NDR speech: CPF enhancements – Govt makes even more money?

August 17, 2014

We refer to the article “National Day Rally 2014: CPF changes good but devil is in the details” (Straits Times, Aug 17).

Enhancements to CPF?

It states that “One is making four-room flats eligible for the Lease Buyback Scheme. The other is giving low-income elderly a yearly bonus to help them with their expenditures during their retirement years through a new Silver Support scheme.

At the same time, Mr Lee also said that CPF members will be able to withdraw a lump sum from their savings, possibly up to 20 per cent, after they reach 65 years of age.”

Govt still not spending a single cent on CPF? 

– This much awaited announcement on enhancements to the CPF system, was arguably disappointing, because fundamentally, the Government may still not be spending a single cent on our CPF system, since all contributions are made by the people.

4-room flats Lease Buyback? 

It may make even more money for the Government.

Allow us to explain. By extending the Lease Buyback Scheme to 4-room HDB flats (assuming market valuation of $400,000 for a flat) , a Singaporean may stand to lose about $900,000 (and the HDB gains $900,000?) for each flat (“Each HDB flat lose $700,000 – Enhanced Lease Buy-back?“, Aug 15).

The sums involved may be astronomical as the inclusion of 4-room flats account for about half of all HDB flats – about 500,000 flats.

Low-income elderly yearly bonus from age 65?

How much is the low-income elderly yearly bonus from age 65? It may be a paltry sum in total relative to the estimated excess returns that the Government keeps from our CPF funds of about $260 billion. For example, if the excess returns is 3% – the annual amount is a whopping $7.8 billion.

Can withdraw 20% after age 65?

Allowing people to withdraw up to 20% as a lump sum from one’s CPF from age 65, does not address the issue of people who can’t make ends meet from age 55 to 65.

(Source of all the above posters: Dr Ang Yong Guan’s facebook)

S Y Lee and Leong Sze Hian

P.S. Come with your family and friends to the 3rd Return Our CPF protest on 23 August 4 pm at Speakers’ Corner https://www.facebook.com/events/648543138548193/?ref=2&ref_dashboard_filter=upcoming

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About the Author

Leong
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.