[caption id="attachment_3028" align="alignright" width="150" caption="Photo by Joe Shlabotnik"][/caption] I read Minister Gan Kim Yong’s remarks relating to the amendments to CPF Life with incredulity and shock. The article by the Straits Times “CPFLife payouts for Life” is very misleading as the content of the article focuses on the questions raised by Mdm Halimah Yacob. Her concern is expressed here:

The remark was directed at Madam Halimah, chairman of the Government Parliamentary Committee for Manpower, who noted that the law allows the CPF Board to stop CPFLife payments unless the Lifelong Income Fund is solvent. ‘While I can understand the legal basis for this provision, I find it quite disturbing to have it reflected in the Bill,’ she said.

The Government never giveth but the Government can taketh away So it appears that the Government is able to legally STOP paying you out of YOUR savings accumulated from YOUR hardwork and locked by a portion of YOUR MINIMUM SUM CPF balances if the Lifelong Income Fund is insolvent. However, given that the Lifelong Income Fund is mandatory for most CPF members and that you don’t really have much of a choice, if the fund is at risk of being insolvent, that would speak volumes about the quality of the people paid to run it. If you were given a monopoly and could control how much expense (payouts) to incur and can take other people’s money to invest (unlimited upside), some risk takers may use that money to make bets on the market. If the bets turn out well, 8 month (or more bonuses). If the bets turn sour, quit and find a new job while the members payouts get cut?! Is the scenario I imagine realistic? Did we go through the last year or so since the sub-prime where we learnt nothing about putting people in such scenarios? Read more...