The government allows you to use your retirement fund to purchase your flat so that you won't feel or see the pinch of the overinflated flat. Why can't the government run the CPF like a pension plan? 25 percent of one's salary goes into the CPF ...and all we get is the meager return of 2.5 percent or in rare occasion, 4 percent. Our savings is being eaten up by inflation!!!!! The government gets cheap money to build flat that is sold to us at 2X profits!
Look at pension scheme elsewhere ...the teachers pension fund in Ontario, Canada, pays 60 percent of best 5 years salary. To earn that pension, teachers contribute 12 percent of their income, matched by the employers. That fund is healthy and sustainable. Why is the government not willing to turn CPF into a pension scheme? Because by doing so, there goes the cheap money that it plows into Temasek, GIC and HDB.
The government is using our money to screw up is the short story!!!!!
We are not asking for free flats ...just actual cost plus a 10 percent margin to cover the operations of the HDB. The land cost should not be included. Consider that as the subsidy.
The current CPF scheme does not help the majority of sinkees; there isn't money enough saved for retirement. So, your social burden contention remains.
So, the CPF Life is a pseudo pension. Why not turn the CPF into a pension scheme? The reason why the government won't is that then the cheap source of funds disappears as the CPF funds will need to be well invested to generate the returns to support the pension fund. And we know how poorly the fund managers in Temasek and GIC perform.
CPF Life is absolutely a Pension Scheme. You are mistaking CPF with CPF Life (or CPF Retirement Account). A pension scheme is a scheme that provides an income after retirement, which is what CPF Life (and the old Minimum Sum Scheme) provides. CPF is a social security scheme that provides for housing (Ordinary Account), retirement (Special Account which becomes Retirement Account) and healthcare (Medisave Account). Many other countries also include unemployment benefits in their social security scheme, but CPF does not do that.
The concerns that you have expressed are actually against the CPF-OA, and I do agree with many of them. However, these concerns don't really have anything to with the CPF Life which is the topic of this discussion. The SDP manifesto proposes completely doing away with OA, focusing on SA/RA and converting MS into a single payer healthcare scheme, and I can see the merits of that proposal. However, simply raising the interest rate of our OA is a terrible solution - there will some dire consequences of that. If you like, we can continue to discuss this on a separate thread.
I think the the majority of Singaporeans should be able to survive with the CPF Life payouts assuming that the minimum sum is met and housing is paid up. I will be able to survive on $800/month today (based on $100k in CPF Life) although I probably have to give up on a car. Those that need more are probably living a more extravagant lifestyle, and either will need to cut down, move to a cheaper country, or they most likely already have more savings outside of CPF. Now there is a concern about the people that don't meet the minimum sum, and I think more should be done to the government to help these people.
The OTPP is a good scheme. CPF-SA/RA follows the same principles but is more complex because of the tie-ins with the rest of CPF. Contribution rate to SA is low - 6-9.6% of salary compared to 23% for the OTPP, but CPF-RA has the minimum sum 'cap', and funds from OA and MS (behind MS minimum sum) gets automatically transferred into the RA at age 55. The problem with the OTPP is portability. My sister in Toronto has been in and out of the scheme a couple of times as she changed jobs, and each time it has been a pain going through paperwork for pension transfers. Nice thing about CPF is that all employers in Singapore are under it... definitely suits the job hoppers better. Also, note that in pension income is taxable in Canada, whereas CPF withdrawal is tax-free.