Are these 4 CPF reform demands reasonable?

Netizens have been asking for a wide range of demands on the CPF. These range from lump sum withdrawals, abolishment of minimum sum and even the abolishment of the CPF scheme altogether. Are these demands reasonable? Let’s see….


1. Demand to peg CPF interest rates equal to annual returns of GIC and Temasek Holdings

Sounds very sexy, but it is very unreasonable to peg the returns on a savings account to risk seeking entities. If you don’t demand it from your bank, you can’t expect it from CPF. If a bank or insurance agent does this, they make sure you know your money is subject to financial loss.

There is a barrier between CPF funds and GIC – this is called the SSGS (Special Singapore Government Securities). SSGS is not low-risk… it is NO risk. ( It is guaranteed by the Singapore Government.

Low risk and high returns simply do not exist in the investment world. If you know of one, let me know.

Instead of blind pegging, why not do this: Perhaps the CPF system can accommodate a variety of attitudes. For example, the risk adverse investor who prefer assured savings and the risk taker who prefers to invest in private funds.


2. Demand to withdraw CPF and to opt out of CPF minimum sum and CPF life schemes

I assume this is for Singaporeans to be able to withdraw CPF money after they meet the retirement age, not before.

The consideration is: What is the forecast on the number of Singaporeans who will be in financial trouble, because of poor money management?

I’m not saying that we should not trust Singaporeans, I’m just asking what are the risks involved and how ready are we for these risks?

I think there are merits to the CPF life scheme because of an evolving environment – lengthening lifespan and the need to fund longer term of retirements. Outside of Singapore, annuities are famous for funding long term retirements.

The problem lies with the decision to automatically enrol people into mandatory annuity schemes. People do prefer choices. But this is in conflict with the math of annuities. A larger pool of annuities fund is important to help stabilize and manage timely payouts.

Annual increase of minimum sum is annoying. But it won’t continue forever. On the CPF website, it is explained that increases will end in 2015 when CPF savings equal to 2013 dollars. (


3. Demand for more transparency

This is ambiguous: transparent about what? The Board publishes their earnings, holdings, management – just about everything, exactly which part of transparency do netizens demand for?


4. Demand for higher CPF monthly payouts

One easier way is to compare a private company’s annuity plan with that of our CPF system.

If the CPF pays significantly lower, then we have cause for argument. But if demands are out of business norms, then we must assess if it is reasonable. Try telling your bank you want a higher payout and see what they say.


It is good to question the system and suggest ideas for continual improvement. It will be even better if the public at large and especially internet commentators be more reasonable when suggesting demands and changes.






  1. I saport abolish Singapore govt altogether. Very clear citizens can govern themselves very well thank you!
    And no need army since we have no enemies. No need police since we have no crimes. No need education since it’s every obvious from online comments that every citizen are world expert in every field even without need to spend years on that specialty.

    With all that huge budget saved each citizen should be allocated 1 5-room HDB flat, a sedan car, and $1million each year as citizen bonus!

    Please remember to credit me for this new Singapore for Singaporeans initiative! Don’t steal my credit!!

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