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Posts Tagged ‘CPF Life’

CPFLife: PAP govt cares for u, really they do

In CPF, Public Administration on 15/02/2019 at 1:20 pm

(Part of an occasional series meant to burst the blood vessels of cybernuts like pork-eating, alcohol drinking “bapak”, and tax-dodging grave-dancer “Oxygen”).

Kuala Lumpur EPF branch retirement advisory service (RAS) officer Nornisah Mohd Yusof said many subscribers ran out of their EPF savings within three or five years after retiring although the life span for Malaysians had increased to 75 years.

“More worrying are cases where retirees withdrew 70% of their savings and spent the money in less than 30 days,” she told Bernama.“

https://www.thestar.com.my/news/nation/2016/12/28/epf-some-retirees-spending-all-their-withdrawals-in-30-days/?fbclid=IwAR21pdbrTrQOaWlZbr5KkFr6KJBF1PyKDFwvV_xjlkUrnGn00Z4PPIxJ9Bs

 

 

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LBS: Perspective of 75-yr old retired technician

In CPF, Financial competency, Financial planning on 22/01/2019 at 10:25 am

In alt media and social media, the HDB buy-back scheme is dissed by people like Terry’s Indian goons and their fellow cybernuts.

Here’s the perspective of a 75-yr old singleton who was a PUB technician and who has a resale HDB three-room flat. He recently opted to lease back his flat to the HDB.

— He doesn’t have to move.

— He gets $20,000 in cash when the formalities of the lease-back are completed.

— Until he dies, he’ll get about $1,000 a month. Looks like the HDB buys him an annuity for life.

(Will try to explore this aspect further after Chinese New Year (Mum’s still “under observation” in atas hospital ward*) to see, if on the available info, the premium paid is reasonable. Actuarially it will be prudent, but is it reasonable? And not kia su like the CPF Life assumptions: Will PM, tonite, give peace of mind on CPF Life Standard?))

— In 20 yrs time, when the lease expires, he has the assurance that he’ll be found somewhere to live until he dies.

— He says if he dies in the next 20 yrs, his nominee will get something. More if he dies earlier, very little if he dies later.

He’s happy.

And he’ll vote PAP. One reason is to make sure that in 20-yrs time he’ll be found a place to live. He knows he can’t trust the likes of Mad Dog, Goh Meng Seng and Lim Tean, even though he knows that there are good oppo people out there like Dr Tan Cheng Bock, Dr Paul and other SDP activists, and the Wankers.


*Private hospital treatment, public hospital fees

 

 

 

CPF Life starts at 70: Alt media way behind the curve

In CPF, Financial competency, Financial planning on 21/01/2019 at 5:08 am

So alt media has only realised that CPF Life payments begin at 70, unless one opts in to start at 65.

In June last yr (Trumpets for me please), I highlighted what they are now only KPKBing about now. My piece then

CPF Life: How withdrawal age “moved” to 70/ Silence of the activists

I was going to explain how the dastardly deed was done but when TRE republished
Red alert! Achtung! S’poreans approaching 65, a TRE reader gave the answer, saving me the need to explain.
Lye Khuen Way:

The CPF Board do send out letters to those approaching their cohort drawdown age.
For those borned in 1953, it’s their 64th Birthdays.

There after, I believe it is 65.

The sly way they put it, is to suggest that you could delay your drawdown and receive more per month.

That applies to both Minimum Sum Scheme or those who opted for CPF Life.

Those who instinctively do not want any delay might just chuck the letter and the forms aside.

That’s where the devils come in.
Tuck away in the middle of the FORM, is a line that tell you that if you didn’t indicate that you want to start your drawdown from age 64,or 65,the DEFAULT AGE is 70.

Yes, Age 70.

I happen to opt for the CPF Life and somehow my enhanced topup application had already stated I wanted my draw down to start from age 64.

If unsure, call, write or better still go down personally to any of the CPF offices. Note that the Main CPF Board office is closed on Saturdays.

(Emphasis)

In places like the UK, or US of A or Europe, this kind of action

Tuck away in the middle of the FORM, is a line that tell you that if you didn’t indicate that you want to start your drawdown from age 64,or 65,the DEFAULT AGE is 70.

is not acceptable. It’s not Christian, kosher or halal. It’s politically toxic, playing games this way.

Civil rights activists would be KPKBing and rightly so.

Here it’s par for the course.

Worse our ang moh tua kees don’t care. They don’t have to rely on CPF Life payouts. People like Kirsten Han got pa’s and ma’s money just like Harry’s children.

And juz as bad is the silence of the Oppo politicians. Nothing from the Wankers’ Party or from Goh Meng Seng (Silence of Goh Meng Seng) or Lim Tean (Where’s yr defamation video and jobs rally Lim Tean?) the two talk, sing song artistes.

All so rich. It’s a fact that Lim Tean rents a black and white bungalow costing $15,000 a month.


Last yr, I also predicted: Akan Datang: Why CPF Life payments will begin at 85

Related: More on 85 being the new CPF Life payout date

More on 85 being the new CPF Life payout date

In CPF, Financial competency, Financial planning on 06/07/2018 at 10:53 am

In Akan Datang: Why CPF Life payments will begin at 85, I “explained” why the PAP was planning to move the CPF Life start date to 85: Many S’poreans would be dead by then because 85 is 2.4 years above the average S’porean life expectancy rate of 82.6 yrs.

Seriously, two points to note on why there’ll be a move to up the age when CPF Life starts paying out (Remember the default age is now 70:CPF Life: How withdrawal age “moved” to 70)

When ang moh countries introduced state old age pensions: example when UK introduced state pensions in 1908, the retirement age, 70 for both men and women, was well above average life expectancy.

And then there’s the issue of accelerated ageing where S’pore is among those top of the class.

Akan Datang: Why CPF Life payments will begin at 85

In CPF, Financial competency, Financial planning on 20/06/2018 at 11:00 am

This will happen because 85 is 2.4 years above the average S’porean life expectancy rate of 82.6 yrs.

Let me run readers thru the argument.

In CPF Life: How withdrawal age “moved” to 70, I explained how the CPF Life default age for receiving payments was raised to 70, while earlier in Why CPF annuity will begin at 75 I joked that Queen Jos was planning how to justify raising the age to 75.

Well Russia has an even better plan to screw the elderly. Russia today, S’pore tomorrow?

Russia recently proposed raising retirement age above the average life expectancy of Russian males (63 yrs)

Prime Minister Dmitry Medvedev proposed increasing the pension age for men from 60 to 65 years old, and increasing the pension age for women from 55 to 63 years old.

… with many pointing out on social media it would make retirement age higher than the average male life expectancy in Russia.

https://www.bbc.com/news/blogs-trending-44495136

In S’pore, according to govt data the average male life expectancy age is 80, the female life expectancy age is 86.1 and the average 82.6. Don’t ask me how the average is calculated.

Rounding the average up to 83, and learning from Russia, CPF Life payments will begin at 85, enabling the reserves to grow and grow because many male S’poreans will be dead before CPF Life payments begin.

Btw, remember if CPF Life plan dies, you die: not yr money.

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 …

(https://atans1.wordpress.com/2011/12/03/best-cpf-life-plan/)

 

 

 

 

CPF Life: How withdrawal age “moved” to 70/ Silence of the activists

In CPF, Financial competency, Financial planning on 12/06/2018 at 10:59 am
I was going to explain how the dastardly deed was done but when TRE republished
Red alert! Achtung! S’poreans approaching 65, a TRE reader gave the answer, saving me the need to explain.
Lye Khuen Way:

The CPF Board do send out letters to those approaching their cohort drawdown age.
For those borned in 1953, it’s their 64th Birthdays.

There after, I believe it is 65.

The sly way they put it, is to suggest that you could delay your drawdown and receive more per month.

That applies to both Minimum Sum Scheme or those who opted for CPF Life.

Those who instinctively do not want any delay might just chuck the letter and the forms aside.

That’s where the devils come in.
Tuck away in the middle of the FORM, is a line that tell you that if you didn’t indicate that you want to start your drawdown from age 64,or 65,the DEFAULT AGE is 70.

Yes, Age 70.

I happen to opt for the CPF Life and somehow my enhanced topup application had already stated I wanted my draw down to start from age 64.

If unsure, call, write or better still go down personally to any of the CPF offices. Note that the Main CPF Board office is closed on Saturdays.

(Emphasis)

In places like the UK, or US of A or Europe, this kind of action

Tuck away in the middle of the FORM, is a line that tell you that if you didn’t indicate that you want to start your drawdown from age 64,or 65,the DEFAULT AGE is 70.

is not acceptable. It’s not Christian, kosher or halal. It’s politically toxic, playing games this way.

Civil rights activists would be KPKBing and rightly so.

Here it’s par for the course.

Worse our ang moh tua kees don’t care. They don’t have to rely on CPF Life payouts. People like Kirsten Han got pa’s and ma’s money just like Harry’s children.

And juz as bad is the silence of the Oppo politicians. Nothing from the Wankers’ Party or from Goh Meng Seng (Silence of Goh Meng Seng) or Lim Tean (Where’s yr defamation video and jobs rally Lim Tean?) the two talk, sing song artistes.

All so rich. It’s a fact that Lim Tean rents a black and white bungalow costing $15,000 a month.

Red alert! Achtung! S’poreans approaching 65

In CPF, Financial competency, Financial planning on 08/06/2018 at 10:43 am

Responding to this Why CPF annuity will begin at 75 fat cat investor and ex-medical doctor “abc” said that

In case you didn’t know, the DEFAULT CPF Life payout age is now 70.

This is in the event you don’t get back to CPF before your 65th birthday.

I think this policy started (silently) in 2017.

I asked a financial planner if this assertion was right, and he said after checking with a colleague, “Yes”.

So if u want yr CPF Life payments to start at 65, tell CPF. Otherwise have to wait until 70: which will soon morph into 75 as I predicted.

As, I’m on the minimum sum and I’ll be checking to see if I have to give notice that I want my money from 65 onwards. Until I give CPF details of bank account where the money is to be paid into, I know the money will be rolled over but now I want to know if I don’t give them bank account details before I’m 65, will the payments start only when I’m 70.

Not at it really matters, I’ve not withdrawn any of my CPF monies.

Btw, anyone knows what happens if someone “opts” for payment to begin at 70, but dies between 65-70: will the estate lose “everything” i.e. the amountrs not paid out? If so better start receiving money at 65.

Why CPF annuity will begin at 75

In CPF on 02/06/2018 at 11:05 am

Trumpets pls. Sometime back I wrote Why CPF annuity will begin at 75? (Piece is reproduced below)

Well now

A tripartite workgroup will be set up to relook the Central Provident Fund (CPF) contribution rates for older workers and study the “relevance of retirement and re-employment age”, Manpower Minister Josephine Teo announced on Monday (May 28).

Speaking at the Ministry of Manpower’s annual workplan seminar, Mrs Teo — who took over the manpower portfolio this month — said the new Tripartite Workgroup on Older Workers will also look into ensuring fair treatment of mature employees at the workplace.

https://www.todayonline.com/singapore/cpf-contribution-rates-older-workers-relevance-retirement-age-be-reviewed-josephine-teo

Emphasis mine

Why CPF annuity will begin at 75?

By the early 2000s the state of health of American men aged 69, as reported by themselves, was as good as that of 60-year-olds in the 1970s; 70 really does seem to be the new 60.

Economist

So if liddat can work until 75 meh?

So if the PAP wants to raise the age when we can get our CPF annuities, it can quote the BBC and the Economist, its bible of Hard Truths for intellectual support.

In 1948 the average 65-year-old could expect to live 13.5 years.

People retiring now can expect to live much longer – 22.8 years.

If the trend continues as expected, today’s young people can expect to live into their early nineties.

Imagine the amount of money you spend on a pension is a pot of jam. Either you spread it far more thinly in future over more years – meaning a lower annual pension – or you are going to need a much bigger pot.

BBC

And

The Oxford English dictionary defines “old” as “having lived for a long time”. It illustrates the sense with an accompanying phrase, “the old man lay propped up on cushions”: the old person as one who has made all the useful contributions he can possibly make to society and is now at rest. When pensions were first introduced in Prussia, in the 1880s, this was probably a fair characterisation for anyone over 65. Not many people lived beyond this age; those who did were rarely in good health. But today many 65-year-olds are healthy and active. Donald Trump (71) may be many things, but old he is not, nor for that matter is Vladimir Putin (64), who qualifies for his bus pass in October. Yet governments and employers still treat 65 as a cliff’s edge beyond which people can be regarded as “old”: inactive, and an economic burden.

This is wrong, for three reasons. First, what “old” means is relative. Life expectancy has gone through the roof since Otto von Bismarck pioneered the Prussian welfare state. Today the average 65-year-old German can expect to live another 20 years. So can most people in other rich countries, meaning old age now arguably kicks in later than before. Second, the term carries an underlying implication about health, or at least fitness. But healthy-life expectancy has grown roughly in tandem with life expectancy; for many, 70 really is the new 60. Third, surveys show that the majority of younger over-65-year-olds increasingly want to stay actively involved in their communities and economies. Few want to retire in the literal sense of the word, which implies withdrawing from society as a whole. Many want to continue working but on different terms than before, asking for more flexibility and fewer hours.

https://www.economist.com/blogs/economist-explains/2017/07/economist-explains-7

Reason why CPF Life so mean?

In CPF, Financial competency on 01/11/2017 at 1:13 pm

Many moons ago after one Chris K wrote this about the meanness of CPF life because of the triple redundancy, I emailed his piece to an actuary and asked him if the piece made sense (there were some things that I couldn’t quite follow). He said it did, but added “Nothing wrong in being prudent”.

This PAPpy answer got me and, when I told him, Chris K annoyed.

But reading this one can understand the logic even if one disagrees with it.

IN 1965 ANDRÉ-FRANÇOIS RAFFRAY, a 47-year-old lawyer in southern France, made the deal of a lifetime. Charmed by an apartment in Arles, he persuaded the widow living there that if he paid her 2,500 francs (then about $500) a month until she died, she would leave it to him in her will. Since she was already 90, it seemed like a safe bet. Thirty years later Mr Raffray was dead and the widow, Jeanne Louise Calment, was still going strong. When she eventually passed away at 122, having become the world’s oldest person, the Raffray family had paid her more than twice the value of the house.

Underestimating how long someone will live can be costly, as overgenerous governments and indebted private pension schemes have been discovering. They are struggling to meet promises made in easier times. Public pensions are still the main source of income for the over-65s across the OECD, but there are big differences between countries (see chart). In both America and Britain public provision replaces around 40% of previous earnings, but in some European countries it can be 80% or more. Where it makes up a big share of total pension income, as in Italy, Portugal and Greece, a shrinking workforce will increasingly struggle to finance a bulging group of pensioners.

http://www.economist.com/news/special-report/21724751-lives-get-longer-financial-models-will-have-change-financing-longevity

When it comes to the future, it’s all about probabilities i.e. throwing dice. Even with all with the help of AI, data and acturial science, the future is still guess-work, not certainity.

The more “certainity” is asked for, the higher the cost. Here’s something I wrote in 2009: What price income protection? Or the cost of an annuity

So if one wants “certainty”, there’s a price to be paid. CPF Standard Plan offers that “certainity”. As I told someone sometime back, if you know you are going to live to 150, then opt for the Standard Plan , even if by conventional wisdom yardsticks it “sucks”. But remember even then if the plan dies, you also die: Diabetes: The real reason PM is worried?

Diabetes: The real reason PM is worried?

In CPF, Political governance, Public Administration on 31/10/2017 at 6:50 am

In his NatDay Rally speech he worried that 22% of the population will get diabetes (from the present 11%). Maybe he worried that if that happens, then CPF Life Standard Plan will be in trouble?

The Standard plan surely will go bust because the Standard plan covers until death and diabetics could live longer than those without diabetes. There’ll be a public backlash because of the “Fund go bankrupt, yr problem”.


CPF Life die, Yr 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 MS scheme, where account holders are legally entitled to the monies in their CPF accounts.

More details. Note that there are now only two plans, not the menu first offered. Of the two existing plans, the Standard Plan, is the less attractive one because there is a lot KS in favour of the annuity provider. Of course if u  are confident u’ll live to 150, opt for it. But u still got the worry of “Fund insolvent, yr problem”.


There will also be problems at the Basic Fund that pays out annuities until people reach 90 if everyone lives longer because they got diabetes. And there could be a lot more 90-year old destitute S’poreans who are unlikely to vote PAP.

Diabetics live longer

Seriously, PM’s NDP rally speech on diabetes reminded me of shumething I read last year from which I concluded that diabetics are likely to outlive those wihout it, if the diabetics manage to keep their diabetes under control. Diabetes cannot be cured in most cases, but it can be controlled.

So it’s a good thing to have because the medication also works to prevent cancer, heart disease or cognitive impairment.

Metformin, the most basic medicine prescribed for diabetes, seems is a miracle drug helping those with  cancer, heart disease or cognitive impairment.

There is already a candidate anti-ageing drug, a generic called  that has been widely used by diabetics around the world. It works to lower insulin levels in the blood and triggers a range of other molecular pathways that are likely to influence the ageing process. The way it works inside the cell is not completely understood but it is thought to favourably influence metabolic and cellular processes associated with the development of age-related conditions such as inflammation, autophagy (when broken bits of cell are recycled) and cell senescence (when they are unable to grow and divide any longer). In humans, those who take metformin seem to have improved risk factors for cardiovascular disease. Epidemiological work suggests that its use is associated with reduced incidence of cancer and mortality. There is some evidence it may reduce the risk of mild cognitive impairment.

Nir Barzilai of the Albert Einstein College of Medicine in New York wants to test the drug in thousands of people who already have, or are at risk of, cancer, heart disease or cognitive impairment.

http://www.economist.com/blogs/economist-explains/2016/08/economist-explains-8

ElderShield: KS, opacity at work

In CPF on 18/10/2017 at 5:54 am

There’s a big reduction in the premium for the my ElderShield renewal premium for 2017- 2018.

My usual premium is slightly more than $200, but I’m paying only $31 this time only because “ElderShield claims have been lower in the last 5 years of the scheme.”

What this means is that ElderShield people were too conservative in their projections. Btw, no other details given.

Reminds me of CPF Life. Kia sumism and opacity at work.

Will PM, tonite, give peace of mind on CPF Life Standard?

CPF Life payouts: Why liddat?/ Save and save

 

 

Old told homes are not ‘assets to pass on to offspring’

In CPF, Political governance, Public Administration on 14/10/2017 at 11:11 am

No not a PAP minister or MP telling S’poreans that yr HDB flat is not really yrs.

According to the UK’s media, the UK social care minister has suggested pensioners’ property is not “an asset to give to their off-spring” but could instead be sold to pay for their care needs.

Maybe she’s the kind of person, the PM should offer citizenship to and promise to fast track her into the cabinet? After all, the recent fiasco on what the AG advised the cabinet to do showed what a cock, Kee Chui Chan, one of candidates to be PM is.

Btw, we don’t have this problem In the Daily Mail newspaper, UK’s justice minister Phillip Lee warned that the UK is a “selfish” society where families shirk their duty by “outsourcing” the care of their elderly relatives.

Here we got laws to make sure that S’poreans, not the state, have to look after their elderly relatives, one reason why taxes here are “peanuts”.

Then there’s this:

But if you transfer your CPF to your parents’ or grandparents’ CPF, you could be solving a problem (their need for money) in a way that creates another problem (your retirement needs) worse. Ownself sabo ownself.

Worse the PAP administration will be laughing all the way to the bank if yr parents or grandparents die earlier than expected and they are on CPL Life, not the old CPF Retirement Sum Scheme. The bequest should be much lower compared to if they opted-in to CPF Life.

CPF changes: Rob Peter to Pay Paul and worse

CPF changes: Rob Peter to Pay Paul and worse

In CPF on 10/10/2017 at 4:43 am

When I read earlier this month about the changes proposed to make it easier to transfer CPF payments to parents or grandparents in the constructive, nation-building media,  I tot of the old English saying “Rob Peter to Pay Paul”.


Rob Peter to Pay Paul

To use resources that legitimately belong to or are needed by one party in order to satisfy a legitimate need of another party, especially within the same organization or group; to solve a problem in a way that makes another problem worse, producing no net gain.

https://en.wiktionary.org/wiki/rob_Peter_to_pay_Paul

———————————————–

To recap, changes to the Central Provident Fund (CPF) Act have been proposed to lower the minimum amount that members must have in their own CPF accounts before making transfers to their parents or grandparents.

At present, CPF members must have the prevailing Full Retirement Sum – which is $166,000 for CPF members aged 55 this year – before they can transfer extra savings to their parents’ or grandparents’ accounts. Members aged above 55 need to meet the retirement sum specified for their cohort.

The changes proposed by the Ministry of Manpower (MoM) will allow CPF members to make such transfers if they have at least the Basic Retirement Sum – which is half the full sum – and a sufficient property pledge or charge to make up the rest of the full sum.

But if you transfer your CPF to your parents’ or grandparents’ CPF, you could be solving a problem (their need for money) in a way that creates another problem (your retirement needs) worse. Ownself sabo ownself.

Worse the PAP administration will be laughing all the way to the bank if yr parents or grandparents die earlier than expected and they are on CPL Life, not the old CPF Retirement Sum Scheme. The bequest should be much lower compared to if they opted-in to CPF Life.

Uncle Leong explained it well in a TRE article:

Since the minimum amount that you need to keep in your own CPF, in order to do the transfer has been reduced from $166,000 to $83,000 if you are able to pledge say your HDB flat – with the recent confirmation that the value of HDB flats may decline to zero at the end of the 99-year lease – will you have enough for your own retirement?

Whilst you may be tempted to top-up your parents and/or grandparents’ CPF because as long as they are age 65 and over – they can immediately take monthly payouts.

This is akin to turning your own CPF to cash which your parents/grandparents can use, and arguably your cashflows may improve because you may not need to give them as much cash as you are doing now.

However, under the old CPF Retirement Sum Scheme (RSS) – the monthly payout that your parents/grandparents may be able to withdraw, may be much lesser than if they opt-in to the CPF Life Scheme.

However, the downside may be that if they die early – like within the next five to 20 years – the bequest may be much lower compared to if they had not opted-in to CPF Life.

Let me illustrate this with an example.

If you transfer $123,000 to your mother who is age 65 (date of birth 1.9.1952) – the CPF Life Estimator calculator shows a monthly payout of $654 – $691 and very low bequests of $40,658 – $45,124 at age 75 and $0 – $5,859 at age 80 under the Standard Plan, compared to getting the actual balance in your Retirement Account upon death under the old RSS.

In contrast to the very low bequests under CPF Life above – the actual balance upon death under the old RSS is estimated to be $93,851, $73,272 and $47,254, at age 75, 80 and 85, respectively.

 

Why CPF annuity will begin at 75?

In CPF on 25/08/2017 at 4:24 am

By the early 2000s the state of health of American men aged 69, as reported by themselves, was as good as that of 60-year-olds in the 1970s; 70 really does seem to be the new 60.

Economist

So if liddat can work until 75 meh?

So if the PAP wants to raise the age when we can get our CPF annuities, it can quote the BBC and the Economist, its bible of Hard Truths for intellectual support.

In 1948 the average 65-year-old could expect to live 13.5 years.

People retiring now can expect to live much longer – 22.8 years.

If the trend continues as expected, today’s young people can expect to live into their early nineties.

Imagine the amount of money you spend on a pension is a pot of jam. Either you spread it far more thinly in future over more years – meaning a lower annual pension – or you are going to need a much bigger pot.

BBC

And

The Oxford English dictionary defines “old” as “having lived for a long time”. It illustrates the sense with an accompanying phrase, “the old man lay propped up on cushions”: the old person as one who has made all the useful contributions he can possibly make to society and is now at rest. When pensions were first introduced in Prussia, in the 1880s, this was probably a fair characterisation for anyone over 65. Not many people lived beyond this age; those who did were rarely in good health. But today many 65-year-olds are healthy and active. Donald Trump (71) may be many things, but old he is not, nor for that matter is Vladimir Putin (64), who qualifies for his bus pass in October. Yet governments and employers still treat 65 as a cliff’s edge beyond which people can be regarded as “old”: inactive, and an economic burden.

This is wrong, for three reasons. First, what “old” means is relative. Life expectancy has gone through the roof since Otto von Bismarck pioneered the Prussian welfare state. Today the average 65-year-old German can expect to live another 20 years. So can most people in other rich countries, meaning old age now arguably kicks in later than before. Second, the term carries an underlying implication about health, or at least fitness. But healthy-life expectancy has grown roughly in tandem with life expectancy; for many, 70 really is the new 60. Third, surveys show that the majority of younger over-65-year-olds increasingly want to stay actively involved in their communities and economies. Few want to retire in the literal sense of the word, which implies withdrawing from society as a whole. Many want to continue working but on different terms than before, asking for more flexibility and fewer hours.

https://www.economist.com/blogs/economist-explains/2017/07/economist-explains-7

Talking cock about Return Our CPF

In CPF, GIC, Temasek on 04/06/2017 at 10:27 am

Cybernuts, from Mad Dog Chee to Philip Ang, regularly point out GIC’s and Temasek’s “losses” as evidence for the real reason why the PAP administration intriduced the “Minimum sum” scheme and CPF Life: Temasek, GIC lost money, resulting in a shortfall of funds if CPF can be withdrawn at 55.

I’ll quote two of the heloos of the cybernuts to show that the state can refund everyone’s outstanding CPF balance.

Uncle Leong, of fake analysis fame, points out

Amount due to CPF members is $324.2 billion

According to the Department of Statistics’ Monthly Digest of Statistics – the Amount Due to (CPF) Members is $324.2 billion as of October, 2016.

(Yes I double checked to confirm that he wasn’t faking this.)

So does state have the $ to refund $325bn ++?

Chris K (no cybernut and an unwilling hero of the cybernuts) recently pointed out on FB that looking at reserves as unencumbered assets – i.e. assets minus liabilities or net assets, a term used by Tharman and in the constitution when calculating the net investment return contribution, the ball park numbers are

MAS: $40bn,

Temasek: $220bn,

GIC: $290bn

And this excludes the past reserves still sitting in the various Fifth Schedule entities like EDB and etc LTA.

Still think got no money to repay yr CPF?

So in an alternative universe when Dr Chee becomes PM later today, with a two-thirds majority in parly, he can tell president Yaacob to allow him to draw on the reserves and return our CPF. He will tell President Halimah

I have the mandate of the people. What do u have? How many S’poreans voted for u? None because u won by default.”

Sign or I’ll pee on u and let the mob into the Istana.

 

She signs and when everyone gets their money back, the lies the cybernuts tell will be exposed.

 

CPF Life: False alarm that Std is now better than Basic

In CPF, Financial competency, Financial planning on 08/05/2017 at 5:19 am

Here I reported that a far cat rentier (once a doctor) says that the Standard could now be better given “tweaks” over the yrs that were not made public

I said I’d asked an expert to check.

He hasn’t responded but Chris Kuan while no financial planner but a now an ex-capital markets guy who I quoted here a few yrs ago as saying that punters should opt for the Basic not the Standard plan did some calculations.

Juz spreadsheet up the present MS of 166k compounding at 4% with 1st 60k extra 1% and 1st 30k additional 1%. Then use the 1.28k per month payout from 65 onwards on a ror of 4.25%. The Standard Plan break even age remains at 89 where it was when I did the same calc a couple of years back. So I was wrong – nothing has changed. The difficulty in assessing the Basic and Standard Plan is while we know that at age 85 there is no more bequest under the Standard Plan and there is under the Basic Plan but what we don’t know is at what age does the bequest actually cease under both plans.

So “Basic good, Standard bad” still stands.

Achtung: Default Standard CPF Life might be the better one

In CPF, Financial competency, Financial planning on 05/05/2017 at 11:30 am

Not the Basic one.

But really who knows, if the PAP administration decides to make “tweaks” that are not made public?

This blog and others has alwats argued that punters should opt for the Basic not the Standard plan. 

A reader (smart guy, trained as MD) now says that the Standard could now be better given “tweaks” over the yrsthat were not made public. I’ve asked an expert to try to confirm or deny the validity of the claim.

Meanwhile what this doctor (now fat cat rentier) says is the truth, the absolute truth: the PAP can suka suka “tweak” things in private and change the facts:

[Lease Buyback Scheme]  suffers from the same problem as CPF Life — opaque internal workings & computations and subject to unannounced changes in computations & internal assumptions. E.g. CPF Life internal annuity calculations have changed a couple of times since it launched — the monthly payouts as calculated by the CPF Life calculator has changed even with same parameters in just a few short years. Previously, the Basic CPF Life option was the better no-brainer choice. Now the default Standard CPF Life is arguably better with a significantly higher quantum in monthly payouts. Imagine those old folks that took up the Basic plan earlier…

So rather focus on the “Marxist detainees” and their unhappiness, those opposed to the PAP should focus on rice-and-veggies issues. But then they look down on those who can afford only these basic Asian foods.

CPF Life: Increasing the pot the PAP way

In CPF on 10/04/2017 at 2:08 pm

Maybe the PAP administration might want to do what the Brits did in increasing the m0rtality rate so lightening the burden on the state to provide pensions.

As CPF Life “beneficiaries” are pooled into either the standard or basic schemes, the more people die earlier than expected in each pool, better for the others in the pool and no need for the state to step in: fund no money, yr problem not PAP administration’s problem.

Seriously, I’m surprised the cybernuts from TRELand or Mad Dog Chee have not accused the PAP administration of using SingHealth to kill off S’poreans

A flu jab blunder that contributed to the largest increase in deaths in a generation may have brought unexpected benefits for Britain’s pensions black hole, according to the Daily Telegraph.

The Institute and Faculty of Actuaries says the increase in the mortality rate in 2016 – when the flu jab was mismatched for the main strain of influenza – has slightly reduced overall life expectancy for the over-65s.

Experts say the shift has removed about £28bn of pension liabilities from the balance sheets of leading companies.AP

 

 

Restructuring CPF so that the money never runs out before death

In CPF, Humour on 04/10/2016 at 5:54 am

 

From FT

The above made me think that if the PAPpies are really that smart (as they say there are), and evil (as the cybernuts say they are) CPF should be restructured so that a S’porean will be allowed to live for as long as there is money in his or her account. When the annuity stops because there is no more money left in the account, the S’porean like Boxer gets send to the slaughter-house.

It’s a more sophisticated (albeit more in line with Harry’s thuggish ways of using his hatchet) version of what I’ve suggested before: that if the PAP is really pragmatic it would follow the solution in  the movie Soylent Green. Us plebs are encouraged to move on and our bodies then made into food for the other plebs.

See http://www.imdb.com/title/tt0070723/synopsis

 

 

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

in http://www.providend.com/can-we-retire-in-singapore/.

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 https://www.youtube.com/watch?v=BbyYr6L5xQM

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 …

(https://atans1.wordpress.com/2011/12/03/best-cpf-life-plan/)

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.

https://atans1.wordpress.com/2014/06/03/cpf-life-what-sucks-which-is-closest-to-minimum-sum-scheme/

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

SINGAPOREANS AMONG TOP SAVERS, INVESTORS IN THE WORLD

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.”

CPF: B in global rating is wrong/ Ang mohs sotong on CPF Life

In CPF, Financial competency on 14/07/2015 at 4:49 am

Actually we should be in C or D not B.

When we were upgraded to B from C in 2013, the constructive, nation-building BT reported: The Republic has moved up sharply in the latest Melbourne Mercer Global Pension Index rankings, placing its Central Provident Fund (CPF) among the top 10 retirement-income systems in the world.

Singapore jumped from 13th to seventh spot, with its overall index value at 66.5 this year, up from 54.8 last year.

Although the Republic moved up a grade – from C to B – Mercer said the CPF system has room for improvement in some aspects “that differentiate it from an A-grade system”, although it had a sound structure and many good features.

The 20 countries in the rankings were scored in three key areas: adequacy, sustainability and integrity.

Denmark, the Netherlands and Australia held onto their top three spots. Denmark, the first country to achieve an A grade last year, maintained it this year, despite its overall score falling to 80.2 from 82.9.

Mercer said: “Denmark’s well-funded pension system with its high level of assets and contributions, the provision of adequate benefits and a private pension system with developed regulations, are the primary reasons for its top spot.”

Singapore’s B grade puts it in the company of other highly developed countries such as Germany, the US and France.

Mercer said the Republic’s overall index rose mainly because the Organisation for Economic Co-operation and Development (OECD) revised its approach to recognise the CPF’s three separate accounts, instead of just its retirement account.

The OECD also updated its data on private pension coverage.

http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid=412758763-19361-922318696

Obviously Mercer and the OECD don’t realise how CPF Life is structured. It sucks as this piece explains why https://atans1.wordpress.com/2014/08/17/will-pm-tonite-give-peace-of-mind-on-cpf-life-standard/ (Warning I quote some chim analysis which is no BS like Roy’s analysis).

We get screwed even though it’s our own money that’s funding our retirement.

Because as Chris K (writes for TRE but is no cybernut) one of the persons I quoted in above link concludes: The writer does not accuse the government of deliberately profiting from the financial risks of longevity.  However, the triple provision, triple redundancy or in the strictly local parlance “kiasu, kiasi, kiabo” of absolutely ensuring not a single cent is spent on retirement funding, can only mean that there will be excess money left from CPF LIFE which reverts back to the government.

Some may call this conservative financial management but there is a very thin line between such conservative financial management and indolent financial management which arises from coercion and monopoly over retirement savings. Undoubtedly, the usual price of not getting more from their retirement funds is paid by you and me.

(My emphasis)

Btw, an FT actuary tells me that Chris K argument is financially sound.

 

Dutch Pension Plan

In CPF, Financial competency on 20/11/2014 at 1:49 pm

LESSONS FROM THE DUTCH PENSION PLAN “Imagine a place where pensions were not an ever-deepening quagmire, where the numbers told the whole story and where workers could count on a decent retirement,” Mary Williams Walsh writes in The New York Times. “Imagine a place where regulators existed to make sure everyone followed the rules,” she adds. “That place might just be the Netherlands …”. The Dutch system rests on the idea that each generation should pay its own costs ‒ and that the costs must be measured accurately if that is to happen.

Going Dutch isn’t easy, and it is quite expensive. There are also elements of the plan that may seem too socialist for American tastes.

Will PM, tonite, give peace of mind on CPF Life Standard?

In CPF, Financial competency on 17/08/2014 at 4:26 am

(Or “Numbers don’t lie — the CPF default plan, is awfully bad“)

I doubt it. [Update on 18 August 4.30am: He didn’t touch on it. If S’poreans bitch, bleat, kpkb maybe he’ll fix it in next yr’s NatDay Rally speech. Remember GE coming.]

Further to my non-quantative rant on CPF Life, two number-crunchers have worked out how nasty and expensive the standard CPF Life plan is. I’m surprised that Roy Ngerng has not got round to calling this “criminal misappropriation” yet. Probably, he is waiting for Uncle Leong to explain the numbers to him. Roy may be gd with words, but he is worse than me when it comes to quantitative finance, let alone basic maths and stats. At least he wasn’t in finance. (Btw, I would like to point out to Woody Goh that a gd parent would not have devised such a unfair default standard plan, or CPF Life in general. Btw2, since when has govt become our parents? Juz because PAP been in power since 1959, doesn’t mean it has become our parents.  Even the CCP doesn’t regard itself as the parents of China. Woody Goh, we are not living in N Korea. You’ve been reading the ST, I assume.)

Seriously, a financial planner, who is no second hand car or life insurance salesman, in a tie,  told me, “Someone asked me, why is the default option the worse one? I told him, yah that’s precisely why its the default option” when he sent me this link showing how
bad the standard plan is: http://www.ifa.sg/cpf-life-standard-is-the-worst/ (Warning very chim).
The author concludes, I speculate that the ‘poor’ returns of CPF Life Standard is due to the fact that all of the CPF RA is being invested into the common insurance pool while only a small amount of CPF RA under CPF Life Basic goes to the insurance common pool. The seemingly poor return is probably due to the ‘penalty’ of early exit from the pool in order to help subsidise the remaining in the pool who live too long. This is how insurance works through risk pooling. Unfortunately, we do not know whether this risk pooling is efficient as there is no further benefit illustration available.

Nevertheless, the present values gap between CPF Life Standard and CPF Life Basic is too large to ignore. It is difficult to determine what are the ‘fine prints’ for such a large discrepancy between CPF Life Basic and CPF Life Standard as there is no policy contract available unlike a traditional annuity plan available from private insurance company.

(my emphasis)

In TRE, someone working in finance posted this less technical explanation, coming to the same result:

Here is a comparison between the default CPF Life Standard Plan payout for the writer meeting the minimum sum of $155,000 and the example of Mr. Tan in the CPF Life Handbook, who has $100,000, below the minimum sum, property pledge required. The writer’s payout is derived from the CPF Life Estimator. Mr. Tan’s given in the handbook. The assumed investment rate is 3.75%, the low end of the assumed investment rates for CPF LIFE.

  Chris K Mr. Tan
RA at 55 155,000 100,000
Monthly Payout from 65      1,215        822
Bequest at 65 187,263 108,505
Bequest at 75   41,829   11,909
Bequest at 85             0             0

At 55, CPF deduct half the minimum sum, $77,500 the first premium instalment from both the writer and Mr. Tan. The remainder of both RAs earned 4% with an extra 1% on first $60,000. This will be on combined balance, including the first premium which earned rate of 3.75%. At age 65, the remaining RA pays for the second premium instalment. The writer calculates the accumulated capital at age 65 and then amortised against the CPF Life estimated payout. Here are the numbers (CPF does not reveal its calculation so the writer use the default common sense approach)

  Chris K Mr. Tan
RA at 55 155,000 100,000
Monthly Payout from 65     1,215        822
Accumulated Capital at 65 225,453 147,171
Residual Capital at 65 225,453 147,171
Residual Capital at 75 149,529   93,412
Residual Capital at 85   39,689   15,638
Capital depletion age 88 years old 86.75 years old

The first thing that jumps out is the disparity between the estimated bequests and the residual capital after drawing the monthly payouts.  At age 65, without a single payout, the bequest is $187,263 against accumulated capital of $225,453. As an annuity plan, the difference can be explained as those who expired earlier providing the reserves for those who lived longer on the basis of risk pooling.

However, the next thing that jumps out is the capital depletion age which is when the accumulated capital is completely drawn down: 88 years for the writer and 86.75 years for Mr Tan, both well in excess of the 82-83 years life expectancy. The government in effect made triple provisions for those who lived beyond the life expectancy:

1) the excess over the bequests of those who expired earlier

2) stretch the monthly payout well beyond life expectancy and

3) to a smaller extent having those who met the minimum sum compensate those who did not, which then begs the question why should anyone want to meet the minimum sum.

If that is not enough, legislation has been provided to wind up CPF LIFE in case the Plans are insolvent.

The Basic Plan

To avoid a long article, the writer provides a brief summary of the Basic Plan which is predicated on drawing most of the monthly payout from the RA while the annuity only kicks in at age 90. As such, the Basic Plan provides a larger bequest from the RA and over a longer time frame but with lower monthly payout compared to the Standard Plan.

At age 55, the first CPF Life premium instalment equal to 10% of the respective RA is deducted. At age 65, the second instalment equal of 10% of the accumulated RA balance is deducted. The writer draws $1,098 per month from his RA as the payout under the Basic Plan while Mr. Tan draws $737. At the age of 90, the remaining balances in the RAs will be completely depleted. Then, the CPF Life annuities start providing their respective payouts. If both expire before age 90, here is the unused accumulated capital in their respective CPF LIFE annuities and if they live, the capital depletion age.

  Chris K Mr. Tan
Annuity accumulated capital at 90 86,384 61,896
Annuity capital depletion age 96.75 years old 95.5 years old

When the government said a third of Singaporeans who are 65 today will live beyond 90, then two thirds of them will not see a single cent paid from the CPF LIFE annuity. Again the government has built in triple provisions 1) the payout from the RA is stretched well over life expectancy 2) annuities kicking in well beyond life expectancy, guaranteeing massive reserves to pay for those who live beyond 95 3) to a smaller extend, those who meet the minimum sum mitigating those who do not.

Conclusion

The writer does not accuse the government of deliberately profiting from the financial risks of longevity.  However, the triple provision, triple redundancy or in the strictly local parlance “kiasu, kiasi, kiabo” of absolutely ensuring not a single cent is spent on retirement funding, can only mean that there will be excess money left from CPF LIFE which reverts back to the government.

Some may call this conservative financial management but there is a very thin line between such conservative financial management and indolent financial management which arises from coercion and monopoly over retirement savings. Undoubtedly, the usual price of not getting more from their retirement funds is paid by you and me.

(My emphasis)

Chris K

* Chris K holds a senior position in a global financial centre bigger than Singapore. He writes mostly on economic and financial matters to highlight misconceptions of economic policy in Singapore.

Fyi, I was lucky enough to be under the old system and I didn’t opt for any of these plans. If I live too long, I’d die financially if the CPF was all I had. The good concept but as usual messed up by the PAP govt in its meanness: 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.

CPF: PAP govt recycles hot air, smoke again/ All part of the wayang to diastract us?

In CPF, Political governance on 30/07/2014 at 4:35 am

Deputy Prime Minister Tharman Shanmugaratnam said earlier this week that the government would explore the option of private pension plans for the CPF for those who are able to take higher risk. But he also warned that private pensions “will not be a walk in the park”, as higher risk did not always translate into higher returns. (BT 24 July)

Here we go again. Time for civil servants and fund manager marketers to reopen their files from the early noughties.

As BT reported, Industry anticipation of the prospect of private pension plans for the CPF was intense in 2004. Such plans were mooted as a means to enhance returns and lower costs for CPF members.

Private pension plans were envisioned as balanced or mixed-asset portfolios which would be farmed out to the private sector to be managed on an institutional basis. The ideal scenario was that there would be no sales charge, and annual fees would be reduced to a fraction of the prevailing fees … In 2004, estimates of the fund size needed for an expense ratio of 50-75 basis points ranged from S$200-300 million to as much as S$1 billion*.

In 2007, the government said the CPF’s “risk-free” structure would be retained because the majority of members did not have large balances and because private pension funds would be “too risky for older members”.

That was the decision then.

Now in 2014, Tharman is raising the issue again? Now the rich can have private pensions, he says? Hello, why didn’t that happen in 2007? It was dismissed out of hand apparently on the ground that the rules had to be the same for everyone in the scheme.

Is the govt trying to distract us from the real issues of the day that can cause it problems as it spends our money on ourselves in trying to buy our votes: Minimum Sum calculations, how CPF Life funds are invested and is it that safe, and Medisave, Medishield flaws that show up the govt’s incompetency or meanness. One of these days, I’ll blog on what actuaries say about Medishield’s proposed buffer reserves: they agree with WP’s GG rather Gan and Puthu. Remember the higher the reserves, the larger the premiums paid.

Roy Ngerng’s “revelations”** and PM’s law suit distract S’poreans from these impt issues. Sadly, new media ais ana abets unwittingly the govt’s wayang. And now there is more smoke from Tharman.

Whatever leh, govt’s attitude on private pensions, and “tweaking” the CPF system reminds me of Charles Dicken’s description of the Circumlocution Office in Little Dorrit.

It describes the govt procrastinating over everything. It also can be seen as a reproach to the government that whatever it does the results are just empty words. And our govt dares call cyberspace “noise” given its track record on private pension plans?

The Circumlocution Office was (as everybody knows without being told) the most important Department under Government. No public business of any kind could possibly be done at any time without the acquiescence of the Circumlocution Office. Its finger was in the largest public pie, and in the smallest public tart. It was equally impossible to do the plainest right and to undo the plainest wrong without the express authority of the Circumlocution Office. If another Gunpowder Plot had been discovered half an hour before the lighting of the match, nobody would have been justified in saving the parliament until there had been half a score of boards, half a bushel of minutes, several sacks of official memoranda, and a family-vault full of ungrammatical correspondence, on the part of the Circumlocution Office.

This glorious establishment had been early in the field, when the one sublime principle involving the difficult art of governing a country, was first distinctly revealed to statesmen. It had been foremost to study that bright revelation and to carry its shining influence through the whole of the official proceedings. Whatever was required to be done, the Circumlocution Office was beforehand with all the public departments in the art of perceiving — HOW NOT TO DO IT.

Through this delicate perception, through the tact with which it invariably seized it, and through the genius with which it always acted on it, the Circumlocution Office had risen to overtop all the public departments; and the public condition had risen to be — what it was.

It is true that How not to do it was the great study and object of all public departments and professional politicians all round the Circumlocution Office. It is true that every new premier and every new government, coming in because they had upheld a certain thing as necessary to be done, were no sooner come in than they applied their utmost faculties to discovering How not to do it. It is true that from the moment when a general election was over, every returned man who had been raving on hustings because it hadn’t been done, and who had been asking the friends of the honourable gentleman in the opposite interest on pain of impeachment to tell him why it hadn’t been done, and who had been asserting that it must be done, and who had been pledging himself that it should be done, began to devise, How it was not to be done. It is true that the debates of both Houses of Parliament the whole session through, uniformly tended to the protracted deliberation, How not to do it. It is true that the royal speech at the opening of such session virtually said, My lords and gentlemen, you have a considerable stroke of work to do, and you will please to retire to your respective chambers, and discuss, How not to do it. It is true that the royal speech, at the close of such session, virtually said, My lords and gentlemen, you have through several laborious months been considering with great loyalty and patriotism, How not to do it, and you have found out; and with the blessing of Providence upon the harvest (natural, not political), I now dismiss you. All this is true, but the Circumlocution Office went beyond it.

Because the Circumlocution Office went on mechanically, every day, keeping this wonderful, all-sufficient wheel of statesmanship, How not to do it, in motion. Because the Circumlocution Office was down upon any ill-advised public servant who was going to do it, or who appeared to be by any surprising accident in remote danger of doing it, with a minute, and a memorandum, and a letter of instructions that extinguished him. It was this spirit of national efficiency in the Circumlocution Office that had gradually led to its having something to do with everything. Mechanicians, natural philosophers, soldiers, sailors, petitioners, memorialists, people with grievances, people who wanted to prevent grievances, people who wanted to redress grievances, jobbing people, jobbed people, people who couldn’t get rewarded for merit, and people who couldn’t get punished for demerit, were all indiscriminately tucked up under the foolscap paper of the Circumlocution Office.

Numbers of people were lost in the Circumlocution Office. Unfortunates with wrongs, or with projects for the general welfare (and they had better have had wrongs at first, than have taken that bitter English recipe for certainly getting them), who in slow lapse of time and agony had passed safely through other public departments; who, according to rule, had been bullied in this, over-reached by that, and evaded by the other; got referred at last to the Circumlocution Office, and never reappeared in the light of day. Boards sat upon them, secretaries minuted upon them, commissioners gabbled about them, clerks registered, entered, checked, and ticked them off, and they melted away. In short, all the business of the country went through the Circumlocution Office, except the business that never came out of it; and its name was Legion.

Sometimes, angry spirits attacked the Circumlocution Office. Sometimes, parliamentary questions were asked about it, and even parliamentary motions made or threatened about it by demagogues so low and ignorant as to hold that the real recipe of government was, How to do it. Then would the noble lord, or right honourable gentleman, in whose department it was to defend the Circumlocution Office, put an orange in his pocket, and make a regular field-day of the occasion. Then would he come down to that house with a slap upon the table, and meet the honourable gentleman foot to foot. Then would he be there to tell that honourable gentleman that the Circumlocution Office not only was blameless in this matter, but was commendable in this matter, was extollable to the skies in this matter. Then would he be there to tell that honourable gentleman that, although the Circumlocution Office was invariably right and wholly right, it never was so right as in this matter. Then would he be there to tell that honourable gentleman that it would have been more to his honour, more to his credit, more to his good taste, more to his good sense, more to half the dictionary of commonplaces, if he had left the Circumlocution Office alone, and never approached this matter. Then would he keep one eye upon a coach or crammer from the Circumlocution Office sitting below the bar, and smash the honourable gentleman with the Circumlocution Office account of this matter. And although one of two things always happened; namely, either that the Circumlocution Office had nothing to say and said it, or that it had something to say of which the noble lord, or right honourable gentleman, blundered one half and forgot the other; the Circumlocution Office was always voted immaculate by an accommodating majority.

Such a nursery of statesmen had the Department become in virtue of a long career of this nature, that several solemn lords had attained the reputation of being quite unearthly prodigies of business, solely from having practised, How not to do it, as the head of the Circumlocution Office. As to the minor priests and acolytes of that temple, the result of all this was that they stood divided into two classes, and, down to the junior messenger, either believed in the Circumlocution Office as a heaven-born institution that had an absolute right to do whatever it liked; or took refuge in total infidelity, and considered it a flagrant nuisance.

——-

*Background facts about CPF

Data compiled by Morningstar shows that there are funds which handily beat the CPF rates. Aberdeen’s Pacific Equity Fund, for example, generated annualised returns of 4.6 per cent over three years; 13.8 per cent over five years; and 13.5 per cent over 10 years. The maximum loss and volatility over the periods were in double digits, however.

As at March 2014, there was S$259.5 billion in total members’ balances in the CPF. The Ordinary Account (OA) accounted for S$100.7 billion and another S$62.8 billion sat in the Special Account (SA).

In terms of participation in the CPF Investment Scheme, S$20.7 billion of OA funds were invested, and S$5.7 billion of SA funds.

**Uncle Leong (Roy’s sifu) has been telling S’poreans for years what Roy has discovered. The only thing that Roy did different was to accuse the govt of “stealing” our CPF, something that he has repented of:

I recognise that the Article means and is understood to mean that Mr Lee Hsien Loong, the Prime Minister of Singapore and Chairman of GIC, is guilty of criminal misappropriation of the monies paid by Singaporeans to the Central Provident Fund.

3.I admit and acknowledge that this allegation is false and completely without foundation.

4.I unreservedly apologise to Mr Lee Hsien Loong for the distress and embarrassment caused to him by this allegation.

 

 

 

CPF Life: Shumething for “Free my CPF” protestors, anti-PAP cyber warriors to reflect on

In CPF, Financial competency, Financial planning on 24/06/2014 at 4:50 am

The OECD has criticised the UK government’s recently announced plans to end the obligation to buy an annuity at retirement.
Anyone aged 55 or over will be able to take their entire pensions savings pot as cash from next April instead of buying an annuity that would guarantee an income for life.

Pablo Antolin, chief economist and head of the OECD’s private pensions unit, said he was concerned the UK government’s proposals would lead to pensioners running out of money in old age.
“An annuity is the only instrument that provides complete protection in retirement and which safeguards individuals against the danger that they exhaust their savings before death,” he said.

Mr Antolin said the proposed UK reforms were driven by the high costs of buying an annuity, but he argued that savers were unlikely to achieve better incomes in retirement simply as a result of scrapping mandatory annuitisation.
Mr Antolin is expected to say at the Investment Innovation & the Global Future of Retirement conference in New York on Monday that partial annuitisation should be encouraged as an integral part of direct contribution retirement plans offered to savers across the OECD.

 With investors likely to be faced with an environment of low yields and low investment returns for some time, the only way to ensure adequate income in retirement is for workers to save more for longer, said Mr Antolin.

He also criticised private pension providers for marketing annuities as investments, rather than insurance products.

“Buying fire insurance is not an investment. That is how an annuity needs to be looked at, as insurance against outliving one’s resources,” he said.

The above was reported by FT on Monday. Apologies to FT for such a long extract. But it’s for a noble cause, educating S’poreans and showing that the PAP govt has conventional wisdom on its side, on this issue as on the immigration and growth issues.

But as one totful reader pointed out, the ministers expect million-dollar salaries to follow conventional wisdom?

Related article: https://atans1.wordpress.com/2014/06/03/cpf-life-what-sucks-which-is-closest-to-minimum-sum-scheme/

I’ll end with a constructive suggestion to those TRE posters who keep posting there that I’m a PAP, WP, ISD mole whenever TRE republishes something of mine (got three pieces there now). Rather than getting frus and abusive, why don’t they start a petition asking TRE not republish me. I have no issues about not appearing there. Let the readers decide.

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 http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid=838399526-20200-2041240930.

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 …

(https://atans1.wordpress.com/2011/12/03/best-cpf-life-plan/)

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: https://atans1.wordpress.com/2011/12/03/best-cpf-life-plan/

CPF Life: What sucks/ Which is closest to Minimum Sum scheme

In CPF, Financial competency, Financial planning on 03/06/2014 at 5:25 am

The CPF system is in the news what with the President’s Address, which had hinted at further tweaks to the CPF system to enhance the retirement adequacy of Singaporeans, and Roy Ngegng’s claims* that the CPF system amounts to theft, something I’ve pointed out even before the PM threatened to sue him for defamation. Now we have an expert on Orchard Rd being sovereign territory where Pinoys cannot trespass, writing on the topic.

Well I never tot all this would happen when a  long time ago, I’ve blogged on the flaws in CPF Life.

Black box/ No benefits illustration

Various people (self included, a retired senior bank executive, and a scholar working in a GLC ) who have the choice of choosing between the CPF Life Plans and the Minum sum S scheme, have opted for the latter because the CPF Life Plans’ calculations are in a black-box. As a financial planner pointed out, “The CPF Life Plans come without a benefits illustration, something the law requires insurance agents and financial planners to show life insurance buyers”. The plans could be better, but we just don’t know.

(https://atans1.wordpress.com/2011/12/03/best-cpf-life-plan/)

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 …

(https://atans1.wordpress.com/2011/12/03/best-cpf-life-plan/)

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.

BTW, the above link analyses which CPF Life Plan is closest to the Minimum Sum scheme in terms of payouts. It’s the basic plan which is a deferred annuity plan.

And here’s a constructive, nation-building way of using yr CPF (if you disagree with Roy Ngerng that CPF is theft by govt). Using yr CPF account as a savings account https://atans1.wordpress.com/2011/12/05/using-yr-cpf-oa-as-a-savings-account/. I’m sure Roy can get for his parents better rates than the 4% and 2.5% available from CPF , but I can’t. So i leave my surplus cash with the CPF Board.

——-

*Here’s what an ex senior EDB man with progressive tendencies posted on Facebook: My impression is that quite a number of us have learned to avoid sharing stuff by sites such as STOMP, Heart Truths, and TRS after having been embarrassed by their ridiculous accusations afterwards (myself included). I think that these fringe views have actually caused serious readers to become more discerning.
To take legal action, as this post points out, is double edged. Ironically, it confers a certain ‘legitimacy’. I used to take bus 36 to work, and an obviously mentally ill man would get on around Esplanade. He would complain loudly about many of our politicians and mutter to himself his plan to deal with them. Most people avoided eye contact. I always just tried to get off the bus without provoking him further. Nobody ever tried to debate him.

Roy’s thesis that the govt steals our CPF is an example of para-facts, nuggets of pseudo-truth, edited, wrenched from context, or simply invented from whole cloth. People like Uncle Leong (and self) have described how the CPF system works long before Roy did.

I once even wrote wrote, One noted local economist has said that the government is effectively pocketing the difference between the returns it gets from investing abroad and the returns it pays on our CPF accounts: a carry trade arbitrage. Borrow low and invest for higher returns. https://atans1.wordpress.com/2010/11/02/how-we-fund-our-swfs/ He never got sued even though it was said publicly.