By Andrew Loh
In a letter to the Straits Times Forum Page on September 25, MP for Bishan-Toa Payoh, Mrs Josephine Teo (right) said:
“I REFER to the Insight special on CPF reforms (ST, Sept 22). Journalist Li Xueying had raised a number of issues for discussion, one of which referred to an NMP's comment that making annuities compulsory is the start of a slippery slope where the Government 'interferes' in what is essentially CPF members' own money. She asked if I agree.
I replied that Government's job is to intervene where necessary. That is what we are elected to do. Singaporeans will have to judge whether the intervention has helped to create better results”
If what Mrs Teo says is representative of the government’s views, then perhaps we should all be quite concerned. For it means that Singaporeans’ CPF money do not belong to Singaporeans anymore – that it is the government which has the final say on how and what Singaporeans do with it.
It would mean that Singaporeans have, somehow, surrendered their ownership and rights to their CPF funds.
Contrary to what Mrs Teo said, that “that is what we are elected to do”, I beg to differ totally.
Singaporeans elected the People’s Action Party (PAP) into government in the belief that the PAP would be a consultative government and one which respects the rights - and property - of Singaporeans.
Certainly, Singaporeans did not elect the PAP so that as the Government it can usurp Singaporeans’ rights and ownership.
Electing the PAP into Government does not, in any way, shape or form, give the PAP blanket approval to “intervene where necessary” into the personal lives and personal belongings of Singaporeans – no matter how well-intentioned such “intervention” may be.
It is the government which should be asking Singaporeans if they (the Singaporeans) approve of what the government intend to do with their CPF money – and not be presumptuous that being elected into Government means Singaporeans have given the PAP blanket approval to do as it pleases.
Mrs Teo seems to have put the cart before the horse and have lost sight of what it means to be a “consultative government”.
*Bishan-Toa Payoh was uncontested in the last General Elections. (link)
Mrs Teo’s full letter is reproduced below, along with a reply from Thomas Koshy which was also published in the ST (Sept 28):
MP tells why she fully supports CPF reforms
I REFER to the Insight special on CPF reforms (ST, Sept 22). Journalist Li Xueying had raised a number of issues for discussion, one of which referred to an NMP's comment that making annuities compulsory is the start of a slippery slope where the Government 'interferes' in what is essentially CPF members' own money. She asked if I agree.
I replied that Government's job is to intervene where necessary. That is what we are elected to do. Singaporeans will have to judge whether the intervention has helped to create better results.
As a CPF member myself, I fully support the reforms. These are my reasons.
The most significant changes include the higher interest rates on CPF savings and the enhanced Workfare Income Supplement for mature workers. At the same time, Government will push the drawdown age later and introduce longevity insurance.
The higher interest rates are not a one-off measure affecting very few. Instead, it will benefit all CPF members and Government will pay at least $700 million more each year in interest payments to members. The enhanced Workfare will help many low-wage mature workers, and the price tag of $400 million a year is not low.
These are long-term commitments which will help Singaporeans provide for their retirement needs in significant ways.
These commitments must not only be met by the present Government, but also by future governments. To be sustainable, they must not place unreasonable burdens on future generations of Singaporeans. I think we should be prudent and stick to the present commitments for a start.
Likewise, compulsory annuities are a financially prudent and hence more sustainable way for Singaporeans to plan comprehensively for their retirement.
We do not like all the CPF reforms. But most would agree that changes are needed to better prepare us for our ageing population. With these changes, we have taken big steps in the right direction.
Josephine Teo (Mrs)
Member of Parliament (Bishan-Toa Payoh)
Compulsory annuity and CPF members' rights
IN RESPONSE to a Nominated MP's comment that making annuities compulsory amounts to an interference with CPF members' own money, Member of Parliament Josephine Teo said in her letter ('MP tells why she fully supports CPF reforms'; ST, Sept 25) that 'Government's job is to intervene where necessary'.
The implication seems to be that it is Government's job to spend CPF members' funds if Government deems it wise to do so.
In my opinion, this is a question that one should not be so quick to answer.
I have no doubt that the intentions of the current Government are noble and I even support the objectives.
However, there is a bigger, fundamental question at stake here. Do CPF funds belong to CPF members? If they do then, surely, members have a right to decide how to spend them.
To draw an analogy, is it the job of Government to step in and manage the personal bank accounts of citizens? Some are careless with savings. But even with the best of intentions, can it be the job of Government to take citizens' personal funds and manage them more prudently for them? Every man has the basic autonomous right to deal with his property as he chooses.
So the fundamental question is this: Just because it is CPF funds, does Government have the right to decide how they should be spent on behalf of CPF members, even against the wishes of the members?
An affirmative answer would be unprecedented and would mark a definitive change in the nature of members' rights over their CPF funds. The significance of that decision should at least be appreciated. There is more at stake here than whether an annuity is a good idea.
Apart from the compromise to the property rights of CPF members, consider the situation if a weak government should make bad decisions on how CPF funds should be spent. It will be CPF members who will have to pay the cost of such bad decisions which they had no say in.
If purchase of an annuity is the best way forward for CPF members then it would be best if Government educates and convinces the people to do so voluntarily, rather than take the admittedly easier option of making it compulsory at the expense of the rights of CPF members.
Sometimes it is worth compromising efficiency for propriety.
Thomas Mathew Koshy