How does the CPF work? Is my money REALLY there?

What does the CPF Board do to be able to earn 2.5% – 5%? And why is there so much criticism/speculation that the money is missing?

We’re already told that it doesn’t go (directly) into the GIC or Temasek Holdings for any sort of investment. See here:

But how do I know?

Before we go on, we do assume you know the following terms:

  •  Account-General’s Department
  • Basic investing (with securities and bonds)
  • Credit Ratings (AAA etc)

So let’s proceed…


First off, CPF cannot take risks. It is unfair for the CPF to take risks with the people’s money.

So, according to the Accountant-General’s Department, there are these things called “Special Singapore Government Securities”. These are bonds issued only to the CPF Board to “meet the investment needs of the Central Provident Fund”.

The investment of CPF money by the Government relieves the CPF Board from taking on investment risk.

In other words, our Government borrows our CPF money, guaranteeing the Board at least 2.5%. In exchange, takes on the risks of a fund manager, and logically, the benefits as well.


What’s the difference right? Left pocket, right pocket – CPF also Government what…


No. You can say that the CPF is a bank. Government borrows this money from the “bank” and if they f**k up, they will have a problem returning the money and CPF can proceed with legal action – destroying the country’s credit rating in the process.


“But they are still Gahmen what, still zheng hu! Why would they sue themselves?!” you may ask.


No, the CPF Board… is a Board. It has to play by rule of law, is audited independently and it is chaired by board members representing different segments of society. If you’ve been following the news, you’ll know that CPIB has no qualms about pulling skeletons out of the closet – be it women or monetary corruption.


The CPF is audited by an independent auditor and the map to your money is published annually in an annual report.


One thing for sure – the Singapore Government doesn’t have any external debt.

If it had a problem with debt and thus had problems paying back CPF – it would definitely have to seek funding from somewhere else.

It also cannot possibly have lost your money because you CAN use your CPF money to buy property, insurance and investments – things that would move your money out of the CPF and/or the Government’s control.

If speculators (and we’re talking highly saavy, highly well connected speculators), like George Soros, were to know of such an issue (and trust me, this person would know). He (or she) would speculate the living daylights out of the Singapore dollar and make a killing. (I refer to a contributed article here. I am responding because I feel connected with this person’s argument and feel that there are some areas that he/she did not clearly explain:

(Quick digress: it is for reasons of speculation and national security, does the GIC not publish details of how much money it has. GIC can tell you how much it has made, but it would be economical suicide to disclose every last dollar. But have a look and you can more or less estimate how much they have


If you really, really want to read more and understand this complex mechanism (and it has to be complex right? We’re talking about national funds here, not Tan Ah Kow’s personal savings account) you can refer to the following sites:

Intergenerational Income Mobility in Singapore


Is there something wrong with our reserves?



  1. I don’t agree with everything that G does in Singapore (purportedly FOR Singapore) — but CPF is a good program.

    Has any bona-fide withdrawals of CPF been rejected to suggest that G does not have the funds? How many of us have used our CPF money for housing, education and investments?

    For the interest that they pay, I would put in more money! But CPF does not accept more money from contributors like myself — there is an annual contribution limit.

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