Home News Calvin Cheng attacks MARUAH on CPF ideas

Calvin Cheng attacks MARUAH on CPF ideas

Author

Date

Category

- Advertisement -

Here’s a letter from former NMP Calvin Cheng to The Independent Singapore on MARUAH’s ideas on CPF

Dear Sir

I refer to your article regarding MARUAH’s statement on CPF.

MARUAH’s statement is based on some basic conceptual errors.

- Advertisement -

Firstly, CPF is not a form of social security contribution. Social security contributions all over the world are taxes. These contributions go into a common pool and  citizens get a pension from the government when they retire.

CPF is a compulsory personal savings scheme. The sum one contributes to one’s CPF  account is one’s own money. The money in the individual’s account is also his and his only. This kind of savings is not a tax and contributions are not shared with all other citizens.

It is thus a basic error to compare CPF contributions to social security contributions. Using this comparison to call for greater pension payouts is thus conceptually wrong at best, and intellectually dishonest at worse.

Because CPF is a savings account, the interest rate CPF pays out should be compared to savings accounts in the private sector, rather than investment accounts. The rates that CPF pays (2.5 per cent for the Ordinary Account and 4 per cent for the Special

Account) is much higher than anything private financial institutions pay for risk-free deposits. Comparing CPF interest rates to investment returns is thus again intellectually dishonest.

It is however true that as cost of living rises, people will need more and more when they retire. In Singapore however, the discussion is not about how much state pensions need to be, but rather how much one manages to save up before retirement, including the compulsory savings in CPF. This may have to be supplemented by state grants and subsidies paid for by taxpayers.

Presenting the issues falsely only causes confusion in this important debate.

Calvin Cheng

Former NMP

Send in your scoop to news@theindependent.sg 

- Advertisement -

Goh Chok Tong says that as true friends with Tan Cheng Bock, “we will always have each other’s best interest at heart”

Despite a relationship that seemed to be fraught with political tension from the past year, Goh Chok Tong and Tan Cheng Bock met for dinner over the weekend. On Friday (Feb 19), former Emeritus Senior Minister (ESM) Goh posted on social media...

Prank orders in Joo Seng affects at least 12 delivery riders, police investigating incident

Singapore – The police are investigating a case of "intentional harassment" involving Foodpanda delivery orders sent to a Housing and Development Board (HDB) flat in Joo Seng after a resident highlighted a case of "prank orders" in social media. On Friday (Feb...

JTC issues stop-work order on contractor that ‘erroneously’ cleared Kranji woodlands

Singapore – The contractor that “erroneously” cleared a forested area at Kranji has announced it has been issued a stop-work order by JTC and is assisting the developer with investigations on the issue. On Feb 16, state-owned industrial property developer JTC responded...

Send in your scoop to news@theindependent.sg 

Theindependent