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CPF – F1 or F9 : Credit extension, mortgages and ordinary/special accounts

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This is the last in the series of articles on the CPF by Leong Sze Hian.

Owe money – no need to pay?

Singaporeans may like to know that in a media statement on Dec 3, 2006, the CPF Board said that ‘under the CPF Act, all CPF monies withdrawn by a member are protected from any debt or claim.

‘Thus, the monies withdrawn are protected from creditors even if the debts are incurred after the CPF withdrawal date.’

What this may mean is that retirees – after withdrawing their CPF at age 55 – may buy whatever they want on credit, borrow any amount of money and become entrepreneurs to do business, because CPF monies withdrawn are ‘protected from creditors even if the debts are incurred after the CPF withdrawal date’.

Will financial institutions, retailers, suppliers, etc, become more wary in extending credit, and maybe start to discriminate against people who have withdrawn their CPF?

When someone wants to borrow money from you, you may like to check his or her IC to see if the borrower is over 55 years old, because as a creditor, you will not be able to seek any legal recourse in respect of CPF monies withdrawn years ago.

Singaporeans are now assured of the absolute safety of their CPF.

By the way, will a deceased’s estate containing CPF monies withdrawn be protected from creditors of debts incurred after withdrawal, when he dies too?

Lose HDB flat, lose CPF?

Bank loans to HDB buyers has hit $11.5b. As of October 31, 2005, some 65,000 occupants of HDB flats have taken bank loans. The figure represents 12 per cent of people with mortgages on HDB property.

Those with HDB concessionary loans also risk losing their flats if they are unable to service the mortgage, because the outstanding HDB loan has to be paid first, before any balance sale proceeds can be returned to the flat owners’ CPF accounts.

This means that there are about 542,000 (88 per cent of HDB flats) HDB borrowers with HDB loans. Against such a backdrop, the number of people who risk losing their CPF if they are unable to service their HDB loans is large, and this may affect almost one in two homes in Singapore.

Why do Ordinary and Special accounts pay different rates?

The transfer of one’s CPF from OA to SA is irrevocable. The OA can be used to pay for housing and children’s tertiary-education tuition fees, whereas the SA cannot be used.

It is therefore not an easy decision for CPF members to make, because in trying to have more money for retirement by transferring from OA to SA, one will be taking a risk because there may be a need in the future for such funds to pay for housing or education.

Which is the bigger problem? Having less money when one retires or not being able to use it when you need it most? How does one decide when and how much of one’s OA to transfer?

Why not allow a case-by-case waiver of the irrevocability of transfers based on financial hardship in the future?

As the HDB concessionary loan rate is only 2.6 per cent, does it mean that we should try to transfer as much of our OA as possible to SA to earn 4 per cent, as long as we think that we can continue to service our housing loan from CPF contributions or with cash?

Does this also mean that we should transfer as much of our OA as possible, before we purchase an HDB flat, so that we can borrow as much as possible at 2.6 per cent and earn the differential?

What is the average rate of return that the CPF Board has been getting on all the CPF funds over the years?

Why does the OA pay 2.5 per cent and the SA, 4 per cent?

If the board’s average rate of return is, say, 3.6 per cent, why not pay 3.5 per cent on both the OA and SA?

This would eliminate the dilemma of many members as to whether to transfer their OA. Would the total payout to Singaporeans be more or less if the same rate is applied to both accounts?
It may be of interest to members to know what is the percentage of members who have ever transferred part of their OA to SA, and the percentage of total OA funds that have been transferred.

This will indicate how receptive Singaporeans have been to this transfer policy to ‘speed up the accumulation of retirement savings’.

For more of Sze Hian’s writings, please visit his website here.


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Indonesia

Miss Universe cuts ties with Indonesia chapter after harassment allegations

The Miss Universe Organization severs ties with Indonesia franchise due to harassment claims. Malaysia edition canceled.

Women allege body checks before pageant. Investigation launched. Safety prioritized.

Indonesia winner to compete in November finale. Height requirement controversy.

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WASHINGTON, UNITED STATES — The Miss Universe Organization has cut ties with its Indonesia franchise, it announced days after allegations of sexual harassment, and will cancel an upcoming Malaysia edition.

In the complaint, more than a half dozen women said all 30 finalists for Miss Universe Indonesia were unexpectedly asked to strip for a supposed body check for scars and cellulite two days before the pageant’s crowning ceremony in Jakarta.

Their lawyer said Tuesday that five of the women had their pictures taken.

“In light of what we have learned took place at Miss Universe Indonesia, it has become clear that this franchise has not lived up to our brand standards, ethics, or expectations,” the US-based Miss Universe Organization posted Saturday night on social media site X, formerly known as Twitter.

It said that it had “decided to terminate the relationship with its current franchise in Indonesia, PT Capella Swastika Karya, and its National Director, Poppy Capella.”

It thanked the contestants for their bravery in coming forward and added that “providing a safe place for women” was the organization’s priority.

Jakarta police spokesman Trunoyudo Wisnu Andiko said Tuesday that an investigation into the women’s complaint has been launched.

The Indonesia franchise also holds the license for Miss Universe Malaysia, where there will no longer be a competition this year, according to the New York-based parent organizer.

In a lengthy statement posted to Instagram, Indonesia franchise director Capella denied involvement in any body checks.

“I, as the National Director and as the owner of the Miss Universe Indonesia license, was not involved at all and have never known, ordered, requested or allowed anyone who played a role and participated in the process of organizing Miss Universe Indonesia 2023 to commit violence or sexual harassment through body checking,” she wrote.

She added that she is against “any form of violence or sexual harassment.”

The Jakarta competition was held from 29 July to 3 August to choose Indonesia’s representative to the 2023 Miss Universe contest, and was won by Fabienne Nicole Groeneveld.

Miss Universe said it would make arrangements for her to compete in the finale, scheduled for November in El Salvador.

This year’s Indonesia pageant also came under fire for announcing a “significant change in this (year’s) competition guidelines” with the elimination of its minimum height requirement after it had crowned a winner.

In its statement, the Miss Universe Organization said it wanted to “make it extremely clear that there are no measurements such as height, weight, or body dimensions required to join a Miss Universe pageant worldwide.”

— AFP

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Malaysia

A Perodua service centre in Kuantan, Malaysia went viral for its strict dress code, Perodua responds

A dress code for vehicle servicing? A Malaysian car brand’s service centre dress code signage has puzzled netizens, raising queries about the need for attire rules during a routine service.

The manufacturer responded with an official statement after a flurry of comments, seeking to clarify and apologize.

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MALAYSIA: A dress code signage positioned at a service centre belonging to a prominent Malaysian car brand has sparked bewilderment among Malaysian netizens, who question the necessity of adhering to attire guidelines for a simple vehicle servicing.

The signage explicitly delineates clothing items that are deemed unsuitable, including sleeveless tops, short skirts, abbreviated pants, and distressed jeans.

The car manufacturer swiftly found itself flooded with comments from both inquisitive and irked Malaysian netizens. This surge in online activity prompted the company to issue an official statement aimed at clarifying the situation and extending an apology.

In a post that gained significant traction on the social media platform, politician Quek Tai Seong of Pahang State, Malaysia, shared an image to Facebook on Monday (7 Aug).

The image showcased a dress code sign prominently displayed at a Perodua Service Centre in Kuantan. Within the post, Quek posed the question: “Is this dress code applicable nationwide, or is it specific to this branch?”

The signage reads, “All customers dealing with Perodua Service Kuantan 1, Semambu, are requested to dress modestly and appropriately.”

Adding visual clarity to these guidelines, the sign features illustrative graphics that explicitly outline clothing items deemed unacceptable, including sleeveless tops, short skirts, short pants, and ripped jeans.

Delineating the specifics of the dress code, the signage stipulates that male visitors are expected to don shirts accompanied by neckties, opt for long pants, and wear closed shoes.

Conversely, female visitors are advised to don long-sleeved shirts, full-length skirts, and closed-toe footwear.

Perodua’s dress code sparks online uproar

Following the rapid spread of the post, Perodua’s official Facebook page found itself inundated with comments from both intrigued and frustrated Malaysian netizens, all seeking clarifications about the newly surfaced dress code policy.

Amidst the flurry of comments, numerous incensed netizens posed pointed questions such as, “What is the rationale behind the introduction of such regulations by the management? We demand an explanation.”

Another netizen expressed their dissatisfaction, arguing against the necessity of the rule and urging Perodua to take inspiration from the practices of other 4S (Sales, Service, Spare Parts, and Survey) automotive dealerships.

A concerned Facebook user chimed in, advocating for a more lenient stance, asserting that attempting to dictate customers’ clothing choices might not be in the company’s best interest.

Someone also commented in an angry tone, “Oi what is this? Going there for car service, not interview or working, right.”

As the discourse unfolded, it became evident that while some inquiries carried genuine weight, others chose to inject humor into the situation, playfully remarking, “If I wanted to buy a Myvi, I should buy or rent a formal attire first.”

“I sell economy rice at a hawker centre, I have never worn a long sleeve shirt and a tie… I guess I will not buy a Perodua car then.”

“I guess they will not serve those who wear short pants.”

Perodua addresses dress code controversy

As reported by Chinese media outlet Sin Chew Daily News, the manager of Kuantan’s Perodua Service Centre had acknowledged that the images on the dress code signage were misleading.

In response, the manager divulged that discussions had transpired with the head office, leading to the prompt removal of the signage to prevent any further misconceptions.

The manager clarifies, “We do encourage visitors to adhere to the dress etiquette, but we won’t go to the extent of restricting their choice of attire.”

He also revealed that currently, no complaints have been directly received from the public.

However, feedback from certain customers was relayed through Perodua’s agents.

Perodua also released an official statement by chief operating officer JK Rozman Jaffar on Wednesday (9 Aug) regarding the dress code on their official Facebook page.

The statement stated the dress code etiquette is not aligned with their official guidelines and they are currently conducting an official investigation on the matter followed by corrective measures to avoid the same incident from happening.

Perodua also extends its apologies for any inconvenience caused.

 

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