(05-02-2015, 08:45 AM)Jacmar Wrote: [ -> ] (05-02-2015, 07:27 AM)CCUV Wrote: [ -> ]All these talk about not having enough for retirement was down partially not having a good enough return on cpf....all these talk wouldn't even surface if return are reasonable.
I have to disagree with your view on this and the rest of those in the camp that says CPF should give us better returns. Just to be clear I was not in govt before and don't want to launch into a political debate on this.
Sure who don't want to get more for your savings but it comes with a risk. the CPF can give you more but are you prepared that in some yrs there might be zero or negative returns? In this world of near zero interest rates where can you get a risk free returns of >2.5%? In fact I still have my CPF OA $ which I can withdraw(I am pass 55) in there as I cannot find a risk free rate better than 2.5%. do let me know if you do.
The govt by giving >2.5%(some amt as much as 4.5%?) for your cpf money is already indirectly giving money to the pop when they could easily go out and issue bonds with lesser interest. just go look at what govt bonds paying now. as Oliver says we want more!!
The cpf system has failed badly my friend,you might have a different view. A good system wouldn't ask the cpf holder to extend their retirement age and all those boastful media saying about temasek and gic excellent return had not translate into better return without government increasing gst. I rest my case
Hi Specuvestor,
Is CPF really a government liability? This is a debatable point. IMO, it is not a liability for now based on current circumstances. In addition, yes I am in the camp for higher returns
As many will know, the CPF proceeds are invested together with the nation reserves in exchange for SGSS bonds. For an ordinary middle income CPF member, he/she is likely to obtain returns of 3.5% to 4% annually. But how much is the investment accurred from the reserves? Over the past 20 years, the returns has been 6.5% p.a. Given this line of thoughts, CPF may not be a liability. Small trivia: As of now GIC's portfolio is approximately 45% equities, 10% property and rest in bonds and cash.
As I have said in another CPF related post on VB, the insurance industry offers similar products with returns ranging from 3.1% to 4.75%. In the process of doing so, insurers make billions out of this while paying CEOs/agents a fat pay check and millions in advertising. These 3.1% to 4.75% returns tend to be smoothed out returns because insurers are aware of the 1) volatility of the market and 2) the general population unwillingness to stomach negative returns. This is why insurers smooth out their portfolio returns, resulting in a low but consistent yield of 3.1 to 4.75% despite the ups and downs of the market
Hence as a custodian of Singaporeans' retirement funds backed by a non-profit policy managing these monies, my personal view is that the returns can be bumped up to reflect fairness to CPF members
^^ Guaranteed returns vs non-guaranteed returns. If CPF Special Account no limit, insurance co and banks die liao.
Alot of financial engineering in cpf....for e.g most cpf holder use cpf to pay for housing loan but how come they are charged an interest for using their money? Effectively cpf holders are funding the governement portions of interest payment.
(05-02-2015, 10:10 PM)CCUV Wrote: [ -> ]Alot of financial engineering in cpf....for e.g most cpf holder use cpf to pay for housing loan but how come they are charged an interest for using their money? Effectively cpf holders are funding the governement portions of interest payment.
the interest 'charged' goes back to your own CPF OA, not Govt. not funding anyone except yourself.
Pls do rest your case.
(05-02-2015, 10:10 PM)CCUV Wrote: [ -> ]Alot of financial engineering in cpf....for e.g most cpf holder use cpf to pay for housing loan but how come they are charged an interest for using their money? Effectively cpf holders are funding the governement portions of interest payment.
Another engineering that puzzle me "mystery" regarding calculation of interest payable in sma account. 10 years bond yield plus 1 percent.......hmmm........why is government using cpf holders money to buy government bond? The increasing min sum cause a huge demand for government bond especially 10 years which suppress yield of 10 years.
10 years sg bond is a basis for a lot of calculation like cpf sma account,corp bond,business loan,calculation of reit listing,calculation of property loan........and coincidentally GLC is the largest borrower of loan and bond issuer......hmmmm
CPF retirement fund will always be grossly inadequate because of high housing prices. Most people will see their CPFs wiped out in order to pay for their HDB apartment. Whether the CPF returns is 4% p.a. or not, most CPF members will not able to enjoy the part of the compounding effect where the numbers begin to take off.
It is designed that way, so that most members will receive a dismay return, despite the theoretical huge compounding effect. If our government would allow most CPF members to enjoy the huge compounding effect where the returns start to look really impressive, the CPF issue wouldn't have blown up so big. And no, I don't agree with the concept of our government being thoughtful by delaying the withdrawal rate from 55 years old to now 65 years old. I actually do worry about the financial health of any institution when they keep delaying payouts. As the late Toh Chin Chye said, there would be a run on the bank if the bank tried to do something similar.
(05-02-2015, 10:30 PM)Hunter_X_Hunter Wrote: [ -> ]Pls do rest your case.
(05-02-2015, 10:10 PM)CCUV Wrote: [ -> ]Alot of financial engineering in cpf....for e.g most cpf holder use cpf to pay for housing loan but how come they are charged an interest for using their money? Effectively cpf holders are funding the governement portions of interest payment.
Can't help but to put in another 2 cents worth...haha...really must rest case...sleepy
Third engineering,the extra 1 percent earn for 20k in ordinary actually goes into special account,instead of ordinary,can see cant touch? If it had stay in ordinary account,it can help to pay housing loan....another mystery I guess
