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94% "voted" against CPF Life PDF Print E-mail
Written by Wilfred Ling   
Tuesday, 17 August 2010

I read with dismay from Straits Times article "CPF Life: Some want to be given a choice" dated 18 August 2010 that out of 700,000 of CPF members who are eligible for opt-in, only 40,000 took up CPF Life and committed S$2 billion to the scheme. This means that the remaining 94% said “no”. This is shocking to me. Do bear in mind that the CPF Life will eventually be compulsory.

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Anonymous   |220.255.7.232 |2010-08-18 00:19:36
Not surprising lah. In this "you die your business" country, most singaporeans have a short-term neanderthal survival mindset. Better to have more money in hand, than to have smaller amount dispensed over lifetime.

I won't be surprised if most of those who opted for CPF Life are those who earned higher salaries and have bigger savings. The money in their SA and RA are just a small fraction of their retirement savings --- they just treat CPF Life as a small base for monthly retirement funding.

For vast majority of elderly singaporeans, their CPF monies form a large part of their retirement savings. Hence they will naturally want to take back as much as possible, in as short a time as possible.

Why do you think most singaporeans can't wait to withdraw as much CPF as possible when they turn 55 yrs old? For a logical person who is not in need of cash, he will instead delay withdrawing his CPF in order to get the minimum 2.5% interest. He can always withdraw his excess CPF anytime he wants after 55 yrs old. In fact, many rich singaporeans even want to put in more than the Minimum Sum into SA and RA in order to get the 4% interest, but this is not allowed.
Anonymous   |220.255.7.144 |2010-08-18 00:28:34
Also statistically, poorer people tend to die earlier. So if you consistently earn below the median wage, chances are that your life expectancy is also below the average.

In this case, most lower-income people will naturally prefer the existing Minimum Sum Scheme draw-down.
The Watchman   |220.255.7.213 |2010-08-18 09:35:29
Not all schemes will satisfy and benefit everyone.I am not surprised of the low take up rate. Many don't have the minimum sum or the $40K and for this group CPF is helping by top ups and higher interest rate.
It is a sad thing a good intention is suspected. Some even listen to the insurance agents who use scare tactics to persuade them to buy the private annuity. Last time the scare tactics was CPF draw down won't last, full stop. and their annuity would last for life and maybe forever.
So these could be the reasons why the take up rate is low.
Garrett   |24.11.193.171 |2010-08-18 16:28:06
I'm not surprised that 94% who had a choice choose not to opt in for CPF LIFE. The issue is about trust and transparency. Most people don't trust the government to manage CPF LIFE in a fair and equitable manner. Just look at their track record for the CPF Scheme, cuts in CPF OA rates, cuts in employer contribution, raising minimum sum, raising retirement age, etc...

The CPF LIFE while claiming to be an annuity is also conveniently excluded from the Insurance Act (yes it's written black in white in the CPF Act). So who will be the regulator to ensure that the pool money is not tampered with?

Also, the CPF Act does not state a minimum interest rate for the CPF LIFE fund pool, nor does it state a minimum payout. Who in the right mind would purchase an annuity that has legally the right to pay you zero dollars?
Anonymous   |202.156.10.233 |2010-08-18 20:01:02
If CPF Life is such wonderful and beneficial to people, do the ministers themselves take up CPF Life? Or this thingy is meant only for the poor laymen?
Wilfred   |SAdministrator |2010-08-18 21:42:28
When my parents asked for a quotation on the CPF Life, the staff just wrote down the figures on a scrap piece of paper. My parents asked me for advice and the only information they have is that piece of scrap paper. I was shocked by it but then I recalled that CPF Life is unregulated scheme. Well, it is regulated within CPF Board but not by MAS.
Jasmin   |202.156.10.233 |2010-08-18 22:05:12
wilfred,
I want to believe that CPF offers a better annuity than the insurers. But look at the manner things are done, really puzzled me.
Anyway, for our cases, we have NO choice.
So in the end, did your parents take up this CPF Life?
Anonymous   |220.255.7.202 |2010-11-01 06:41:02
CPF Life is essentially nonsense. After working our socks off for our entire working life, now we have to put our CPF monies with them??
Why can't we just have our monies and have steak for breakfast, lunch and dinner for the next 10 years rather than living on a pathetic few hundred dollars from CPF Life for the next 20 or 30 years (provided WE are all so healthy as to not get stricken with illnesses and such when we have white hair)?
Born in debt, retire in debt, pass on your debt.
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