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The unexplained CPF Bermuda triangle,
with so little returns
December 29th, 2010 | Author: Contributions
As I try to follow and understand the trails of how our CPF money flows from the CPF board to the Singapore government and then to GIC and maybe, and this is a BIG maybe to Temasek holdings for investments?
I have the following questions, if they take my CPF money and invest and return peanuts while they make a bigger return on investment, is this fair to me?
Referring to the article below, please note that I have autopsied this article and it is divided into segments to try and understand how our CPF works for the government and for SIngaporeans.
CPF finances: Clarity needed to clear cloud of confusion
http://www.asiaone.com/Business/My+...+And+Savings/Story/A1Story20070924-26743.html
It states the following
“The relationship is not so simple. Let me give an example. You put money in a bank and you agree that you put it there and you get 2 per cent. The bank publishes a report and says of all its earnings, it earned 8 per cent. You go to the bank and say, “Iwant 8 per cent”. It doesn’t work.”I would like to state that the above remarks should not apply, as I did not agree to those “peanut returns” in the first place
Next, what about investment losses?
Rather than view the CPF Board as “lending” the money to the Government, Dr Ng said that, in fact, the Ministry of Finance (MOF) has “taken our liabilities”, meaning that MOF bears the risk of losing the money if investments fail.
“What MOF does with its money is MOF’s consideration but the Government takes over the liabilities of the CPF Board which promises a risk-free rate to members. And that is how it works.
How does the Ministry of Finance or government, take on those liabilities?
Are these indirectly or directly borne by Singaporeans in the form of taxes to recoup these losses?
I am already put at risk if I cannot use my CPF money to pay in full for my medical expense, if I have no cash, so how is CPF “risk free” to me?
So in summary it’s like if GIC WIN BIG, they only pay you the tiny interest rate, but if LOSE, Singaporeans foot the bill, because the governments money is actually Singaporeans money?
So what about Temasek holdings in relation to our CPF monies?
It recently published 2 replies that it does not use our CPF monies.
First reply (I have taken out the vital part for reflection)
While Temasek is wholly owned by the Singapore Government, we are not a fund manager, and do not manage Singapore’s official foreign reserves and other government reserves
http://www.temasekholdings.com.sg/media_centre_responses_22Feburary2010.htm
Second reply (I have taken out the vital part for reflection)
It also does not manage any other external funds, such as the Central Provident Fund monies of Singaporeans
http://www.temasekholdings.com.sg/media_centre_responses_22November2010.htm
The question right now is, if Temasek holdings is wholly owned by the Government, where does the government get its money from to allow Temasek holdings to invest or sell State owned assets (power stations) , and does the government keeps its profits or does it belong to Singaporeans?
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUAJYfH4nQ3A&refer=asia
Can someone who understands the business relationship, enlighten me please.
Much appreciated
Mr.CPF with little interest.
with so little returns
December 29th, 2010 | Author: Contributions
As I try to follow and understand the trails of how our CPF money flows from the CPF board to the Singapore government and then to GIC and maybe, and this is a BIG maybe to Temasek holdings for investments?
I have the following questions, if they take my CPF money and invest and return peanuts while they make a bigger return on investment, is this fair to me?
Referring to the article below, please note that I have autopsied this article and it is divided into segments to try and understand how our CPF works for the government and for SIngaporeans.
CPF finances: Clarity needed to clear cloud of confusion
http://www.asiaone.com/Business/My+...+And+Savings/Story/A1Story20070924-26743.html
It states the following
“The relationship is not so simple. Let me give an example. You put money in a bank and you agree that you put it there and you get 2 per cent. The bank publishes a report and says of all its earnings, it earned 8 per cent. You go to the bank and say, “Iwant 8 per cent”. It doesn’t work.”I would like to state that the above remarks should not apply, as I did not agree to those “peanut returns” in the first place
Next, what about investment losses?
Rather than view the CPF Board as “lending” the money to the Government, Dr Ng said that, in fact, the Ministry of Finance (MOF) has “taken our liabilities”, meaning that MOF bears the risk of losing the money if investments fail.
“What MOF does with its money is MOF’s consideration but the Government takes over the liabilities of the CPF Board which promises a risk-free rate to members. And that is how it works.
How does the Ministry of Finance or government, take on those liabilities?
Are these indirectly or directly borne by Singaporeans in the form of taxes to recoup these losses?
I am already put at risk if I cannot use my CPF money to pay in full for my medical expense, if I have no cash, so how is CPF “risk free” to me?
So in summary it’s like if GIC WIN BIG, they only pay you the tiny interest rate, but if LOSE, Singaporeans foot the bill, because the governments money is actually Singaporeans money?
So what about Temasek holdings in relation to our CPF monies?
It recently published 2 replies that it does not use our CPF monies.
First reply (I have taken out the vital part for reflection)
While Temasek is wholly owned by the Singapore Government, we are not a fund manager, and do not manage Singapore’s official foreign reserves and other government reserves
http://www.temasekholdings.com.sg/media_centre_responses_22Feburary2010.htm
Second reply (I have taken out the vital part for reflection)
It also does not manage any other external funds, such as the Central Provident Fund monies of Singaporeans
http://www.temasekholdings.com.sg/media_centre_responses_22November2010.htm
The question right now is, if Temasek holdings is wholly owned by the Government, where does the government get its money from to allow Temasek holdings to invest or sell State owned assets (power stations) , and does the government keeps its profits or does it belong to Singaporeans?
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aUAJYfH4nQ3A&refer=asia
Can someone who understands the business relationship, enlighten me please.
Much appreciated
Mr.CPF with little interest.
