This CPF Clause Should Set Off Alarm If Government Guarantee CPFLife Payout

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An honorable member of the Coffee Shop Has Just Posted the Following:

Source: Singapore Statutes Online



Excerpt from The Online Citizen
July 29 2009




Since Manpower Minister Gan Kim Yong has given his assurance in Parliament that the monthly payouts will be paid for life — despite the provision in the new law which allows the CPF Board to stop CPFLife payments unless the Lifelong Income Fund is solvent — then why have this provision in the first place?

Years down the road, the law will prevail, regardless of what the minister said in a past Parliamentary debate.

Moreover, as “the minister cannot make changes at will but must base his decisions on sound actuarial principles to ensure that fund solvency will not be compromised”, is this not somewhat self-contradictory?

As how then can the fund become insolvent and thus stop payouts?

I understand that historically, no country in the world has ever had to stop pension payouts due to fund insolvency.

Even insurance companies’ annuity contracts are contractually backed by the full faith and credit, and assets of the insurance company, and are not subject to the solvency of the pooled annuity fund.

So, why is CPFLife so different?


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