I knew it - Singaporeans are damn smart. They found out about the fantastic interest rates that can be obtained by locking their money up with the CPF for decades and they want in!!!
Compare this with those silly W. Malaysians who keep clamouring to take their money out.
Singaporeans have certainly figured out what is good for them after reading last Saturday's Straits Times articles on why CPF rate is as "good as it gets". Many are now eager to have more money locked up with the CPF.
Many keen to lock more money in CPF: Manpower Minister
Dr Ng Eng Hen says CPF Board will give customised advice, help.
By Lynn Lee
Dr Ng said the CPF Board will be following up on the queries, by giving customised advice and help. -- PHOTO: ZAOBAO
MANY Singaporeans are toying with the idea of locking more money in their CPF accounts, to take advantage of higher interest rates.
Manpower Minister Ng Eng Hen, who revealed this to The Straits Times, said the CPF Board will be following up on their queries, by giving customised advice and help.
Dr Ng, who announced wide-ranging updates to the CPF system in Parliament last month, sees these queries are a sign of positive feedback.
'They would not ask this, if they could get better interest elsewhere,' he said on Friday, when responding to the debate on the issue.
Changes to the CPF system will hit home in January 2008.
For starters, a higher interest rate of one percentage point will apply to the first $60,000 in all accounts. Only a maximum of $20,000 can come from the ordinary account.
For the Special, Medisave and Retirement accounts, the fixed interest rate of 4 per cent will be replaced with the return on 10-year Singapore Government Securities plus one percentage point. For the next two years, the Government has kept the floor at 4 per cent.
In addition, CPF members have to wait longer before getting their monthly payouts from their Minimum Sum.
They will also have to purchase longevity insurance which will pay them a monthly sum from the age of 85 till the end of their life.
The slew of changes is meant to bolster the retirement savings of Singaporeans and ensure they have enough for their twilight years.
But the last two measures - a delayed draw-down age and compulsory annuities - have caused concern.
Dr Ng acknowledged that most people are not sure if they will live that long, and are worried that the annuity will cost a fair bit.
He said he has asked the committee set up to look into the nitty-gritty of annuities to 'seriously consider' giving more leeway to people, so they can decide when they want to start receiving their payouts.
His feel of the ground is that overall, there is a 'general acceptance' that the changes are required as people are living longer. He added: 'Singaporeans are very sensible people'.
But he said he would have done one thing differently - he would put in 'bold print' the link between the extra one percentage point interest and annuities, and how the earnings would be more than enough to pay for the insurance.
This explanation would have satisfied nine out of 10 Singaporeans, who 'trust the Government to take care of them, and prefer more reassurance than explanation,' he said.
This message was made but it came after the Government's painstakingly laid out the rationale, details and consequences of the changes.
It did so as it was the first time the CPF was being tinkered with in a major way, said Dr Ng.
'We were trying to be pure and we were trying to explain to them that we were changing the interest rate system and how it was being done,' he said, noting that this appealed to the rest of Singaporeans who prefer to be 'involved in the process'.
Noting that the exercise was a 'learning' experience, Dr Ng said the Government would be patient and continue to explain the changes to the different groups of Singaporeans.