“One cannot be certain what will happen years down the road if we have a different government in power and how they will treat their obligations to Singaporeans,” she said.

Source: Today

Stop threatening us, PAP. Do your job instead and take care of Singaporeans’ CPF security in the long run.

The present government will continue to delay the CPF problem, unless voters force them to undertake fundamental changes.

Written by Arthur

The Straits Times forum published David Cheong’s letter about CPF. Someone posted it on Sam’s AlfrescoHeaven. Here is the full article (bold and emphasis is from me).

Read more

http://www.sgpolitics.net/?p=2237

Excerpts:

In my view, the CPF Life scheme is highly deficient in that:

-the payouts are not indexed to inflation,
-the Government has not expressed any desire to co-fund the scheme, and
-the payout amount is subject to drastic change in the event that interest rates fall or life expectancies improve significantly.

The compulsory nature of the CPF Life scheme, or more generally, the compulsory nature of the Minimum Sum scheme itself transfers both control and responsibility of a person for his assets to the Government. This places a great moral responsibility on the Government to manage those assets in a transparent and accountable manner, and deliver returns that are on par with or even better than the best that the private sector can provide.

In particular, if both the Minimum Sum and CPF Life schemes are to be compulsory, the onus must be on the Government to play its part in ensuring that payouts remain relatively stable no matter how interest rates or mortality rates may change. This has not been done, and this deficiency form the crux of my critique of the scheme as it is currently presented.

http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_323961.html

Extracted from article:

SINGAPOREANS are at the bottom of a ranking of retirement income from pensions in the Asia-Pacific region, says the Organisation for Economic Cooperation and Development (OECD).

Singapore’s pension is provided by the Central Provident Fund (CPF).

‘The relatively low replacement rate for Singapore is because the calculations only consider the earmarked retirement account,’ says the study. ‘If an individual were to put the general account towards retirement-income provision as well, then the replacement rate would be 82 per cent.’

It points out that it would be foolish to say that one Singaporean who withdrew from the CPF to buy a house is worse off than another who built up a retirement income and then had to use some of it to pay for housing.

‘Nonetheless, there is a risk that older people find themselves asset-rich and income-poor in retirement and facing difficulty in unlocking the value of their housing assets to pay for essentials,’ the study says.

http://theonlinecitizen.com/2008/12/helping-singaporeans-cope-with-inflation/

Helping Singaporeans cope with recession

http://theonlinecitizen.com/2008/12/recession-but-mra-and-food-inflation-up/

Tuesday, 23 December 2008, 11:34 am | 149 views
Leong Sze Hian / Columnist
Sudden jump in Medisave Required Amount (MRA)
I refer to the article, “$18,000 required in Medisave from Jan 1” (TODAY, Dec 10).
CPF members who turn 55 and are able to meet the Minimum Sum (MS) requirement – which is $106,000 currently – will still need to set aside a sum in their Medisave Accounts when making a withdrawal. From Jan 1, the sum to be set aside will be raised from the current $14,000 to $18,000.

Introduced in 2004, the Medisave Required Amount (MRA) was scheduled to increase by $2,500 each year until it reaches $25,000 on Jan 1, 2013.

The increase of $4,000 is 60 per cent higher than the original scheduled increase of $2,500.

Why the sudden huge jump in the MRA? What criteria was used to determine the MRA?

As such quantum changes affect the amount of CPF that we can withdraw at age 55, I would like to suggest that it be subject to parliamentary debate and approval.

At its current rate of increase at $4,000 a year, does it mean that the MRA will be $34,000 by 2013, instead of the originally announced $25,000?

Since from Jan 1, 2013, the MS of $134,000 (after inflation adjustment as projected by the Longevity Insurance Committee’s Report) and the MRA must be retained at age 55, does it mean that those with less than $168,000 ($134,000 MS + $34,000 MRA) will only be able to withdraw $5,000 at 55?

With the recession, retrenchments, wage cuts, and high inflation, this unexpected huge increase in the MRA may affect those who turn 55 next year and in the future, as they may have less to withdraw from their CPF to help them tide over these difficult times.

According to the Longevity Insurance Committee’s report, 60 per cent are projected to have at least $67,000 in their CPF at age 55 in 2013.

So how many Singaporeans have less than the total required sum of $168,000 at age 55 in 2013?

Food inflation despite the recession
I refer to media reports that food prices are still continuing to rise despite the recession, and media reports about Malaysia’s Domestic Trade and Consumer Affairs Minister’s success in visiting and getting hawker stalls and hypermarkets to reduce prices to help Malaysians with high inflation and the current recession. For example, about 4,500 Indian and Indian Muslim restaurants in Malaysia this week dropped their prices, as well as several hypermarket chains.

I also refer to media reports that HDB will not be deferring any of its upgrading projects. However, may not one of the causes of inflation be the upgrading of hawker centres?

After upgrading, the total rental, service and conservancy fees (S & CC), refuse fees, etc. typically increase by more than double for the existing stallholders. For those new stalls that are put up for tender, the rental can be 10 or 20 times more.

Is it any wonder, then, why food prices have gone up so much?

I think we may need to weigh the benefits of the policy of upgrading all hawker centres by 2010, in light of high inflation, recession and retrenchment, against affordability, given that the annualised median wage change was only about 3.2 per cent per annum from 1999 to 2008.

In this connection, food inflation and the overall Consumer Price Index (CPI) was 11.5 and 8.9 per cent respectively, over the last 17 months till October.

We may need to balance much higher rentals and prices against the need for “re-painting, [re-designing] for better ventilation, improved seating capacity and toilets”.

Since $4.7 billion of public construction projects have been deferred to ease inflationary pressures, why not defer the hawker centre upgrading too?

After all, isn’t rapidly-rising food inflation something which affects almost everyone, and thus, is more important and urgent to deal with?

For example, in the Bugis Albert Centre market upgrading, as less than half the original 380 stalls – 170 of them – have moved into the temporary centre, how many of the other 210 stalls have given up their livelihood, because the increased rental and other costs that may have made their businesses no longer viable?

How many would give up because they would not be able to afford the $5,000 to $9,800 (monthly $312.50 to $612.50 over 16 months) for the temporary centre?

Some of the hawkers who moved to the temporary centre have reported a drop in daily takings by more than 40 per cent.

Some hawkers in upgraded hawker centres have also reported a drop in business relative to higher costs.

There is the argument that the hawkers would be better off after upgrading, for if the hawker centres are not upgraded, they would become more run-down and customers would patronise other food places. This may be true, but on the other hand, people may avoid them because of the higher prices or cook at home instead.

Will there still be affordable food (relative to the recent past), when all the remaining 54 food centres are upgraded by 2010?

We help ourselves. Don’t expect others to help

Tom Wright painted a bleak picture of Singapore’s property sector going forward at The Wall Street Journal. His article ended with the following:
“I’m yet to see the light at the end of the tunnel [for Singapore],” says Mr. Tan, the high-end broker.
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The Institute of Policy Studies (IPS) organised a seminar on March 4 to discuss Singapore’s political blogosphere.  Tan Tarn How, Senior Research Fellow and Research Assistant Tan Simin presented their paper on trends observed in the blogosphere.  As reported in the TOC, the researchers identified the following limitations:

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Recently, I followed a thread “Democracy and Economic Growth” which started in PoliticsForum.org.   Apparently, members there often question the role of democracy in a developing nation. “During the wave of democratization in Africa during the 90s, many people had renewed hope for the continent, immediately equating newly established democracies to economic growth. Are these democracies [...]



Tell Singapore government: Ask them a question or give a suggestion

We informed people about the “Tell Singapore Government” subsite and have received some interesting reaction at some forums.
See: 3in1 Kopitiam, Sam’s Alfresco Coffee, Singapore Kopitiam, SgForums
Our responses to some of the comments are listed below. If we are not answering some other specific questions, that is because we do not know how.
 

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