Monday, August 25, 2014

Be transparent with CPF

I'm a little too sick (vomit) listening to people saying that CPF should be made "more open and transparent". Wah lau, most of us can't even understand our credit card, debit card, bank, insurance (and whatever else out there) terms and condition, annual financial report, and other similar kinds of reports, and YET we are so freaking hyped and can be heard often saying phrases, such as "be more open and transparent". What does it mean? I bet most can't even pin-point or itemize the key points that need opening or made transparent. Oh no, wait, I think I know.... could it be CEO salary (that's the most darn thing common people want to know). If that is considered being open and transparent, then we are doomed because I was thinking of more sophistication than this.

If most of us can't even understand the "open and transparent" reporting of financial status of company, what make us super kin to understand the CPF reports. Who will be scrutinizing these reports? Where will these reports be made available? How many bigots of us will be downloading the pdf format and read through the reports? I bet it won't be ROY. So, for most people like me, to constantly hear people scream, "Transparent, transparent and open, open" is really like asking someone to strip naked and walk around.

Now for some fact about CPF

"CPF don't take away your (just 55.6% only, while the other half is your employers') money"

(1) You get monthly payout once you turn 65 (and dependent on which plan you chose when you were 55)
(2) The amount not consumed will be passed on to next gen (as bequest/will)
(3) CPF is not your money entirely, don't defeat the purpose of CPF
(4) Singapore is not welfare country; if the majority of people opted for withdrawal and made bad decisions with the money, Other Singaporeans will have to pay (through tax payers' money) to support these people. Furthermore, most people (esp. those low income earners) are not into savings and if given an opt-out option, they would have been more than happy to have taken it (at least some can be used for TOTO or 4D because I would do that too). Also, what freaking mind made you think that they will be able to manage their money (money management)? As an example, those who were self-employed and didn't thought through about retirement, and thus forgo CPF self-contribution, are the ones who have no money management skills. Instead of emphasizing on the fact that CPF will not allow you to withdraw lump sums, they should have focused on the purpose of CPF, i.e. to sustain contributors in golden years with basic monthly payout. This can be on top of other income you will be receiving then (if any), e.g. from insurance, dividends from shares, allowance from your kids, etc.
(5) No money management skill with lump sum money = die liao!
(6) With money sense and lump sum money = huat ah!
(7) How are we going to manage the "die liao" people? Let them die or use tax payers' money to sustain them with monthly payouts?

If I am the government, I will try out a research on randomly selected Singaporean population, e.g. 1000 of selected participants in each group, i.e. those opting for monthly payouts and those opting for complete lump sum withdrawal. After a time (e.g. 5 to 10 years), CPF in collaboration with Singapore Universities, will conduct follow ups to determine the outcome of their subject. Based on the findings, publish it for the public to judge for themselves. Although some will argue (without merit) about the findings, they will be arguing with no evidence to support their say (whereas the CPF board will have the scientific evidence to back it up).

To summarize: Singapore is being too protective of its citizens. Singapore worried that failure of certain group of people in managing their withdrawn money will end up becoming a social and financial burden to Singapore and tax-payers (read about homeless people in Singapore). However, without any trials and errors, it will be very difficult for the majority of people to accept. In addition, some people just despise Singapore government treating them as kids (an innate rebellious trait that we will have one time or another in our lifetime).

Not long ago, the banning of chewing gums were mocked by many. Considering that the rationale was to prevent littering of this sticky leftovers, most people still think that the government should just forgo their parental role and allow them "grow up" and decide on their own. Fortunately the ban is still in place or else most of us will be scrapping gums off us everywhere we go. Fortunately, gums can still be bought for dental health reasons. Unfortunately, we still have litter bugs leaving plastic cups, plastic bags hanging on tree branches, abandoned bicycles, spittoon, urine and stools left at common walkways, lift buttons, on the floor etc. I wonder how long should we be letting these people to "grow up". Even when these batch grew up, how about the next batch of people coming in?

Just a thought.

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