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17-08-2013, 05:00 PM
An honorable member of the Coffee Shop Has Just Posted the Following:
Right now the number of people reaching retirement age and having the minimum sum is about 38% so it is no surprise we see so many old folks continue to work doing menial jobs like cleaning public toilets and picking up litter
Some resort to begging like selling tissue paper which is essentially a form of begging . The few lucky ones are supported by the children ...because Singaporeans are having fewer and fewer children and many do not have families or children ...over time relying on family support is just not feasible.
However to understand how CPF has failed, one just need to see and accept some simple facts CPF contribution. CPF contribution rate is 36% of our wages is the highest contribution rate for a national retirement scheme in the world no other country do people contribute so much in forced savings....successful retirement schemes such as the one in Chile, Japan require people to set aside 10% or less of their income and these countries achieve close to 100% ability of old to retire when they cross retirement age. But Singapore has triple the contribution rate and less than 50% of people reach adequacy level for retirement ...that means Singaporeans pay a lot to retire but can't.... why is this so?
The 2 main reasons are poor returns on pension fund and use of funds for housing which drains out money meant for retirement to fill govt coffers (reserves). So to fix the scheme those 2 issues have to be addressed. Low reterns on our pension funds hurt pple badly as inflation erode away the money they are forced to save.
To fix CPF it is relatively simple:
1. Disallow the use of CPF for housing. Allowing CPF for housing as caused too fast a rise in asset prices. But don't worry those who have existing loan still not be affected.
2. Lower CPF contribution to 15%. Then put the remaining 21% into take home pay. So basically employers will suffer no increase in wages and employees take home more money. Those with existing housing loans can use this increase in take home pay continue servicing their mortgages.
The existing high contribution rate of 36% causes money to build up in CPF and the tendency is to channel it to housing which is the few allowed use of the funds ...this causes housing price spirals which hurts young Singaporeans. Putting the money in the pockets of Singaporeans frees up the money for them to invest in themselves and improve their quality of life.
3. For the low income subsidize their contributions to help them. This is necessary as Singapore has an unequal third world wage structure.
4. Give Singaporeans the choice for their CPF between low fixed return (current scheme) and a scheme managed b the best fund managers CPF can find.
These are feasible approaches to fix the current problems with CPF ...but why isn't the govt doing it
1. By forcing large amounts of earned into CPF then channelling it to housing allows the govt maintain high housing prices and fill up its coffers.
2. The low fix return we get is the result of loans to GIC ...CPF has become a source of cheap funds for reserve building. Reserve management is a source of lucrative jobs for our elites until today there is no transparency on how much Ho Ching is paid and how much the top people in GIC are paid. All national pension funds are transparent about then salary scales of their managers why not Singapore?
Basically they will not fix the CPF scheme despite the fact it is failing because it serves their own interest to retain it as it is to benefit the people on top. This is one just one example how the pap compromise the quality of life of citizens and ultimately the strength of the contry measured by social coheiin for its own benefit. They will tweat it with CPF Life, they will push back your retirement to force you to work longer to feed them but they will never be able to put the interest of the people first so long as they hold dominant power over us.
Click here to view the whole thread at www.sammyboy.com (http://www.singsupplies.com/showthread.php?160189-Key-steps-to-fix-failing-CPF-scheme-and-why-the-PAP-wont-do-it&goto=newpost).
Right now the number of people reaching retirement age and having the minimum sum is about 38% so it is no surprise we see so many old folks continue to work doing menial jobs like cleaning public toilets and picking up litter
Some resort to begging like selling tissue paper which is essentially a form of begging . The few lucky ones are supported by the children ...because Singaporeans are having fewer and fewer children and many do not have families or children ...over time relying on family support is just not feasible.
However to understand how CPF has failed, one just need to see and accept some simple facts CPF contribution. CPF contribution rate is 36% of our wages is the highest contribution rate for a national retirement scheme in the world no other country do people contribute so much in forced savings....successful retirement schemes such as the one in Chile, Japan require people to set aside 10% or less of their income and these countries achieve close to 100% ability of old to retire when they cross retirement age. But Singapore has triple the contribution rate and less than 50% of people reach adequacy level for retirement ...that means Singaporeans pay a lot to retire but can't.... why is this so?
The 2 main reasons are poor returns on pension fund and use of funds for housing which drains out money meant for retirement to fill govt coffers (reserves). So to fix the scheme those 2 issues have to be addressed. Low reterns on our pension funds hurt pple badly as inflation erode away the money they are forced to save.
To fix CPF it is relatively simple:
1. Disallow the use of CPF for housing. Allowing CPF for housing as caused too fast a rise in asset prices. But don't worry those who have existing loan still not be affected.
2. Lower CPF contribution to 15%. Then put the remaining 21% into take home pay. So basically employers will suffer no increase in wages and employees take home more money. Those with existing housing loans can use this increase in take home pay continue servicing their mortgages.
The existing high contribution rate of 36% causes money to build up in CPF and the tendency is to channel it to housing which is the few allowed use of the funds ...this causes housing price spirals which hurts young Singaporeans. Putting the money in the pockets of Singaporeans frees up the money for them to invest in themselves and improve their quality of life.
3. For the low income subsidize their contributions to help them. This is necessary as Singapore has an unequal third world wage structure.
4. Give Singaporeans the choice for their CPF between low fixed return (current scheme) and a scheme managed b the best fund managers CPF can find.
These are feasible approaches to fix the current problems with CPF ...but why isn't the govt doing it
1. By forcing large amounts of earned into CPF then channelling it to housing allows the govt maintain high housing prices and fill up its coffers.
2. The low fix return we get is the result of loans to GIC ...CPF has become a source of cheap funds for reserve building. Reserve management is a source of lucrative jobs for our elites until today there is no transparency on how much Ho Ching is paid and how much the top people in GIC are paid. All national pension funds are transparent about then salary scales of their managers why not Singapore?
Basically they will not fix the CPF scheme despite the fact it is failing because it serves their own interest to retain it as it is to benefit the people on top. This is one just one example how the pap compromise the quality of life of citizens and ultimately the strength of the contry measured by social coheiin for its own benefit. They will tweat it with CPF Life, they will push back your retirement to force you to work longer to feed them but they will never be able to put the interest of the people first so long as they hold dominant power over us.
Click here to view the whole thread at www.sammyboy.com (http://www.singsupplies.com/showthread.php?160189-Key-steps-to-fix-failing-CPF-scheme-and-why-the-PAP-wont-do-it&goto=newpost).