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9/19/2007

Best suggestion from Lily Neo

The govt is going to fund the extra 1% given to CPF account holders from the interest CPF is earning. How long have CPF been earning this extra interest that it can now pay the people 1% more? And how much interest has CPF been getting all these years relative to how much it is paying to the CPF account holders? Does anyone know? With the good performance of Temasek and GIC, Lily Neo's suggestion of pegging CPF interest to them at -2% is one of the best suggestion so far. And given the track records of these two agencies, did I hear 18% return?, -2% still gives a return of 16%. Swell! But let' not be too ambitious, make it -4% to give the agencies some incentives to make the money work harder but with a guaranteed return of 4%. Now that will be cool.

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