CPF Life: What SunTimes left out

In Financial competency, Financial planning, Media on 05/06/2014 at 4:37 am

One merit about CPF Life is that it is run by the Government. That removes the big worry of retirees as to whether their insurer is financially strong enough to withstand the next global financial crisis in order to keep making the monthly payouts, is what a SPH reporter wrote last Sunday

Those who read this blog a few days ago will know that he is being constructive, and nation-building.

There is a provision in the law governing the CPF Life Plans which states that payouts are contingent on the Plans being solvent. This is because premiums that are paid in to get the annuities are pooled and collectively invested. If the plan you chose doesn’t have enough money to pay out, you die. This is unlike the [Minimum Sum] scheme, where account holders are legally entitled to the monies in their CPF accounts …


The government has said the provision on solvency is only a precaution unlikely ever  to be used. If so, why have it? This is a peace of mind issue. It was Gan who made this assurance when he was MoM.

He should have told us the fact that the govt refuses to “protect” CPF Lifers from fund failure, despite CPF Lifers having to participate.

If one cannot trust a SPH journalist to give us the relevant facts on a non-political issue, how can we rely on any SPH (and MediaCorp journalist, for that matter) to analyse or report political issues? After all our local media is proudly constructive and nation-building?

BTW, how does this refusal to “protect” CPF Lifers square with what PM said last week? “We want to enhance [the CPF’s retirement-annuity scheme] so that the payouts can keep pace with the cost of living,” and “We also want to provide stronger assurance in retirement for the lower-income groups.”

But the article made one gd point, The Standard plan offers an annuity scheme similar to what retirees in Britain opt for. The Basic plan is commonly adopted by US retirees. Reminder, the Basic plan is closer to the Minimum Sum scheme that is no longer available. For more:

  1. Everyone knows that the straits times and Sunday times follow the goverment orders.
    From your article, you seem to expect them to be impartial?
    Or are you trying to be sarcastic?

  2. […] Singapolitics: CPF review: Here are my three wishes – Thoughts of a Cynical Investor: CPF Life: What SunTimes left out – Limpeh is Foreign Talent: The CPF situation: something has got to give – Life Sucks: […]

  3. The bee is in the interest accrual from age 55-65 as 50% of RA is deducted for annuity premium at age 55 for LIFE Standard and 10% for LIFE Basic. If you distill CPF LIFE to the nth degree, you may agree with me that there is an inherent moral hazard that LIFE works against those who met their Age 55 cohort’s CPF Min Sum in full cash which should give them more retirement security at a very basic level than those who use up to 50% Prop Pledge.

    CPF LIFE Pay-out depends on (i) market interest rate and (ii) mortality rate of fellow CPF Members!

    PAP Govt privatise profit thus swelling public coffers but socialise national obligations by passing on the buck to citizens. Hence, fellow CPF members are saddled to pay for those who, say, have only $5,000 in RA and apply to join CPF Life for a paltry pay-out until death – and this group may well live longer as they walk more and eat less and very little meat.

  4. […] Times left out fact CPF Life payout can be zero CPF Life: What SunTimes left out | Thoughts of a Cynical Investor __________________ No netizen ever strike, rioted or overturn police patrol […]

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