• About Us
    • Fact Checking Policy
    • Ownership & funding information
    • Volunteer
  • Subscribe
  • Letter submission
    • Submissions Policy
  • Contact Us
The Online Citizen Asia
  • Opinion
    • Editorial
    • Commentaries
    • Letters
    • Comments
  • Current Affairs
    • Singapore
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Arts & Culture
    • Consumer Watch
    • NGO
    • Lifestyle
    • Travel
  • Politics
    • Civil Society
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
No Result
View All Result
  • Opinion
    • Editorial
    • Commentaries
    • Letters
    • Comments
  • Current Affairs
    • Singapore
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Arts & Culture
    • Consumer Watch
    • NGO
    • Lifestyle
    • Travel
  • Politics
    • Civil Society
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
No Result
View All Result
The Online Citizen Asia
No Result
View All Result

Balancing the demands of the various groups of CPF members

by dollarandsense
09/02/2015
in Current Affairs, Economics
Reading Time: 4 mins read
0

balance scale CPF

By Timothy Ho

DollarsAndSense.sg weighs in with our views on why the CPF Review Panel has one of the most unenviable tasks in Singapore.

Here is the one thing that the CPF Review Panel would have realized by now. They are part of a review process that will never attain public approval regardless of what they recommend.

Here is why. 

The different expectations of everyone

Most countries’ pension schemes are usually catered for the masses. That includes the poor, the elderly and the underprivileged. For countries with welfare systems, the debate is usually on who should qualify for it, and how much they deserve to be given.

In Singapore, our problems are a lot more different. First and foremost, we do not have any notable welfare system in place. Secondly, the CPF system works in such a way where your pension fund is built up only when you are working, earning and contributing to it. It might be a mandatory scheme, but that does not mean everyone gets to enjoy it. For example, people with disabilities, special needs, homemakers, or those who just can’t get gainfully employment fall through the cracks in this system.

Even among those who are gainfully employed, there are various wages earned. That means everyone is contributing a different amount from one another. In most developed countries, this is sidestepped simply by putting in place a tax rate that could easily shave off up to 20% of your salary, even if you are earning minimum wages. That tax rate is of course used to offset unemployment benefits paid.

So rather than have people with different contributions, and hence different pension account, these other governments simply pool everything they collect from those who are employed, and determine how much should go to the who are unemployed.

The Singapore Case

By now, you would have know that Singapore operates within a very different system. That system is even more complex as different people have different contribution amounts and thus, different expectations for how they should be allowed to use their money.

One of the proposal from the CPF review panel is that more options should be given to CPF members. Two ideas being mooted was that a certain percentage, example 20%, should be allowed for members for withdrawal upon reaching the age of 55 even if they have not reached the minimum sum. Another idea was that those who wanted to top up the minimum sum in return for higher monthly payout should be allowed to do so.

How will more options help Singaporean?

One thing we should note here is that it is extremely easy for the government to simply introduce more options into CPF and please everyone in Singapore. For example, some have asked for full withdrawal of their CPF monies. Others may prefer only partial withdrawal.

Should the government ask for the reason and logic when people demand to withdraw their CPF monies? Should the government be allowed to think for the betterment of its citizens in this aspect? Netizens will say “no”. They believe everyone should have the right to use their money as they will, even if it’s just to blow it all playing jackpots at RWS.

Of course, there are many Singaporeans who will use their money prudently. Examples would include paying down debt and maybe doing some investing, though we hope the definiton of “investing” does not equate into putting money into some type of asset that gives guaranteed monthly dividends of 2%, as that would defeat the purpose of withdrawing from their CPF accounts.

With all due respect to the older folks and the experience they have accumulated, we also hope that no one will decide to take their first plunge into the stock market and invest half his/her life savings upon retirement after reading a few smart books on investing theories and sure-win ways in the library. We don’t want to burst your bubble, but they rarely work and you’d more likely find yourself losing a sizeable portion of your money.

Education Before Options

Basically what we are advocating is for there to be more options that will suit all groups of people, but CPF members must then be able to understand the various schemes and the implications of withdrawing earlier, or even toping up. As it is, it appears that Singaporeans, ourselves included, are already having a difficult time understanding CPF (no thanks to the frequency of changes being made). There is no point having 100 different options for CPF members to consider, only for them to not understand the implications of each, and to end up unwisely choosing a plan where they are worse off than before.

To conclude, we think education and flexibility should go hand in hand to achieve the best results. CPF members must be willing to educate themselves about their money, and the government must be able to find a policy that should work consistently and not have to tweak it every other year. Only then would a range of options will work, and CPF members will be better off.

This article was first published at DollarsAndSense.sg 

For just US$7.50 a month, sign up as a subscriber on The Online Citizen Asia (and enjoy ads-free experience on our site) to support our mission to transform TOC into an alternative mainstream press.

Related Posts

Temasek and GIC reportedly in talks with Adani Group accused of “brazen” market manipulation and accounting fraud
Business

Adani Group releases 413-paged response against allegations of “brazen” market manipulation and accounting fraud

30/01/2023
Singapore warns slower economic growth in 2023
Labour

Less than 1 in 10 jobs created in first three quarters of 2022 went to Singaporeans?

28/01/2023
Peru Congress rejects president’s plan for early elections
AFP

Peru Congress rejects president’s plan for early elections

28/01/2023
UMNO purging members as it sacks former health minister Khairy and suspended ex-defence minister Hishammuddin
Malaysia

UMNO purging members as it sacks former health minister Khairy and suspended ex-defence minister Hishammuddin

28/01/2023
WHO panel in talks on COVID emergency status
AFP

WHO panel in talks on COVID emergency status

27/01/2023
AFP

Two years after Myanmar coup, UN says situation ‘catastrophic’

27/01/2023
Subscribe
Connect withD
Login
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
Notify of
Connect withD
I allow to create an account
When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. We also get your email address to automatically create an account for you in our website. Once your account is created, you'll be logged-in to this account.
DisagreeAgree
0 Comments
Inline Feedbacks
View all comments

Latest posts

Temasek and GIC reportedly in talks with Adani Group accused of “brazen” market manipulation and accounting fraud

Adani Group releases 413-paged response against allegations of “brazen” market manipulation and accounting fraud

30/01/2023
Singapore warns slower economic growth in 2023

Less than 1 in 10 jobs created in first three quarters of 2022 went to Singaporeans?

28/01/2023
Peru Congress rejects president’s plan for early elections

Peru Congress rejects president’s plan for early elections

28/01/2023
UMNO purging members as it sacks former health minister Khairy and suspended ex-defence minister Hishammuddin

UMNO purging members as it sacks former health minister Khairy and suspended ex-defence minister Hishammuddin

28/01/2023
WHO panel in talks on COVID emergency status

WHO panel in talks on COVID emergency status

27/01/2023

Two years after Myanmar coup, UN says situation ‘catastrophic’

27/01/2023
Grab driver supposedly earned $5,227.82 in a week prior CNY, netizens voice worries over his health

Grab driver supposedly earned $5,227.82 in a week prior CNY, netizens voice worries over his health

27/01/2023
Philippines to appeal ICC resumption of drug war probe

ICC grants new inquiry into Manila’s deadly ‘war on drugs’

27/01/2023

Trending posts

Two Indian nationals paid about S$330 and S$730 respectively for forged certificates submitted in their S-Pass application

MOM found issuing EPs meant for foreign PMETs to PRC waitress and general worker

by Correspondent
26/01/2023
40

...

Earning only S$400 a month, delivery-rider turned hawker threw in the towel after two years of running a rojak stall

Earning only S$400 a month, delivery-rider turned hawker threw in the towel after two years of running a rojak stall

by Yee Loon
26/01/2023
24

...

Ho Ching breaks silence over Temasek’s write down of its US$275 million investment in FTX, says it “can afford to be contrarian”

US regulator questions VCs’ due diligence work prior to investing in FTX; Ho Ching says Temasek can afford to be contrarian

by The Online Citizen
24/01/2023
28

...

Indian rupee falls 60% since signing of CECA while Singapore becomes top investor in India

by Correspondent
25/01/2023
59

...

Temasek and GIC reportedly in talks with Adani Group accused of “brazen” market manipulation and accounting fraud

Temasek and GIC reportedly in talks with Adani Group accused of “brazen” market manipulation and accounting fraud

by The Online Citizen
26/01/2023
49

...

Balancing the demands of the various groups of CPF members

by dollarandsense
09/02/2015
0

...

February 2015
M T W T F S S
 1
2345678
9101112131415
16171819202122
232425262728  
« Jan   Mar »
  • About Us
  • Subscribe
  • Letter submission
  • Contact Us

© 2006 - 2021 The Online Citizen

No Result
View All Result
  • Opinion
    • Editorial
    • Commentaries
    • Comments
  • Current Affairs
    • Malaysia
    • Indonesia
    • China
    • ASEAN
    • Asia
    • International
  • Finance
    • Economics
    • Labour
    • Property
    • Business
  • Community
    • Civil Society
    • Arts & Culture
    • Consumer Watch
    • NGO
  • Politics
    • Parliament
    • Transport
    • Education
    • Environment
    • Health
    • Housing
  • Law & Order
    • Legislation
    • Court Cases
  • Lifestyle
    • Travel
  • Subscribers login

© 2006 - 2021 The Online Citizen

wpDiscuz