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7/02/2011

Citizen’s savings become Nation’s reserves

According to Ngiam Tong Dow’s article, the country’s reserves comprise CPF contributions, budget surpluses, revenue from land sales and dividends from GLCs. I would believe all the profits made by the ministries and stats boards would also be included in the reserves under surpluses.

Does it mean that the funds managed by the GIC and Temasek Holdings are not part of the reserves but funds managed by them from the govt? Technically that could be the case as it would lead to double entry and recognition.

What I am curious is the assigning of the people’s savings in the CPF as the country’s reserves. Aren’t this money the people’s money? The govt’s money is money it generated from its services, profits and surpluses. There cannot be any misunderstanding that the people’s savings is not the country’s money. It is a more acceptable general description that the country’s savings or wealth is the people’s money as the people is the ultimate owner of the country. Definitely the country cannot claim that the money the people saved belong to the country and become its reserves. If that be the case, it has an additional reason to boost up the savings in the CPF to inflate the reserves. Have all the lockup schemes got anything to do with this?

This distinction must be clearly defined or else it is easy for the administrator of the people’s saving to think that it is their money and they can do anything they want with the money. The often changes in the withdrawal date and amount to be withdrawn and what or how the people can use their savings are manifestations of a mindset that puts questions to the ownership of the people’s savings in the CPF.

The people cannot take it lying down that the govt can dictate how and what it wants to do with their savings, locking it up in all kinds of schemes. Should this be a time to redefine the people’s savings in the CPF as the people’s savings and not the nation’s reserves? As a reserves it is good to know and to see but cannot touch except by the govt. Does not seem very right is it? It is better to remove the people’s saving from the definition of reserves so that no one will harbour wild ideas about them.

Your money is my money and my money is my money.

6 comments:

Anonymous said...

CPF will be your own money if you cease to be the citizen. Every Singaporeans should now start to think of the day when they leave the place for good so that they can have the CPF money in their good hand.

My advice is to invest your CPF in a good property in Singapore since the population is going up and economy is still OK. Property prices will continue to go up or stay at this level since the demand is high and there are limited supply. Do not buy those inflated apartment but buy landed or HDB flat. Then wait till your property price maximised and you are ready to go in few years time. You can then cash in your CPF and enjoy your life elsewhere with no worry on the problems with this small rock on earth. Mind you, climate change could be a big problem to a small rock in future. It will happen and I do not want my future generation to suffer the consequences.

Anonymous said...

Mr Chua Chin Leng makes it very clear here that CPF Money belongs to the individuals who have contributed them. There can be no dispute about it. BUT, as reflected in Mr Ngiam Tong Dow's Article in the newspapers and highlighted here by Mr Chua, CPF forms part of the National Reserves. Technically, it could be termed as State Property, if I interpret it correctly. However, it should not be as iterated by Mr Chua, the Money(CPF) belongs to the PEOPLE.
CPF was/is forced saving legislated long ago and remains in force and most Singaporeans are fine with the Scheme(CPF) EXCEPT for the constant changes made to it over the last few years.
The changes have given rise to much speculations that it was misused for investment, there are insufficient fund to return to contributors entitle to withdrawals due to huge losses in foreign investments etc.
Whilst I find use of CPF for Medicare, property purchase, Education and Insurance are laudable, the same cannot be said for it to be used for speculative gamble in stocks.
It has become much more difficult to claim back our CPF as more rules are set and its' interest rate is falling far behind the inflation rate. CPF Holders are now beset with many disadvantages.
Admittedly and certainly, it is not easy to have a holistic way of managing CPF to the satisfaction of every account holders. The CPF Board may and can be flexible with withdrawals to those who need it for medical treatment, loss of income(jobless for long period) etc prematurely and or allows a larger percentage to be used.
Last but not least is that the services and goods(medication for example) that CPF can be used SHOULD AND MUST BE MADE AVAILABLE AT MINIMUM COSTS. Somehow, I just got the nagging feeling that when CPF can be used, the costs of the items are not as low as they can be. Maybe I have grown cynical over the years and also because similar items are much cheaper abroad.

Anonymous said...

The more I read about this issue, the more confuse I become.

Really, ignorance is bliss. Knowing is causing all the unhappiness, pain and suffering.

Anonymous said...

As far I am concerned,money in CPF belonged to citizens individually in their own names and any net profits derived from the employment of these funds by the Board belong to citizens collectively. So are money in Statutory Boards,,GICs and they belong to the people.
At the very outset,the Govt do not have any money.They got their money from taxes ,fines and subscription fees as in the case of NTUC

Anonymous said...

Well, better believe it that all those money in GIC, Temasek and reserves are by defective and fallacious arguments the property of the PAP Government.

Just consider the fact that they have been claiming that since budget surpluses used for estate upgrading are accumulated by them, they have the right to use the money to benefit PAP controlled wards only.

What does this kind of mentality tell us about this Government's thinking on whatever reserves we have accumulated? Why are they so anxious and particular that we need a PAP controlled President to hold the second key?

And we are going to believe that the reserves belong to us? I am not so optimistic about such claims.

rex said...

rex comments as follows,

According to CPF website,
"The CPF Board is the trustee of members' CPF savings. "

According to http://legal-dictionary.thefreedictionary.com/trustee ,"trustee" means
An individual or corporation named by an individual, who sets aside property to be used for the benefit of another person, to manage the property as provided by the terms of the document that created the arrangement.... Trusts are useful for investment purposes, and they offer various tax advantages. Another purpose of trusts is to keep the trust property, usually money, out of the hands of the owner. This may be desirable if the beneficiary of the trust is incompetent, immature, or a spendthrift.

So by definition, it is not true for anyone to say that CPF funds are "national reserves". My cpf funds is definitely MY money, not Singapore's money. However, it should be noted that it is not wrong for CPF Board to use members' cpf funds to invest in Lehman Brothers, etc. etc, if CPF board should deem it fit. The act of investing the trustee's funds does not require ownership of the funds It also does not require consent of the beneficiaries, because by definition, the beneficiaries are either incompetent, too young, or spendthrift as per the definition...

So a trustee like CPF Board, can certainly play around with all the singaporeans huge amount of cpf money and go on a "gambling" spree as part of their professional judgement of maintaining value for the trustee until the trustee is ready to withdraw according to the terms of the trusteeship.

I suppose if the trustee makes terrible error or gets cheated along the way, the beneficiaries (we the incompetent CPF member beneficiaries) has a right to sue them to recover the money when we find the money not there.

HOWEVER if you go to the cpf website financial stats page, all you see is the total members contributions of singaporean workers. The numbers are so pretty.

You don't see any details of the external investments made by the CPF board using the trust funds. So you have no idea the performance of the funds, you dont even know how much of the big pool is taken out to invest in GIC projects or whatever.. this is not a very useful website is it?

And when you want to take out the money they say WAIT, and they introduce a Min Sum Scheme.. so you still cannot prove that they have squandered the money or make huge losses...

So we always lose, we the incompetent beneficiaries, have to live by the day and only in our private space can we scream and shout at the CPF board, "I don't trust thee".

rex