Parliament: CPF replies that throw up more questions? (part 2)

We refer to the article “Ensuring safe and fair CPF returns” (Straits Times, Jul 9, A6 full page).

Alas! GIC return was 5.2% over 20 years

In the chart, it states that “Over the last 20 years, the GIC earned an average return of about 5.2 per cent per year”.

Why did it take so long to disclose?

I understand that the GIC’s returns in S$ for the last 20 years has never been disclosed until now. Why?

If Temasek can tell returns from inception – why not GIC?

In the same day’s Straits Times, Temasek’s annualised return for the past 40 years, from its inception is 16 per cent.

So, what is GIC’s annualised S$ returns since inception? If Temasek can tell – why not GIC?

Since we have been told that GIC manages CPF funds, but not Temasek – shouldn’t it be even more important for GIC to disclose its returns from inception?

GIC’s returns more than 6%?

Is this figure more than 6 per cent, since it was disclosed in 2006 that the returns for the 25 years prior to 2006, was 9.5 per cent?

What is the average overall interest rate on all CPF accounts?

As to “More than half of all CPF members enjoy the full 3.5 per cent on their OA … Two-thirds of CPF members earn the full 5 per cent on their SMRA” – what is the prop0rtion of OA and SMRA funds (not the proportion of members) that earned 3.5 and 5 per cent respectively?

Why not just tell us what is the average overall rate of return on all the CPF accounts? Is this figure about 3 plus per cent?

What is the gap between GIC’s returns and CPF interest rate?

What is the historical gap between the GIC’s annualised returns from inception and the average overall interest rate paid to CPF members?

“Fair” to whom?

Are there any countries in the world that keep so much of the returns from the people’s national pension fund and call it “fair”?

Is our CPF interest rate, the lowest real return amongst all national pension funds in the world?

Has the OA rate been a “negative real return” in the last decade?

Perhaps when we have the answers to the above – then, we may have a better perspective as to how “safe” or “risky” our CPF has been, from the perspective of the people or the Government?

Transparency and accountability?

How can Singaporeans understand and accept the various explanations that are arguably, finally starting to come forward now, when there is still no transparency? When there are still so many unanswered questions, like some of the above?

Pensions crisis in the world?

With regard to “There is a looming pensions crisis in most of the advanced countries, and the challenges remain largely unresolved”

– we believe the “pensions crisis” is not about the risks to the people or returns on the pension funds, but rather one of entirely different pensions systems from Singapore’s – in that the pensions are indexed for inflation and are fundamentally funded to a large extent by the state.

In contrast, our CPF system is fundamentally funded entirely by members’ own contributions and CPF Life annuity payouts are not indexed for inflation or based on last drawn salaries before retirement.

S Y Lee and Leong Sze Hian  

P.S. Come to the CPF Protest on 12 July 4 pm to 6.30 pm at Speakers’ Corner

About the Author

Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.