CPF Life payouts: Why liddat?/ Save and save

In CPF on 22/02/2016 at 2:22 pm

Or did I really got my maths, analysis wrong. It’s happened before. Or did I miss the “right” explanation? It’s happened before.

I came across this


What is interesting is that the increase in the retirement amounts do not lead to a corresponding increase in the monthly payouts.

The Full Retirement Sum is double that of the Basic Retirement Sum. But the monthly payout is between $1,200 (Basic plan) — 1, 300 (Standard plan). If they were in line with the increase in the principal sum, they’d be $1,300 – 1400. There’s a difference of $100 or 7.69  — 7.14% a month.

The Enhancement Retirement Sum is 50% more than the Full Retirement Sum but the monthly payouts is $1750 — 1900 but not $1800 — 1950. A difference of $50 or 2.78 — 2.56% a month.

So where do the missing $50 and $100 notes end up? Annualised and aggregated, the amounts are not “peanuts”. Remember the English saying, “If you look after the pennies, the pounds will look after themselves”? The saying meand that if someone takes care not to waste small amounts of money, they will accumulate capital.

The “pennies” are not going to those on the Full or  Enhancement Retirement Sum schemes.

No I’m not going to allege like Roy, once did, that the PM takes our CPF money. He did later say he was talking cock but still owes PM about $415,000. Never mind, he was a celebrity for two yrs.

I suspect that the pennies are meant to ensure that those who are on the Basic Retirement Sum get $650 — $700.

It’s a bit like progressive taxation, taking from the rich to give to the poor. Bit like

Somehow I don’t see Ah Loong wearing green tights.

For the record if either or both CPL Life Basic or Standard pools run out of money, there is no recourse to the state

Our money but CPF Life solvency is our problem

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.

No wonder we kanna save and save. To end here’s extract from CNA in early Feb on a Nielson global survey in 4Q 2015


According to the survey, Singaporeans are joint-sixth in putting their spare cash into savings, sixth for allocating spare cash to invest into shares or mutual funds, and second in the world for placing spare cash into retirement funds.

A total of 64 per cent of Singaporeans will put their money into savings, while 30 per cent have invested in shares and mutual funds. Additionally, 25 per cent will top up their retirement funds to ensure a comfortable retirement.

“Our findings continue to reveal that Singaporeans have displayed a strong desire to ensure financial security through savings and investments regardless of a rainy day,” said Ms Koh. “In addition, Singapore has an aging population and it is a wise choice to plan early for the retirement nest egg.”

  1. Why liddat? Need I say more? CPF is a tax funded social security system in disguise. Just call what you pay in contributions rather than taxes, less the PAP’s figleaf that Singapore is a low tax country drops.

  2. 70% supports it, so much be good lah.

    Chris, CI already said as long CPF got right of survivorship & inheritance, he will not consider it a tax.

    • Chris has made the point that in UK the benefits of insurance contributions (a tax there) can be paid to spouses etc. I suspect that one of his other comments somewhere is a better way of looking at the issue. All payments no matter how they are called to govt should be considered as trabsfers from us to the govt and likewise all payments to us from the govt are transfers to us from the state.

  3. “c kuan”, since you’ve a brit passport, do you support brexit ?

  4. I believe the difference is due to the extra interest of 1% paid on the first $60k. From this year, there’s another 1% on the first $30k for those above 55 years old. That could account for the higher payout for lower retirement sum?

  5. First 60k gets higher interest payout than remaining that’s y it’s not proportionate

  6. […] in CPF for your retirement, the less you get proportionately from CPF LIFE payouts from age 65.…. Here is what CPF shows […]

  7. […] in CPF for your retirement, the less you get proportionately from CPF LIFE payouts from age 65.…. Here is what CPF shows […]

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