Is Our CPF Broke?

I wrote recently, "No Hair but Got Heart" [Link]. Without going through the details of the schemes, I complimented Tharman Shamugaratnam for his concern and kindness for the poor, the disabled and the old after his 2012 Budget speech.

Now I'm having second thoughts. I may have been wrong. Is his heart where it is supposed to be?

While going through the details provided by Leong Sze Hian of TOC, I realised that I may have been suckered and conned . . . hook, line and sinker!

From Leong Sze Hian in italic:
A Silver Housing Bonus of $20,000 will be introduced whereby, the "Government will provide $15,000 in cash and $5,000 to the CPF accounts. To benefit from the scheme, the homeowners will use the proceeds from the sale of their previous home to top up their CPF savings up to the prevailing Minimum Sum. All amounts above the Minimum Sum can be withdrawn in cash", and the Government expects many to be able to do so.
The Finance Minister in unveiling Budget 2012, goes on to say, "Suppose we have a retiree couple who each had $10,000 set aside in their Retirement Accounts when they turned 55. They decide to move from a 3-room flat to a Studio Apartment. That gives them net proceeds of $250,000. The proceeds will go into their CPF LIFE. But because they will now exceed the Minimum Sum, they take out $8,000 in cash. Together with the $15,000 cash from the Silver Housing Bonus, they get $23,000 in total. Most important, they also get a much bigger income for life from CPF LIFE – an additional $1,200 per month." [Link]


From the above, I cannot help but think that Tharman's objective may be more than helping the poor 55-year-old couple! Pardon my being slow in mathematics but this is what I understand from the "Silver Housing Bonus":

1. A retiree couple sells their 3 room flat, buys a studio apartment and is richer by $250,000
2. However, CPF Minimum Sum "forfeits" $242,000 from the sales proceeds of $250,000
3. The couple ends up with a cash balance of $8000 and is entitled to a "Silver Housing Bonus" of $15,000 cash. Total of $23,000 cash in hand.
4. $242,000 will not be paid to them until they are 65, in drips and drabs, through CPF Life, instead of one lump sum.

Imagine, someone coming to offer you $23,000 with the evil intention to fleece you off $242,000! Damned! Not unlike the "Get Rich Quick" scams you hear so often!

Just who benefits from this 'Silver Housing Bonus' transaction? In one fell swoop, CPF gets a windfall of $242,000!  (For Temasek and/or GIC to mess with?)

While Bernard Madoff preyed on the rich in his Ponzi scheme, it is a disgrace for CPF to prey on the relatively poor and old of Singapore. 

I am concerned. So should all Singaporeans. Is Our CPF Broke? If there is enough money to pay out to CPF members, why are there so many fanciful schemes to delay payment and disgraceful ways to add on to the Fund?

• Why from full payback with interest at age 55 to the current Shameful Schemes?
• Why from No Minimum Sum to $80,000 in 2003 to $131,000 Minimum Sum in 2012?
• Why from "don't know how much" to the $36,000 Medisave Account today?
• Why must a mandatory Admin Fee be paid to CPF to use your Medisave if you are sick?

Why? 

I cannot blame those who are comfortably off to be not too concerned about the CPF. In fact, the 2.5% interest they get is better than what they get from the bank. However, for those old folks with no spare cash and living from hand to mouth, the delay in getting one's hard earned CPF can lead to depression and suicide. It is a joke that Singapore pays us only 2.5% on our CPF while our Malaysian neighbours get 6% interest per annum! [Link]

'What I don't have, I can't give!' (Stephen Covey?) If I do not have enough to barely survive for today, just how the fook am I going to give. Especially to CPF! 

And I thought Tharman got heart!

Regardless of age, we live, we learn.

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