The argument between two prominent figures over Singapore’s Central Provident Fund (CPF), continues to remain a hot topic, reaching new heights as both stand their ground.
First, the former Nominated Member of Parliament Calvin Cheng said that the retirement age in Singapore should be extended to between 70 and 75. This was on Thursday, February 21.
Cheng’s point is that since people are living longer than ever, it’s “impossible” for the retirement age to remain the same as it was in years past.
He wrote, “People must be encouraged to work longer, since we are also healthier as we age. If people are to live till 90, retirement should not be till at least 70, or even 75 for CPF savings to last.”
Then, opposition leader and lawyer Lim Tean answered back vehemently two days later, on Sunday, February 24, saying that the CPF system itself is flawed and is in dire need of fixing. He resorted to all caps in one part of his Facebook post, in direct reference to Mr Cheng’s assertion. “STOP making Singaporeans work longer!” he wrote.
“It is not the solution when you have a fundamentally flawed system that is in place which enriches the Government and impoverishes Singaporeans. What needs to be done is to tear down the current CPF system and replace it with a fairer system which ensures true retirement adequacy for all Singaporeans!”
Mr Lim also promised that with his party, the People’s Voice, he would return CPF at 55.
By Monday, February 25, Mr Cheng hit back, claiming that Mr Lim’s statements about the CPF being “broken” is “populist nonsense.”
The former NMP points out that Mr Lim says Singapore’s CPF compares poorly with Malaysia’s EPF, which for him is “made-up garbage.”
This is because according to the World Bank, Malaysia’s EPF only covers half of the labor force, and has the biggest life-expectancy to pension gap in the region, at 19.2 years. Malaysia’s retirement age, claims Mr Cheng, is unrealistically low because people are, in fact, living longer.
The other point that Mr Cheng refutes is the low rate of return of the CPF, as Malaysia’s EPF pays higher than 6 percent.
He asserts that investment rates of return should not be compared from country to country, due to differing economic situations, which include inflation rates.
Mr Cheng writes, “So for example, having a strong economy and currency with little political risk, our base interest rate is 1.9%. Malaysia’s base interest rate is almost double at 3.25%. The maximum interest CPF pays out is slightly more than double the base interest rate here. So is Malaysia’s over there. THAT’s how one might compare.”
He ends his post with a suggestion for Mr Lim since what Mr Lim seems to be interested in is a high rate of investment return. Mr Cheng says, “I have a suggestion for Lim Tean:
Liquidate whatever assets he may have left and change it to the Uzbek Som and deposit it in Uzbekistan’s banks.
Last I checked, they were paying 20% interest on deposits.
Please share. Don’t get stirred to anger by the financially illiterate.”
Some netizens seemed to agree with Mr Cheng, pointing out that it is hard to accept financial advice from Mr Lim, who recently faced financial troubles to the point of an application for bankruptcy being filed for him by a former business associate who had not been paid the money Mr Lim had borrowed. This matter has recently been settled, however, which paves the way for Mr Lim to contest in the next General Election (GE).
Mr Cheng answered the commenter flatly
And so the battle rages on. Though Mr Lim was tagged in the comments of Mr Cheng’s post, he has yet to reply.
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