"The strength of the system is we have assets that exceed our liabilities, that enable us to meet our commitments. And that’s why we’re not just triple-A-rated, but we’re able to provide CPF members with a very fair return on a guaranteed basis."
"The Government takes the risk that the performance of the GIC from year to year, sometimes even over five-year periods, may not be adequate for it to meet commitments to the CPF."
"Over the last 5 years it (GIC) earned 0.5% in S$ terms, over the last 10 years it earned 5.0% in S$ terms, over the last 20 years it earned 5.0% in S$ terms." - DPM Tharman
My guess about the buffer and its symbiotic relation with CPF is correct. This buffer had been used to meet CPF commitments for as long as 5-year periods. (Probably 1998~2003 and 2007~2011). However, the government should not be so obsessed with reserves and AAA-rating that it squeezes the people.
The returns of GIC are not impressive and negative for many years. Even less impressive if not for changes to CPF and holding out paper losses. But the welfare of the people should come first, not the performance indicator of the government.
People like Leong SH should stop making stupenduous claims on GIC returns. People who call for the total scrapping of GST are off the mark.