,640 p.a.
If this amount earns 2% compound interest per year, by the time this Employee reaches his retirement on the 35th year of working life, he will have approximately $440,591.33.
If the retiring population is 100,000 workers, and each has $440,591.33 in his CPF, there would have been an accumulated sum of $44,059,133,000.
If the entire Singaporean work force of approximately 2,000,000 were to retire over the next 20 years - the Government will have to find $881,182,660,000.00 to pay everyone.
The combined reserves and annual profits made by the GLCs are included can hardly come to such a sum.
Does the CPF alone has this amount to pay out over the next 20 years ?
This question becomes even more pertinent considering that the Government is known to borrow from the CPF for the development of infrastructure.
Can infrastructure provide any return to the borrowings from the CPF ?
It is obvious that there is hardly any such amount to payout to Singaporeans any lump sum based on the original CPF scheme of retirement at 55 years of age.
The Government changing of the CPF scheme by further delays to the CPF draw out age is a clear indication of dishonesty in breaking a social contract of trust with Singaporeans. -
Originally posted by Atobe:
But I believe the MAJORITY still trust them. Like they did about 50 years ago.
If the GIC did not use CPF funds to invest, how does this Government take responsibility for allowing such a big pool of money sitting idle at the CPF ?
What has the CPF done to ensure that the huge accumulation of funds will earn a ''reasonable'' return for every Singaporean contributing into the CPF - especially when other private investments has done better with smaller amounts being managed ?
The amount accumulated is mind boggling even if one is to make a conservative estimate of an average Singaporean employee earning a fixed wage of $2000 per month for the next 35 years without pay increase; and pays 20% into his CPF while the Employer pays 16% - which will result in an assured monthly CPF contribution of $720; or $8,640 p.a.
If this amount earns 2% compound interest per year, by the time this Employee reaches his retirement on the 35th year of working life, he will have approximately $440,591.33.
If the retiring population is 100,000 workers, and each has $440,591.33 in his CPF, there would have been an accumulated sum of [b]$44,059,133,000.
If the entire Singaporean work force of approximately 2,000,000 were to retire over the next 20 years - the Government will have to find $881,182,660,000.00 to pay everyone.
The combined reserves and annual profits made by the GLCs are included can hardly come to such a sum.
Does the CPF alone has this amount to pay out over the next 20 years ?
This question becomes even more pertinent considering that the Government is known to borrow from the CPF for the development of infrastructure.
Can infrastructure provide any return to the borrowings from the CPF ?
It is obvious that there is hardly any such amount to payout to Singaporeans any lump sum based on the original CPF scheme of retirement at 55 years of age.
The Government changing of the CPF scheme by further delays to the CPF draw out age is a clear indication of dishonesty in breaking a social contract of trust with Singaporeans.
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Originally posted by reddressman:
The CPF is a Social Contract that the Government had convinced Singaporeans since it was adopted in 1957 - when this Political Party came into political office.
But I believe the MAJORITY still trust them. Like they did about 50 years ago.
If they continue to change this Social Contract into an unrecognised form - from a Provident Fund that one pays for one retirement, into a Pension Scheme that should have been paid by one's employers but now expected to be paid by ourselves - this TRUST and CONFIDENCE will soon be questioned.
An Annuity Scheme is no different from a Pension Scheme.
Is the Government Ministers' pensions paid by themselves or from the State - whose funds come from the citizens' taxes ? -
Anyone can tell me which talent created the annuity scheme?
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actually the annuity scheme doesn't sound that replusive.....what made it replusive is the idea of if you die, the money goes to the pool making the gahmen responsibilities free and that more talent can be injected to suck the moneyOriginally posted by reddressman:Anyone can tell me which talent created the annuity scheme?
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is that so?Originally posted by Lin Yu:actually the annuity scheme doesn't sound that replusive.....what made it replusive is the idea of if you die, the money goes to the pool making the gahmen responsibilities free and that more talent can be injected to suck the money
when a person dies, his cpf money goes into the 'pool'? You mean if he dies before 85? but isn't his cpf money his money? who owns the cpf money? -
Who really owns the flat if one is leasing ?
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a sum of $4000 or above will be pool into the annuity scheme but the rest of the money will be return to the owner (in installment of $X for 20 years). only when owner reach 85 will he start to draw $300pm from the annuity scheme. upon death, the reminder will go to the pool for those who last longer. this is my understanding of the anal scheme.Originally posted by reddressman:is that so?
when a person dies, his cpf money goes into the 'pool'? You mean if he dies before 85? but isn't his cpf money his money? who owns the cpf money?
correct?