Sunday, October 07, 2007

The Mathematics of Pension Fund Returns....

'We never invested the CPF money in shares or bonds.
We always invested the CPF money in Singapore Government
bonds where the Singapore Government guarantees a fixed return
and you're always going to get it,' said Mr Lee, who is the GIC chairman.
"In other words, you will never lose. And if anybody thinks
he can do better, he's welcome to take his money and
go to a fund manager and try and do better"

What is the difference if your money returns 5.5%vs 3.5% a year ?

$100 at 3.5% over 40 yrs = $395
$100 at 5.5% over 40 yrs = $851
$100 at 7.5% over 40 yrs = $1800
$100 at 10% over 40 yrs = $4500

Just a 2% improvement of returns means that you retire with twice as much money ....if you're the Chilean govt which returned 11.8% since the inception of its national pension fund or Calpers, your retirees will have 10 times more than than another govt that gives a return of 3.5%. The long term rate of return is single most important factor when we talk about the success of a pension plan. A national pension fund simply cannot depend on how well a govt can persuade its people to put aside more and more money to be locked up at low returns....then convince them to work harder and longer using various state controlled media. A guaranteed low rate of return is a useless guarantee because of inflation, the buying power of money is not guaranteed. It becomes harder to swallow when you find that the money is loaned to a state owned enterprise that returns 9% per yr with that money and is not going to give much of it back to your pension account.
In a country where alternative views receive very little air time and the people's representatives are men and women who have learned to say 'yes' in a hundred different ways and see it as their mission to convince the people that whatever is done and changed is for their own good, you can always tell people what you're doing is the best that can be done...and for that you deserve your millions while the ordinary people fall back on their work ethics to see them through yet another few years of labor.

When the strain of labor makes it hard for the people to smile, you can always have another "Smile Campaign"...give out a few goodies close to elections, get the media to recap on the wonderful achievements since the last one and the people will appreciate that you have done a good job. The people can always be made happy if they are told only what is good for them.


Anonymous said...

The reason 66.6% voted for PAP is because they do not know the real dangers. Now these are showing up in the CPF issues.

Trust PAP only if it truly delivers; trust PAP at your peril if you trust blindly.

Like Lao Tze of yore said : If the people have no sense of awe, then aweful things will visit them.

Wake Singaporeans, the time is up for PAP.

Start resisting the dictatorship in your thoughts and the rest will follow.

Cantabile said...

I agree, enough is enough. I have been naive enough to vote for PAP in the past.

When I was student I even admired LKY of his steel resolve and iron will to exercise what he think is for the greater good of the nation. How mislead was I.

Anonymous said...

LiConYou talked cock again.

Now he says that we are welcomed to invest our CPF monies elsewhere if we think we can obtain a higher rate of returns more than what CPF is paying.

But then I would like to pose this question to him : Then why restrict me to a certain limit even though I can stomach greater risks in investing my excess CPF funds. Why so many changes, limit this & limit that ?

Even some of the blue chip Singapore shares, Reits, Bonds are returning a greater return of 2.5% in dividends.

Despite their refusal to admit that the CPF funds is a cheap source of funds, I believe the only reason why they are having all these restrictions is simply to have a ready source of cheap funds at their disposal so that they can earn the differential earnings for themselves at the expense of the CPF members.

It's just plain robbery, PERIOD !!!

Anonymous said...

Good writing,, Lucky Tan

Oh, by the way, I'm writing from Chicago. Over here, I have seen a lot of public advertisements on giving rebates back to the public and the common people, ranging from electrical utilities to public transport. Their common messge is:
We heard YOU.

The PAP's message to the people is:
We FUCK YOU and we will continue to fuck you because you can do nothing to US.


Anonymous said...

vapThe ruling elites always come out with the 'if you can' dare in every argument. Like in the election, they always say 'if you can' find a credible alternative, but they refuse to let others take up the challenge, instead they devise ways to prevent oppositions from ever coming into power with ever larger GRC's and redrawing of boundaries etc. So, Singaporeans having never tested alternatives always believe that whenever thrown the line 'if you can' in any argument, they back down and start thinking they can never do better.

Anonymous said...

I do think positively that Singapore can be a greater and sronger nation without the PAP.

I would like to see the DOWNFALL of the PAP government in my life :-)

Lucky, continue to show us how good this CPF scheme is "as good as it can get"!!!

Anonymous said...

Which demographic group dominated in voting for PAP?

Hard to tell and it is presumptuous for anyone to claim disparagingly that only peasants did it.

At the same we must not blame too much the 66.6% from doing so because they do not see a real alternative.

They are not totally wrong in so thinking. Just look what the opposition have been doing or rather have not been doing.

They cannot even close ranks and confront the PAP on this momentous CPF issue.

The real opposition have already been dealt with by PAP. You know who they are.

66.6% of voters for fear of certain consequences of electing non-credible people into Parliament, creates as a result a far greater consequence : a dictatorship that is no longer effective in running the country yet have no qualms to exploit people's basic means of livelihood to make up for their mismanagement.

From all indications there a black hole with the nation's finances, one so big that countless billion dollars of CPF savings are being exploited to do patchwork damage control right now.

If this continues, more and more Singaporeans will end picking tin cans in the streets or fleeing this country for good.

Capt_Canuck said... members/common/;jsessionid=cTLM6yYZRknc?site= spi&comicId=&comic=dilbert&stripId=322325

Hmmm, could the brains of a comic writer have figured out the PAP's true thoughts on how the CPF should run since they keep putting the age up and up? hmmmmmmm

Zantheus said...

I say the time for words is over and the time to act is now. If the Burmese can do it I don't see why we can't.
We live in a world where they taught us to fear to render us passive. Maybe it is time to forget who we are and remember what we stand for.
The dilemma is we have to leave because we are not happy with the government but we can't leave because we love our country...
People shouldn't be afraid of their governments; governments should be afraid of their people. Viva La Revolucion!

Anonymous said...

"And if anybody thinks
he can do better, he's welcome to take his money and go to a fund manager and try and do better"

There will be longer queue at all CPF offices if the above statement is true.....

Anonymous said...

Yes, enough of words, yak yak yak, bitch bitch bitch that's all we ever do. When it comes to voting the money grapping bastards out, we are contented with a few hundred dollars and keep them in power. Well hear this, we deserve this, every darn Singaporean who voted for them deserves this and much more. Well you idiots, the Chilean government gives its people 11% return on CPF, the ordinary leaders of Malaysia can give a minimum of 4.25% to their people and our extraordinary million dollar plus pension leaders have screwed the whole population for the past 40years with meserable returns and now we are getting screwed further with extended withdrawal age and anuity. We deserve to get screwed ,not once but many times over..

Anonymous said...

>>Yes, enough of words, yak yak yak, bitch bitch bitch that's all we ever do ...

Yeh, that what's everyone is doing here including yourself. But don't worry it is precisely in such alternative forums that the real opposition build up.

PAP does'nt take such blogs lightly ; they want to control them with a new law even.

But they are finding difficulty.

In fact I want to see more visitors to this blog, provided writers take care as much as possible to be credible and not spit too much venom. Keep it readable!

So don't underestimate the anti-PAP blogs; PAP is probably squirming over them.

They know better all along that the mass media - and the blogs are included - are highly influential. That is why there is so much control going on even now including the removal of 2 top editors in last one year from TODAY apparently for being too liberal in criticising the govt.

Only ST Forum editors and journalists get to warm their seats because so many are super obedient and will write on small stuff even during crisis like this.

The opposition fools do not understand the power of the mass media and prefers working the ground with leg work. It is like using horse and buggy in the age of computers.

How can they win?

Anonymous said...

Late last year the PAP wanted to pass to legislation to control bloggers who would need to register with PAP.

Why so? Because there are just too many anti-govt blogs over the Internet and PAP wants to silent them by threat, lawsuits and its usual dirty methods.

Because blog services are run by foreign companies like Google, PAP has no access to the IP addresses of those using them. These IP addresses are your identities which are captured by the blog service webserver.

If possible PAP would even want to work with the American authorities to find out. PAP is ever so sneaky; the Home Affairs even snooped around in people's computers via the Internet once.

But I believe Google wont be giving them out.

Why so? Because few years back Google even dared to defy an American high court order to reveal its records of search terms used by surfers.

To put all in another way, blogs are by far the only channel not subject to PAP control. It is the chink in its armour, so to speak.

However if you go register a website like a .com or worse to serve up your political views then you have been had.

If a political blogger wants to go far, keep true identity secret otherwise some PAP ministry will send you a warning letter or email that you have broken the "SBA Act" and the consequences are this and that and one is not to reveal the content of that email to others, blah, blah, blah.

Then you are in a fix and would probably have close down or turn PAP apologist or something else to make up.

I am seeing this sort of thngs going on.

Anonymous said...

PAP challenges critics that if they can make more than 2.5% out of their CPF, they are welcomed to try.

Precisely, some did in the past few years in insurance-based unit trust and reap up to 100% profit.

However the profit still have to go back to CPF Board even if you surrender your insurance policy. You cant just take the profit out from the insurance company.

Once back into the CPF Board, your money is now captive to PAP to do as it likes, such as those elucidated already in this blog.

In the end it is all paper money and the value will be drastically eroded by more schemes from PAP's bag of tricks.

Anonymous said...

We are treated like employees, rather than citizens, in Singapore Inc.

so, if you donch like your management, and its impossible to change your management, then resign lor...

Anonymous said...

"When I was student I even admired LKY of his steel resolve and iron will to exercise what he think is for the greater good of the nation."

LKY is just a Marcos or a Suharto who had gone to Cambridge.

In fact, he is worse in many ways. At least Marcos and Suharto did not try to install their offspring as successors.

Like Marcos and Suharto, LKY is corrupt to the bone. But as a Cambridge trained opportunist, he is cunning enough to hide behind a propaganda of clean and corruption-free government.

Well, the bottom rungs of the Singapore government are probably relatively clean -- we do not expect to have to bribe our custom officers or traffic police.

But the top levels of the government, filled with LKY's relatives and cronies, are hideously corrupted.

The recent CPF saga is just another instance of the commoners having to watch helplessly a pack of hyenas feeding on their carcasses.

LuckySingaporean said...

Please refrain from using words like cheat, corrupt in your post....and focus on the issue at hand.

I have not needed to remove any comments yet...don't force me to turn on moderation.

George said...

According to Lao Tze:

the best rulers are those the people hardly hear about/from

the next best, the people praise and admire

the next best, the people talk about

the next best, the people hate

Anonymous said...

Hi Lucky,

I'm not so lucky. Maybe you'd like to read my story. Here goes:

"Before I Die"

"To a question by opposition MP Low Thia Khiang (Hougang) on whether the Government of Singapore Investment Corporation (GIC) uses funds from the CPF funds to invest, Dr Ng said: "The answer is no."

"Later he rose to add: "The relationship is not so simple".

Oops, reminds one of engaging the gear before stepping on the clutch!

I watched a video of parliament and I saw hen denigrating a nation by mocking his own and other MP's, violating and belittling the intelligence of Singaporeans, insulting uncles like me for being too dumb to handle our finances, saying, "having a fling here, having a fling there". "Trysts"? I could not believe my ears and eyes! I cannot believe that an overpaid manpower servant that we pay with our taxes thinks so lowly of his fellow citizens! A case of “kurang ajar” or, in the hokien dialect which is pretty popular in parliament now, “kiam kah” or “boh kah xi!

If I remember well, when I started work as a teenager in 1968, I was told by my boss that 25% of my pay will go to CPF. He will contribute 25%. My boss said, “That’s law, don’t worry. Government guarantees you’ll get it all back when you retire at 55”.

On reaching my retirement goal/age of 55, I was shocked that they have moved the goalposts many times since I started work in 1968. My money wasn’t my money anymore. Yes, there's Special, Medisave & Retirement Account - SMRA - But, "You can't touch these!" Courtesy of MC Hammer?

To be fair, I received my yearly CPF statements of the changes, but who reads? I did not.

8 years ago I had a heart attack and ventricular fibrillation. I was jobless for 7 years. Lately, I was suspected of having other health challenges and in the past months, I had my share of visiting polyclinics and hospital.

Poor rich! I'm rich enough to have more than $28,000 sitting in my Medisave Account BUT I cannot use it for tests, treatments and medicines in hospitals and polyclinics. Yes, my bills from Changi General Hospital and Polyclinics had to be paid in cash from my pocket.

Oh, they tell me I can only use it for chronic illnesses only and/or if I spend more by visiting the hospital again for an artery ballooning/stent or a by-pass procedure. Or maybe another heart attack and ventricular fibrillation triggered by the agony and heartache of “My Money Sits in CPF but Cannot Use For Staying Alive!” ; “They Use my $$$, Make A Profit, Don’t Pay Back, Then Say I Stupid” & “Not Enough, Want Some More, Force Annuity On My Children!” or "Their Shameless Audacity Is Too Overbearing For Me".

Since nobody wants to employ a sick geezer with a heart condition and other challenges, I am fortunate that a kind soul, having faith, love and trust in me, offered me a sum of money to start a little business last year. I registered a sole proprietorship in ACRA to start the little biz. Another heartache - I was informed that I could not register because I owed CPF Medisave which I did not pay when I was self-employed previously. Unless I pay up, I could not register my little business.

Imagine, I was broke and I still had to top up my Medisave (already loaded with >$28,000) if I wanted a license to make myself productive again. Simple: No Top Up, No License. This is what I know as Uniquely Singapore First World Standard of Whatever!

Another irony: After 7 years of joblessness (due to my health challenges) without paying tax, I made good enough to pay tax again for year ending 2006. I've done my part as a citizen, I even did NS in the army from 1969 to 1971. Yes, and my fair share of reservist training for many years too!

"Fend for myself"? I have. I even pledge myself as part of “a united people regardless of race language or religion to build a democratic society based on justice and equality so as to achieve happiness, prosperity & progress for our nation”. As a simple heartlander, I’ve done my tiny part. No worries, I may just jump in front of moving MRT before I bother my busy hardworking government with any problem. Maybe they need their precious time to fix the opposition and plan to buy more votes (or lose less votes?)

Question: What has the Government done for me? Zilch. . . and please don’t do anything. Whenever you do something for the good for the people, you cause me more pain than gain! Eg: PUB increase, 7% GST, Bus fares increase, you-name-it-it-increase, etc. Just don’t hurt my family further by forcing my children to pay for annuity which is another scam to leech from innocent citizens!

On second thought, you may want to upgrade my HDB flat with a “Go-And-Die-Chute” so that sick and old people like me who have outlived our usefulness to the regime can self-destruct by jumping into it. Health Mintster may like this idea as he wants me to die at home so that I will not be a bother or a burden to his money making hospitals. Meanwhile, I'll enjoy the polyclinic’s webcam!

Based on the video, Mintsters just give us plenty of sarcasm and zero empathy. Just hen talking cock! Another wayang, another day’s work to justify obscene million dollar pay! The more they "strengthen the CPF", the worse our lives become. To "CPF - Pow chiak, pow ho", I wouldn’t say, “Mee Siam Mai Hum” but I'd say, "Chui kong, lampar song”.

Please, denigrate us no more and stop treating Singaporeans like idiots! Yes, delay no more! Let us live with dignity. Just because we are peace loving citizens does not mean that you can walk all over us. Trying your luck too far may just change a push to a shove. Yes, even peaceful monks can turn into citizen activists. They are at it in Myanmar!

Do what’s honourable - Simply explain the difference in returns of GIC, Temasek and my hard earned CPF. Come clean with transparency! I may not understand but Mr Ong Kian Min and Mr Siew Kum Hong may help me out.

My problems may have been less if the returns in my CPF had been on par or better than Malaysia’s EPF. Maybe part of the interest that could have been mine has ended up in the purchase of Manchester City Football Club. Am I a co-owner now?


Feed me to the Fish

Anonymous said...

Reading the previous post just saddens me.

And I believe this is a common story because I see many around me in their 50's suffering from serious health problems due to struggling to survive in this country over the decades.

It is not easy in Singapore what with now the widespread exploitation of our own citizen workers with permission from PAP like :

1) closing one eye to long overtime without compensation

2) bring in a flood of younger foreign workers to rob Singaporeans of all kinds of jobs including menial ones.

The last report says 50% of jobs in 2006 went to foreigners - not inclusive of PRs mind you.

I am telling my children to wake up to the reality; think international and dont get soaked in this country.

It is a very small country and that gives PAP absolute control to do what it wants to do.

It is not that PAP is so clever or great. It is just the geographical limitation of this land.

Try that in another country and they will get overthrown in no time.

See how CSJ and his team just got arrested for demonstrating in public.

His poor sister would have to spend her time in jail. She looked so downcast on TV. But they should know better. Their strategy is wrong.

Despite all these, SDP could never win a single seat, having been tarred by PAP propaganda.

Given these circumstances Singaporeans have to survive by thinking global.

What to do, work in other countries if you have to and then may be eventually move out to a more comfortable land.

And first and foremost, look after your health. Start researching about natural medicine like TCM and seek carefully the right remedies.

This is very important because the kind of public healthcare in Singapore is Western and always costs a bomb - despite the so-called PAP subsidies - and is not good in curing many of the chronic ailments affecting Singaporeans.

With good health we can still carry on. Without it, life is hell.

Anonymous said...


"And if anybody thinks
he can do better, he's welcome to take his money and go to a fund manager and try and do better".

Why give us a miserable 2.5~3.5% when Temasek is getting a much higher return using our CPF monies ?

We will be grateful if you can drop dead and stop deceiving the people.

Anonymous said...

At the NUS recently, MM asked why no Singaporean students ask questions. Well, the students are now smart enough to know that if they asked probing questions they would get the wrath of God, like those young journalists not long ago. You could see the reddening of the face, the raising of the voice and the anger. Who likes to face such an opponent?

LuckySingaporean said...

anon 10:20,

I think those NUS students are useless. Whenever I meet my MP or a minister, I would take the chance to ask questions. It simply takes common sense not to get into trouble. People know they got to jail if they hold a sign with 4 other people outside a govt building...but nobody ever got into trouble by asking questions.

LKY is not so stupid to come after a student and damage his legacy which is one of economic success...all the ISA/ISD stuff he too wants to play down and be forgotten. The last time some student stood up and insinuated that he was a despot, Jamie Han I think was his name. Nothing happened to him.

I think those NUS students after 25 years of Straits Times are unable to generate any questions off their head. They are happy with the status quo, their lives and everything around them. Straits Times brings happiness and bliss.

They had no questions because they couldn't think of any.

Anonymous said...

A few reasons why NTU students were not asking MM questions:

1)De-politicisation by both education and mass media.

I asked a few young Singaporeans before the last elections who they would elect. The common answer was "Of course PAP lah".

This might not apply to all young S'poreans but the point is that the "of course" implies no need to understand the political situation.

Oops what is "political situation"? That might even sounds Greek to many young Singaporeaans.

2)Risk-adverse. To be black marked while an undergraduate is a tragedy and this may not even come from the MM or PAP.

12 years back, another university management even terminated the publication of its own varsity journal on the reason that the articles therein had been too critical of the govt.

Such internal self-censorship due to fear of the PAP is strong enough to deter political outspokenness.

3)One blog claims that the MM did threaten Jamie Han - who in previous forum called him a tyrant - with the statement that "you don't risk you life by calling me a dictator".

Can anyone who was at that forum tell me if this was true?

4)MM assures students that PAP does do not trace you on Yahoo or Google.

I believe him and on the basis that PAP has no such capacity, not when blogs are hosted by foreign private companies, who records are not available to PAP.

So if you want to challenge PAP at the polls one suggestion is not to set up a formal political party because then PAP can have more excuse to finish of a threatening political opponent in such a party without demeaning itself.

After all it is an organisation and organisation always sound big.

But for all you know a political party is just be a motley crew who are no smarter nor stronger than the individual.

So if one must have a team, go for an informal friendship think tank and stand for election as an individual. This is one way to prevent PAP coming down hard on one.

PAP is not liberal because it protects its territory like the pupil of its eye.

This is one reason it has become so established in Singapore.

JBJ and CSJ despite their parties were actually nothing much to the PAP complex.

But because they are too vocal and opposed too much - sometimes in a bumbling and personal ways - they have to be finished off.

If PAP is really so liberal, then just ask why Francis Seow and Tan Liang Hong who were entirely new faces in the opposition parties during previous elections had been hounded like criminals?

Don't misread the situation.

Anonymous said...

The closing of 12 years back of NUS journal by the university management was followed by the banishment of an undergraduate permanent resident editor of that journal from Singapore by the immigration authorities of Singapore.

Read up also how opposition MPs who walked out of Parliament only to be arrtested and put in detention without trial permanently until they confessed they were communists and out to destroy society.

This legacy may be forgotten or unknown to the younger Singaporeans but the leadership that did that is in charge.

Times have changed but do people always change their characters so easily?