$324.2b owed to CPF members?

By: Leong Sze Hian

Why S’pore has external debt of US$1.766t?

I refer to the article “Why does Singapore have an external debt of US$1.766 trillion?” (Straits Times, Dec 28).

“A Government article on the subject explains that Singapore does not borrow to spend. Instead, it invests all the proceeds which it has borrowed. The income which it earns from its investments is also more than sufficient to cover the debt servicing costs. As of March this year, the total outstanding Government borrowings stood at S$436 billion.

The Government issues three types of domestic debts:

• Singapore Government Securities to develop the domestic debt market;

• Special Singapore Government Securities to meet the investment needs of the Central Provident Fund, and

• Singapore Saving Bonds to provide individual investors with a long-term saving option that offers safe returns.

What is also important to note is that unlike some other countries which have to raise funds in currencies such as the US dollar or euro to balance their books, the Government does not have any foreign currency debts.”

Amount due to CPF members is $324.2b

According to the Department of Statistics’ Monthly Digest of Statistics – the Amount Due to (CPF) Members is $324.2 billion in October, 2016.

This has been increasing steadily annually from $150.9 million in January 1961.

Percentage credited to CPF members – “na” from 1961 to 2001?

The Interest Credited to CPF members is shown as “na” from January 1961 to December 2001.

Percentage in 2002 was 2.6%?

For January 2002 – the Interest Credited was $238 million over the Amount Due to Members of $92.9 billion.

This works out to an annual interest of only about 2.6 per cent.

Percentage in 2006 was 3.1%?

Similarly, for October 2016 – the Interest Credited was $1.02 billion over the Amount Due to Members of $324.2 billion.

This works out to an annual interest of about 3.1 per cent (up to October).

Real Percentage was 0.5% from 2001 to 2015?

Since inflation from 2001 to 2015 was about 2 per cent per annum (CPI 2015 99.461 divided by 2001 75.568) – does it mean that the real annualised rate of return on our CPF Ordinary Account is only about 0.5 per cent (2.5 – 2.0) per annum?

Lowest real Percentage of all national pension funds in the world?

Is this the lowest real rate of return of all national pension funds in the world since 1999 – the year that I understand that the CPF Ordinary Account interest rate has remained at 2.5 per cent until now?

Returns from investing our CPF?

What is the annualised rate of return derived from investing our CPF funds since 1999?

In this connection, I would like to quote again – “A Government article on the subject explains that Singapore does not borrow to spend. Instead, it invests all the proceeds which it has borrowed“.

Cumulative returns from investing our CPF vs % to CPF members?

What is the cumulative difference between the annualised rate of return derived from investing our CPF funds since 1961 (when CPF started) to today, and the annualised rate given to CPF members?

In absolute numbers on a cumulative basis with interest – how much money are we talking about over the last 55 years?

No transparency and accountability?

Are we the only developing or developed country in the world that is arguably non-transparent, as there is no disclosure on the rate of return derived from our pension funds relative to the weighted average interest rate paid on all our CPF accounts (Ordinary, Special, Medisave and Retirement accounts)?

$324.2b owed to CPF members?

Also, does it mean that our domestic debt owed to CPF members is $324.2 billion?