NTUC to Force 100,000 Low-wage Workers into CPF Scam
-
Originally posted by EarlNeo:
1st of all, the cpf was voluntary to those of very low income. That is why they are forcing them now. FT aside.
Try tracing where GIC and Temasek got their loan to finances their investment. That will lead to our CPF. Try imagining what if both those company gone bankrupt? What happen to ur CPF? Then u might say that it wont happen. So are u saying that our cpf that our gov invested on is after all not risk free? if so, why dun we get a decent amount of return rather then the mini? I am not talking about high rish or low rish investment, for every investment, there is a risk. If the CPF investment by our gov is risk free, why wasn't any infor about what is being done to our CPF ever release? Just what was know or release as to where the CPF gone to? 2% return is way too low my friend. U get 4% to 5% for fixed deposit in bank FOR 40yrs? Unless u turn around and tell me bank FD is deem risky compare to the unknow acc of our so call CPF.
Now u are telling me that I cant take care of my money, so i need to have my money taken away from me to save guard it. What is next? I cant take care of children and u take it away?
Locking it away and only letting u use it after retirement age of 55yrs was the original plan. Now 72yrs? what is next? If CPF does work and is the right way to go, do u think it need to be make compulsory?
Convincing and forcing are very different. What i read was convincing and somehow what you read was forcing. Go back to my posts and find that I'm suggesting that upon signing up, the employers should make mandatory contributions and employees should be given a choice. This will lead to more of such people signing up. It is better than them not being in the scheme at all. Get it ? I repeat, employers mandatory whilst employees voluntary as a package. Upon reaching a target income limit, both mandatory.
GIC money is the country's reserves. Temasek's money came from part of the reserves. I suppose the CPF board invested our money in Government securities at the risk-free rate of 2.5-3.5%. Ok lets take the argument that the money is indeed in GIC but so what ? I cannot guarantee that both Temasek and GIC will never go bankrupt but in the event it does, nothing can save you and your investments unless of course it is denominated entirely foreign currency/assets. Money kept in your bank, invested in assets denominated by SGD, hidden under your pillow will go up in smoke. If that is your choice and belief then you are definitely better off in a country whose government you trust. To drive home the point again, the risk-free rate (as determined by Government securities: Treasury bills 2.5%) is your safest investment. Yes, it is safer than your fixed deposit in the bank.Country fails, everything fails. Once again, you are free to invest a portion your CPF funds in riskier assets which may bring higher returns, depending on your risk appetite.
On your last point. I can't say for certain that CPF will suffice for everybody's retirement but without CPF, I'm positive that many will be without any money during retirement age.
-
Dear kramnave,
Treasury bills are basically loans taken out by the government. It makes no sense for the government to put CPF reserves (which effectively is the government's money) in companies that turns around and buys bills, effectively putting the money back in the government and that the government again puts that money back in those companies and on and on to infinity.
Because of that, using the interest rate of bills as a guide to setting CPF interest rate makes no sense.
-
Originally posted by phil30k:
Dear kramnave,
Treasury bills are basically loans taken out by the government. It makes no sense for the government to put CPF reserves (which effectively is the government's money) in companies that turns around and buys bills, effectively putting the money back in the government and that the government again puts that money back in those companies and on and on to infinity.
Because of that, using the interest rate of bills as a guide to setting CPF interest rate makes no sense.
Yah but the thing is CPF funds are invested in government securities. What government is doing with the money, i can't say for sure
. -
If CPF is used to purchase goverment securities then government would call that money their reserves.
If the government invests that money and gets a return higher then the CPF interest rate then that money goes into the reserves.
So if CPF is insufficient due to the low rates the government has been paying us, it is not sufficient to explain it as being due to the low interest rate of goverment securities because there may be a surplus in the reserves.
That is why people are calling for more transparency.
-
They just formed a bank... where people are forced to deposit and unable to withdraw...
-
Originally posted by phil30k:
If CPF is used to purchase goverment securities then government would call that money their reserves.
If the government invests that money and gets a return higher then the CPF interest rate then that money goes into the reserves.
So if CPF is insufficient due to the low rates the government has been paying us, it is not sufficient to explain it as being due to the low interest rate of goverment securities because there may be a surplus in the reserves.
That is why people are calling for more transparency.
Yup, I agree more transparency is better than less.
However, we (me and you at least) do not know what the government is doing with money generated from debt issue. Suppose the bulk of the money is (I hope not) invested in risky assets(which they claim are not) then there will be many problems. Suppose times are good and we get 10% in return for a period then followed by negative rates but govt guarantees 0% at least. Now what happens to the worker who comes in when returns are 0% ? By setting a reasonable rate (risk-free rate of 2.5 - 3.5%), Govt can offset bad years with good years, supposing our money is on relatively riskier assets.
I never seriously thought the CPF would suffice for retirement and I would strive for more. More from personal savings/investments. In my view the 3.5% CPF is not there to fund my retirement but only as a minimum if you get what I mean.
Edit: Just want to add that if anybody feels that an investment in FD, Unit trust, insurance etc is more worth it then why not invest your CPF in it ?
-
Originally posted by kramnave:
Convincing and forcing are very different. What i read was convincing and somehow what you read was forcing. Go back to my posts and find that I'm suggesting that upon signing up, the employers should make mandatory contributions and employees should be given a choice. This will lead to more of such people signing up. It is better than them not being in the scheme at all. Get it ? I repeat, employers mandatory whilst employees voluntary as a package. Upon reaching a target income limit, both mandatory.
GIC money is the country's reserves. Temasek's money came from part of the reserves. I suppose the CPF board invested our money in Government securities at the risk-free rate of 2.5-3.5%. Ok lets take the argument that the money is indeed in GIC but so what ? I cannot guarantee that both Temasek and GIC will never go bankrupt but in the event it does, nothing can save you and your investments unless of course it is denominated entirely foreign currency/assets. Money kept in your bank, invested in assets denominated by SGD, hidden under your pillow will go up in smoke. If that is your choice and belief then you are definitely better off in a country whose government you trust. To drive home the point again, the risk-free rate (as determined by Government securities: Treasury bills 2.5%) is your safest investment. Yes, it is safer than your fixed deposit in the bank.Country fails, everything fails. Once again, you are free to invest a portion your CPF funds in riskier assets which may bring higher returns, depending on your risk appetite.
On your last point. I can't say for certain that CPF will suffice for everybody's retirement but without CPF, I'm positive that many will be without any money during retirement age.
Hey, sorry for misreading ur post. So u propose to have the employer pay the CPF contribution and not the low income employee, hence not affecting their take home amount? Meaning a pay rise of 13% in term of CPF, which is the same as raising the lower income? If u are going to ask for a raise, why dun u ask for more and get a 33% raise? The take back income isnt affected and at the same time, CPF is assured? If pay raise is the actual solution, does it also mean bottom line, the low income earner are paid too little, till the extend that they couldn’t afford CPF contribution?
Are widening of income gap to blame for lower income inability to benefic from CPF? I was paid $5/hr working as a waiter 15yrs back. Guess how much they are paying today? The same $5/hr. Shouldn’t gov be looking after those lower earners to ensure they get a mini wages to stay ahead of inflation?
CPF started with 25% contribution on both the employee and employer. Due to some hard time, it was cut down to 13% for the employer, effectively giving the working class of the whole of sg a 12% pay cut.. We might not feel the pinch since the take home amount wasn’t affected, but because gov reluctant to revert to the original % coupling that with increasing HDB price, most ppl dun have enough CPF for retirement. Instead of increasing employer %, the gov make the retirement age older and CPF withdrawal later.
To topper that already diminishing CPF, the gov set the CPF return at 2% which are barely enough to meet inflation.
I dun mind having my money lock up either. But the intention must be for the benefic of me and not me been exploited.
-
Thing is, whatever happens, Government tries to reduce the impact on business costs, thus workfare. Asking the employer for 13% (Actually 14.5%) is within reasonable grounds as that is the employer contribution rate in Singapore. Asking for 33% (or 34.5%) is pretty unrealistic and might price the employer out of business. Ultimately the money has to come from somewhere. A waiter 10 years ago may earn $5 and today maybe the same. The price of the alcohol that you drink and the food that you eat, if you factor out GST and increase in cost, has not increased much as well, if any. Rental rates I suspect would have gone up as well. I don't think the profit margin of the establishment would have gone up much, all things else being equal. Where is the waiter's pay rise going to come from ? Today if the government increase employer contribution rate to 20% who is going to bear the sudden increase in labour cost, what is this sudden decision going to tell business owners and potential investors?
On the subject of CPF return, seriously 2.5-3.5% may not cover inflation and I don't think they will increase their burden and pay more than what they pay out on bonds/notes. If you feel that you can get a better return elsewhere, why not do it then ? You can invest your CPF in Unit trusts, Insurance, Shares, Fixed Deposits, Property, Gold traded funds, Government securities etc etc. They are placing the burden/liberty of getting better returns on your shoulders so you have a choice about it, whether or not you want to get a potentially better return by taking greater risks.
Come to think about it, if CPF pays better or are on par with some of these instruments and at the same time, is risk-free because it is backed by government, who would want to invest their CPF funds ? It would be unrealistic and at the same time it would be denying many mass market financial consultants and banks a living.
-
Originally posted by kramnave: Thing is, whatever happens, Government tries to reduce the impact on business costs, thus workfare. Asking the employer for 13% (Actually 14.5%) is within reasonable grounds as that is the employer contribution rate in Singapore. Asking for 33% (or 34.5%) is pretty unrealistic and might price the employer out of business. Ultimately the money has to come from somewhere. A waiter 10 years ago may earn $5 and today maybe the same. The price of the alcohol that you drink and the food that you eat, if you factor out GST and increase in cost, has not increased much as well, if any. Rental rates I suspect would have gone up as well. I don't think the profit margin of the establishment would have gone up much, all things else being equal. Where is the waiter's pay rise going to come from ? Today if the government increase employer contribution rate to 20% who is going to bear the sudden increase in labour cost, what is this sudden decision going to tell business owners and potential investors?
On the subject of CPF return, seriously 2.5-3.5% may not cover inflation and I don't think they will increase their burden and pay more than what they pay out on bonds/notes. If you feel that you can get a better return elsewhere, why not do it then ? You can invest your CPF in Unit trusts, Insurance, Shares, Fixed Deposits, Property, Gold traded funds, Government securities etc etc. They are placing the burden/liberty of getting better returns on your shoulders so you have a choice about it, whether or not you want to get a potentially better return by taking greater risks.
Come to think about it, if CPF pays better or are on par with some of these instruments and at the same time, is risk-free because it is backed by government, who would want to invest their CPF funds ? It would be unrealistic and at the same time it would be denying many mass market financial consultants and banks a living.
As u mention, "Government tries to reduce the impact on business costs, thus workfare" And that is why sg is run like a business that cater to the need of the rich at the expense of the poor whom are being left out! It is ok that the poor earn $5 10 yrs back and now so long as it doesnt affect we the consumer or the rich? That is why the poor are always left behind and condem to provety till they cant make end needs. Which bring us back to why NTUC need to force 100k low wage worker to take up CPF regradless if they can or not.
"On the subject of CPF return, seriously 2.5-3.5% may not cover inflation" - so does that mean it is ok to park away ur money and only get it back after 40yrs for less than what is was worth?
"Come to think about it, if CPF pays better or are on par with some of these instruments and at the same time, is risk-free because it is backed by government, who would want to invest their CPF funds ?"
- i assume there is a error, u mean "who wouldn't want to invest their CPF funds?" rite?. anyway, to asnwer that, why dun u ask this instead? Why should we invest in CPF when ww can invest in something else that give better return and yet back by gov? It dun have to be local gov, can be any other gov. Say buying other sercurites with better return or bonds or asset back insurrance, etc. Why arent we doing that? Coz we arent given the choice, period. U can invest in ur cpf but the choice is limited and u cant withdraw it till at certain age. If CPF is a golden horse, does the gov need to force anyone onto it?
-
Originally posted by EarlNeo:
As u mention, "Government tries to reduce the impact on business costs, thus workfare" And that is why sg is run like a business that cater to the need of the rich at the expense of the poor whom are being left out! It is ok that the poor earn $5 10 yrs back and now so long as it doesnt affect we the consumer or the rich? That is why the poor are always left behind and condem to provety till they cant make end needs. Which bring us back to why NTUC need to force 100k low wage worker to take up CPF regradless if they can or not.
"On the subject of CPF return, seriously 2.5-3.5% may not cover inflation" - so does that mean it is ok to park away ur money and only get it back after 40yrs for less than what is was worth?
"Come to think about it, if CPF pays better or are on par with some of these instruments and at the same time, is risk-free because it is backed by government, who would want to invest their CPF funds ?"
- i assume there is a error, u mean "who wouldn't want to invest their CPF funds?" rite?. anyway, to asnwer that, why dun u ask this instead? Why should we invest in CPF when ww can invest in something else that give better return and yet back by gov? It dun have to be local gov, can be any other gov. Say buying other sercurites with better return or bonds or asset back insurrance, etc. Why arent we doing that? Coz we arent given the choice, period. U can invest in ur cpf but the choice is limited and u cant withdraw it till at certain age. If CPF is a golden horse, does the gov need to force anyone onto it?
"As u mention, "Government tries to reduce the impact on business costs, thus workfare" And that is why sg is run like a business that cater to the need of the rich at the expense of the poor whom are being left out!"
Earl, it is a two-way relationship rather than "cater to the needs of the rich at the expense of the poor". If a business finds it viable to exist here, it will give you a job. Else, it wouldn't exist and you wouldn't have a job.
"It is ok that the poor earn $5 10 yrs back and now so long as it doesnt affect we the consumer or the rich? That is why the poor are always left behind and condem to provety till they cant make end needs."
As a student, I worked as a waiter as well and after a year my remuneration went up to $6.50 from $5.50 not taking tips into consideration. I think I was a good worker myself and would be promoted along the years with pay increment to boot. However my ambitions lay elsewhere and I didnt stick to that line. If someone tells me that he earn $5.00 then and after 10 years that same person is earning the same amount then something is terribly wrong with him. Then again perhaps that person is unlucky or born with a deficiency and we cannot leave these people too far behind. Thus I think Workfare is a positive step. Else comcare or various charitable organisations.
"Which bring us back to why NTUC need to force 100k low wage worker to take up CPF regradless if they can or not."
Why do you keep insisting that NTUC is forcing people when it is clearly stated that they are trying to convince ?
"so does that mean it is ok to park away ur money and only get it back after 40yrs for less than what is was worth?"
You are free to invest it, buy property with it. 100% on unit trusts, government securities, Insurance products and 35% on shares. 10% on gold traded funds.
"- i assume there is a error, u mean "who wouldn't want to invest their CPF funds?" rite?"
No error. If CPF gives returns that are comparable to riskier alternatives in the market, I would choose to keep my money in CPF and not invest it anywhere else.
"why dun u ask this instead? Why should we invest in CPF when ww can invest in something else that give better return and yet back by gov? It dun have to be local gov, can be any other gov."
That would be foreign govt securities ? The more the interest the higher the risk. Just check the ratings and history of Sovereign debt securities. Indonesia, Russia, Argentina, Brazil etc. Anyway I don't think the government is pretty much interested in the flight of capital from Singapore, especially when the amount is so huge.
"U can invest in ur cpf but the choice is limited and u cant withdraw it till at certain age. If CPF is a golden horse, does the gov need to force anyone onto it?"
Because people don't like saving at all. Ultimately if one keeps thinking about CPF money and would wish to get it out then one has a use for it. Alright perhaps we can think that we will save it and keep it somewhere with better returns for equal risk (if that exists) but what about those that can't ? What if people spend the money before they retire ? Lose their money to conmen out of greed or finance their credit card debt ? What happens then ?