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Business Times - 12 Aug 2011
All CPF monies safe, will be paid back: MOF By CONRAD TAN
(SINGAPORE) The Republic's Central Provident Fund (CPF) savings are backed by the full resources of the Singapore government, which has far more assets than liabilities and can fulfil its obligations easily, the Ministry of Finance (MOF) has said in an update on its website.
'All CPF monies are safe,' MOF said, in its answers to frequently asked questions on the protection of Singapore's reserves. 'CPF monies are invested in bonds that are issued and guaranteed by the Singapore government. The full resources of the government are backing this guarantee that CPF monies will be paid back.'
The government's assets 'far exceed its liabilities' - including its CPF liabilities, it added.
'There is no net government debt. Singapore is in fact a net creditor country, not a debtor country.'
None of the funds raised from the government's borrowing are for spending; in fact, under the Constitution, the government cannot spend money that it raises from selling debt securities, MOF said.
'All borrowing proceeds are therefore invested. The investment returns are more than sufficient to cover the debt servicing costs.'
The government's strong reserves position is illustrated by the investment returns that are made available for spending on the government budget, MOF said.
That net investment returns contribution, as it is known, is currently about $7 billion each year.
That contribution is drawn from returns on the government's net assets - after deducting all its liabilities, including CPF monies - not gross assets, MOF said.
That means that the government's net assets produce 'significant returns', it added.
'It should be further noted that, as stipulated in the Constitution, the net investment returns contribution recorded in the government budget only comprises up to 50 per cent of the returns earned on the reserves.
'If the government's assets had not been adequate to meet its liabilities, there would be no contribution from the investment returns on reserves in the government budget.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
All CPF monies safe, will be paid back: MOF By CONRAD TAN
(SINGAPORE) The Republic's Central Provident Fund (CPF) savings are backed by the full resources of the Singapore government, which has far more assets than liabilities and can fulfil its obligations easily, the Ministry of Finance (MOF) has said in an update on its website.
'All CPF monies are safe,' MOF said, in its answers to frequently asked questions on the protection of Singapore's reserves. 'CPF monies are invested in bonds that are issued and guaranteed by the Singapore government. The full resources of the government are backing this guarantee that CPF monies will be paid back.'
The government's assets 'far exceed its liabilities' - including its CPF liabilities, it added.
'There is no net government debt. Singapore is in fact a net creditor country, not a debtor country.'
None of the funds raised from the government's borrowing are for spending; in fact, under the Constitution, the government cannot spend money that it raises from selling debt securities, MOF said.
'All borrowing proceeds are therefore invested. The investment returns are more than sufficient to cover the debt servicing costs.'
The government's strong reserves position is illustrated by the investment returns that are made available for spending on the government budget, MOF said.
That net investment returns contribution, as it is known, is currently about $7 billion each year.
That contribution is drawn from returns on the government's net assets - after deducting all its liabilities, including CPF monies - not gross assets, MOF said.
That means that the government's net assets produce 'significant returns', it added.
'It should be further noted that, as stipulated in the Constitution, the net investment returns contribution recorded in the government budget only comprises up to 50 per cent of the returns earned on the reserves.
'If the government's assets had not been adequate to meet its liabilities, there would be no contribution from the investment returns on reserves in the government budget.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
