just for laugh: the truth about the CPF

[taggy]

Truth Exposed: The Dirty CPF-HDB Scheme To Trick Singaporeans
http://thehearttruths.com/2014/04/02/truth-exposed-the-dirty-cpf-hdb-scheme-to-trick-singaporeans/
author: ROY NGERNG 鄞义林




anyone read this sibei long article?
he say he uncover the truth about the CPF and found out its true colours....
3rd may got hong lim park event some more

read it just for laugh

[hyenergix]

CCPF on e whole is good. HDB prices are not. There shd not be ECs n DBSS.

[hopeful]

.....

anyone read this sibei long article?
he say he uncover the truth about the CPF and found out its true colours....
3rd may got hong lim park event some more

read it just for laugh

where is the funny part?

[taggy]

where is the funny part?

funny wat... complain hdb loan 2.6% is high, then take private home loan lor, nobody force hdb buyer to take hdb loan right

[taggy]

where is the funny part?

this is the most funny part of the article

If you’ve decided to attend the event, do pledge a $1 commitment to attend this event. Each pledge will be used for the event. We hope that more Singaporeans would take a stand and come together in a show of unity to let others know that it is time we will no longer allow our rights to be abused right in front of our eyes. We need to take our country back. You can transfer your $1 by ATM, Internet banking, or cheque, etc, to POSB Savings Account No. 279-12328-0.

[paulho77]

the writer forgot to mention (correct me if i am wrong) that the CPF accrued interest of 2.5% once u sell yr property will be paid back to yr OWN CPF account. he made it sound like this accrued interest is paid to the GARMENT.

[taggy]

the writer forgot to mention (correct me if i am wrong) that the CPF accrued interest of 2.5% once u sell yr property will be paid back to yr OWN CPF account. he made it sound like this accrued interest is paid to the GARMENT.

ya, that is another point to laugh

and on another point,
even though it may be true that minimum sum had increased over the years.
I personally think that ultimately, my cpf is still my $$$. When I am gone, my children will get whatever is left over lah. For the record, i m not leaving this world soon

[wt_know]

agree with you on this point. every dollar and cent in the cpf is your money.
the problem is locked up in minimum sum and drawdown age. and the goal post is keep shifting. don't think many live until the day to use the money.
basically, the money is left for next generation ... i'm fine with it

i support cpf. generally, it's a good scheme. whether the interest paid out is lower than fund or other country is debatable. however, accrued interest is something that i find troubling. it's like kena penalised for using own money.

this mean the property must at least generate 2.5% interest per year as minimum. else the property is making a lost when sell. like that property price can only go up

the writer forgot to mention (correct me if i am wrong) that the CPF accrued interest of 2.5% once u sell yr property will be paid back to yr OWN CPF account. he made it sound like this accrued interest is paid to the GARMENT.

[thomastansb]

CPF as a pension? Pension can use to pay house one meh? Can't believe anyone would believe this kind of dumb and twisted articles. The writer is dumb enough but those believe this article must be worse than the writer. Can't even differenciate between pension and savings. We don't have pension scheme in Singapore. If not, our income tax will be like 40%.

Truth Exposed: The Dirty CPF-HDB Scheme To Trick Singaporeans
http://thehearttruths.com/2014/04/02/truth-exposed-the-dirty-cpf-hdb-scheme-to-trick-singaporeans/
author: ROY NGERNG 鄞义林




anyone read this sibei long article?
he say he uncover the truth about the CPF and found out its true colours....
3rd may got hong lim park event some more

read it just for laugh

[hopeful]

funny wat... complain hdb loan 2.6% is high, then take private home loan lor, nobody force hdb buyer to take hdb loan right

how come HDB loan so high as compare to commercial loan?
is HDB pushing people to take commercial loan?

if not mistaken, if fall behind in HDB loan, HDB cannot re-possess flat whereas banks can repossess flat.

[taggy]

how come HDB loan so high as compare to commercial loan?
is HDB pushing people to take commercial loan?

aiya, u 3rd May go Hong Lim park to find out lor

[hopeful]

ya, that is another point to laugh

and on another point,
even though it may be true that minimum sum had increased over the years.
I personally think that ultimately, my cpf is still my $$$. When I am gone, my children will get whatever is left over lah. For the record, i m not leaving this world soon

how long does this period accrued amount last?
does children inherit the parents' accrued amount also?

for example,
parent leave HDB flat and CPF amount to child. child already has HDB flat, so he sell his parent's HDB flat.
does the child also inherit his parents' accrued CPF amount also?

[darkseed73]

I was told b4 to be born and raise in Singapore is my blessing.

Even when I was in US, my colleague told me she likes our CPF scheme compare to their social security scheme.

There is a very fragile balance for govt to strike between helping ppl and preventing ppl from abusing the schemes. I feel sometimes govt do too much resulting ppl having the mindset that everything govt is expected to solve. U want govt to solve every problem?

In return, govt expect u to follow their plans since u expect them to solve your problems.

Money don't drop from sky, and we don't have oil like Burnei. The only way govt make money is from it's ppl but that would be evil thus govt decide to take ppl's money to make more money in hope to reduce dependence on ppl for money. Is that wrong?

When I was in HK, I ask ppl why there are old ppl staying in "cages". That's becos there is no CPF life, no CPF, no crap to help them thus old ppl have to survive by themselves and "cages" has the cheapest rent in town. Have u seen the "public housing" in HK?

I compare us very closely with HK, becos I see a mirror image while working there. I knew Singapore will become the next HK and I see govt is try to prevent what happened in HK occuring in Sg. This including housing prices (with all the CRs), healthcare, old folks care etc

In the 90s, there was various news of old folks after getting CPF monies kenna cheated by China man, woman or spend it frivolously ending up by 60s they are broke. That's why govt created minimum sum becos ppl is dieing later....and later.....

Maybe I am just old and remembered some stuff.

Although, I agree this elite mindset must be killed.

Nobody is better then anybody, everybody should be given a chance before kenna shot down.

[taggy]

how long does this period accrued amount last?
does children inherit the parents' accrued amount also?

for example,
parent leave HDB flat and CPF amount to child. child already has HDB flat, so he sell his parent's HDB flat.
does the child also inherit his parents' accrued CPF amount also?

your question too cheem... bec i just cant figure out what does the parent's cpf accrued amount got to do with the child?
i will think, when the flat is sold, proceeds is used to settle outstanding loan, then remaining go to the child... same for the decease's cpf amount, child inherit...

[RCT]

Actually when the parents die and the cpf money is being pass to the kids... Is it past to them in cash or to their cpf?

[stl67]

I was told b4 to be born and raise in Singapore is my blessing.

Even when I was in US, my colleague told me she likes our CPF scheme compare to their social security scheme.

There is a very fragile balance for govt to strike between helping ppl and preventing ppl from abusing the schemes. I feel sometimes govt do too much resulting ppl having the mindset that everything govt is expected to solve. U want govt to solve every problem?

In return, govt expect u to follow their plans since u expect them to solve your problems.

Money don't drop from sky, and we don't have oil like Burnei. The only way govt make money is from it's ppl but that would be evil thus govt decide to take ppl's money to make more money in hope to reduce dependence on ppl for money. Is that wrong?

When I was in HK, I ask ppl why there are old ppl staying in "cages". That's becos there is no CPF life, no CPF, no crap to help them thus old ppl have to survive by themselves and "cages" has the cheapest rent in town. Have u seen the "public housing" in HK?

I compare us very closely with HK, becos I see a mirror image while working there. I knew Singapore will become the next HK and I see govt is try to prevent what happened in HK occuring in Sg. This including housing prices (with all the CRs), healthcare, old folks care etc

In the 90s, there was various news of old folks after getting CPF monies kenna cheated by China man, woman or spend it frivolously ending up by 60s they are broke. That's why govt created minimum sum becos ppl is dieing later....and later.....

Maybe I am just old and remembered some stuff.

Although, I agree this elite mindset must be killed.

Nobody is better then anybody, everybody should be given a chance before kenna shot down.

cpf is good for those who do not know how to invest and I support it.
for those who know how to invest, they will not like cpf as they claim that they can make more money than the 2.6% CPF pays..
if everybody claim that they can make more money by investing on their own and if they lose money in the end, who do you think they will blame?

people will blame gov for not setting up policing to prevent this and that...

so I agree with your post.. cpf generally is good for the public...
even I now know how to invest and surely can make more than 2.6%, i still support cpf because i dont want gov to use tax payer money to feed the bankrupt, the poor who lose all their money in crisis like the lehman, 2011.. etc

[Arcachon]

What is Money?

Money = Debt.

[solsys]

CPF is good, it's a plan for the future......

Anyway, the poster looks like it's done by an extremist.

[Arcachon]

http://www.fivestarsandamoon.com/roy...-singaporeans/

This article highlights some inaccuracies in a post by Roy Ngerng on his blog The Heart Truths.

The central contention in the post is regarding the rules governing the return of CPF savings withdrawn for housing. Mr Ngerng wants to have the right to decide whether to return the savings withdrawn for housing upon sale of the property because you should decide how much to “put into the bank”. He also takes issue with the need to return CPF savings inclusive of accrued interest because he sees this as interest that Singaporeans are paying to the Government for the use of their own money.

There are several problems with his arguments. First, the CPF is not a bank account. The purpose of the CPF is to provide a mechanism through which Singaporeans can save up for their retirement needs. Funds left in the CPF account earn specified rates of return. Some funds can also be withdrawn for investment in property or in other investment assets under the CPFIS scheme. The returns made on investments using CPF funds should contribute to the pool of savings being set aside for retirement. This includes the returns made on investments in property.

The accrued interest on the principal amounts withdrawn for housing comes from these returns. It ensures that monies in the OA grow at the same rate of return regardless of whether the money is left in the CPF account or withdrawn for housing. If the property purchased using CPF does not appreciate in value, the individual is only required to return whatever is the residual from the proceeds of his sale after paying off any outstanding mortgage. This could be less than the principal value of the CPF sums withdrawn.

It is not correct to describe the accrued interest on principal sums withdrawn for housing as interest paid to the Government and to equate it to the interest paid on a mortgage. This is because the accrued interest on the CPF savings withdrawn is part of your pool of savings which you will be able to drawn upon in your retirement years. Since the money is returned to the OA, it can also be used to finance your subsequent housing purchases.

It is also strange that in the example Mr Ngerng uses to explain how the value of the accrued interest grows over time, the value of the HDB flat remains the same. In fact, based on the Resale Price Index from 1990 to 2014, a 4-rm HDB flat purchased 24 years ago would be worth about 6 times its purchase price today. This would mean that Singaporeans selling their flats today would very likely enjoy cash profits on top of any CPF sums that would have to be returned to their CPF accounts. In addition their CPF savings would have grown and they would be in a much stronger position to meet their retirement needs.

The article also questions why the Minimum Sum has been increasing annually and why these increases are higher than the inflation rate. It alleges that the reason for doing so is to allow the government to retain more CPF monies in order to earn more from its investments.

This is not true either. The MS increases are necessary for two reasons:

1. Since 2003, the MS has been growing from $80,000 to reach a target of $120,000 in 2003 dollars in 2015. The increase in real value caters to Singaporeans’ rising expectations of what is considered a basic standard of living in retirement. (For similar reasons, from 1995 to 2003, the MS was increased from $40,000 to $80,000.)

2. The MS also increases with inflation to preserve its purchasing value.

The MS is not sized based on the government’s desire to retain more CPF monies in the system. Rather, it is sized to provide for basic retirement needs. If you have the full MS in cash at age 55 today ($148,000), the payouts that you receive from draw-down age should be able to cover the expenditure needs of a two-member retiree household in the 2nd quintile (in other words, between the 20th percentile and 40th percentile of households).

The article further claims that “you will never have enough in your CPF and will never be able to retire”. Yet, if we look at MS attainment rates, the figures are more encouraging. Among active CPF members who turned 55 in 2013, about 49% met their Minimum Sum in cash and property pledge – a significant improvement from 38% five years ago in 2009. For today’s new entrants who contribute to the CPF consistently, we expect that about 70% will be able to attain the inflation- adjusted MS fully in cash savings, if they make prudent housing choices.

An Illustration of some Misleading Points in the Article

In addition to the arguments above, several of the other pieces of data used in the article are erroneous, outdated or misleading. We have tried to explain this in the following examples:

1. Chart 1 misleads by suggesting that members’ CPF savings have gone missing.

He claims that a median income earner should have accumulated $700,000 in his OA and SA account by the age of 55, and questions why this is not happening. In doing so he seems to suggest that Singaporeans are being short-changed because they are not accumulating as much in retirement savings as they rightfully should given the CPF contribution rates.

The chart is misleading. First, many Singaporeans do not have such high balances in their CPF accounts because they have withdrawn a large part of their CPF savings for housing. This means that even though the money from an individual’s CPF contributions does not sit in his CPF account, it has been used effectively to secure a roof over his head and gain an asset that can appreciate in value over time. This is a good thing, as in many other countries retirees must worry about paying for rentals out of their retirement income because they cannot afford to own housing.

Second, in an MOM-commissioned occasional paper on retirement adequacy done by NUS and published in 2012, we take into account housing withdrawals so we can get a more realistic picture of retirement balances. This then enables us to determine what a reasonable contribution rate might be to help most Singaporeans accumulate enough in their CPF balances to meet their retirement needs.

2. References to international studies are outdated.

Charts 2-4 refer to several overseas studies and their conclusions on the adequacy of Singapore’s pension system. His references are in some cases outdated. For example, he refers to the 2011 OECD

page2image28280 page2image28440 page2image28600

Pensions at a Glance Report. In fact in the there are more recent versions of these reports with updated figures on the level of retirement adequacy provided by the CPF system. In the latest OECD report published in 2013, Singapore’s reported net Income Replacement Rate has increased from 16% to 42% after OECD took into consideration that OA savings also contribute towards retirement income.

3. Singapore’s social security contribution rates are high, but they include contributions that can be used to provide for housing and healthcare, in addition to retirement.

Chart 6 refers to Singapore’s social security contribution rate as being one of the highest in the world. However, the comparisons are inaccurate because the social security contribution rates of other countries are meant exclusively to provide for pension benefits in retirement. In Singapore’s case, the 37% overall contribution rate includes contributions to the Ordinary Account which can be used for housing and the Medisave Account to meet healthcare needs. These are unique features of Singapore’s social security system where the Government has provided an avenue for Singaporeans to save to meet these critical expenditures, and these monies can be used even before reaching retirement. Only the contribution to the Special Account is ringfenced for retirement needs and the maximum SA contribution rate is 9.5%.

4. Chart 9 misleads by suggesting that the Government is paying 2.5% on all CPF savings. Chart 9 also compares the returns on pension funds in several other countries.

The 2.5% interest rate quoted for Singapore is the minimum return that is provided on OA balances because OA funds are liquid and can be withdrawn for housing. The return on the SA and MA account currently stands at 4% and an extra 1% is provided on the first $60,000 of CPF balances to boost the savings of lower balance members. Monies in the Retirement Account and the CPF LIFE fund also earn 4% interest.

In the recent Budget Debate the Ministry of Finance provided some important considerations that we must bear in mind when comparing returns on CPF funds with returns on other pension funds.

First, such returns must be looked at in the context of the performance of domestic currencies. Interest rates are typically higher in countries whose currencies have tended to depreciate over time because higher interest rates compensate for weaker currencies. Second, pension funds abroad especially in emerging markets, are predominantly invested in their domestic capital markets and are exposed to market risk in those markets. Should the markets underperform, Governments may find they are unable to deliver on their obligations to pensioners. This has happened to several pension funds and has led to uncertainty for pensioners and the need to undertake significant structural reform to pension systems.

[leesg123]

Another stirrer.

[minority]

auyiah these days all would like to mislead people. Coz there are people who wished to be mislead. coz Truth they don't want to believe mah.

[minority]

cpf is good for those who do not know how to invest and I support it.
for those who know how to invest, they will not like cpf as they claim that they can make more money than the 2.6% CPF pays..
if everybody claim that they can make more money by investing on their own and if they lose money in the end, who do you think they will blame?

people will blame gov for not setting up policing to prevent this and that...

so I agree with your post.. cpf generally is good for the public...
even I now know how to invest and surely can make more than 2.6%, i still support cpf because i dont want gov to use tax payer money to feed the bankrupt, the poor who lose all their money in crisis like the lehman, 2011.. etc

totally agree with this. but there are people out there writing articles like these trying to deceive many ignorant people.

[minority]

this is the most funny part of the article

If you’ve decided to attend the event, do pledge a $1 commitment to attend this event. Each pledge will be used for the event. We hope that more Singaporeans would take a stand and come together in a show of unity to let others know that it is time we will no longer allow our rights to be abused right in front of our eyes. We need to take our country back. You can transfer your $1 by ATM, Internet banking, or cheque, etc, to POSB Savings Account No. 279-12328-0.

should like gilbert need $$$ to buy his kopi.

[metta]

Can someone please enlighten me on how much truth is there in the para below from the article by Roy Ngerng? This really scared the hell out of me!! Thank you in advance.


Now, note that the CPF accrued interest I’ve shown you so far is only at the 30-years mark. But do you know that as long as you do not pay this CPF accrued interest back to the CPF, this accrued interest just keeps growing

So it doesn’t stop there.

Most people never know about this CPF accrued interest, so they wouldn’t have paid “back” this accrued interest and so, this CPF accrued interest would keep growing. In fact, you most likely would only see any mention of this “accrued interest” on the CPF website which informs you of what you need to pay back when you sell your house.

If the accrued interest keeps growing until the 40 year mark, it would have grown to $396,339, or more than the stated value of the flat of $300,000!

And after 50 years, it would have grown to $621,051, or more than twice the stated value of the flat (Chart 19)! Now do you know why most Singaporeans would never be able to retire?



Chart 19

Let me give you a bit of perspective. Initially, you had thought that together with the mortgage, you are only paying $405,960 for the flat right? But when you add in the CPF accrued interest of $220,795 at the 30 year point, the total amount that you are actually paying for your $300,000 flat would be $626,755.

So, after the 30 year point, your mortgage would have ended but you still have to continue to pay because the CPF accrued interest keeps increasing and increasing non-stop! After 50 years, your $300,000 flat would cost $1,027,011 (Chart 20)!

The “mortgage” never ends! The PAP has devised an insidious scheme to make you keep paying (without you knowing) so that your CPF keeps dwindling (for their use).

[taggy]

CPF accrued interest = the amount u should have earned from CPF if u had not withdraw it for your properties, it doesn't matter to you if are not selling away the properties.

if you do sell away your property, you must use your proceeds to refund this accrued interest into your CPF Ordinary acct. This money is still yours and can be used for further property purchase or investment.

if your proceeds is not enough to cover the CPF accrued interest, you do not need to come out with extra cash to meet the accrued interest amount.

In theory, CPF accrued interest will keep growing as mention above, 30yrs, 40yrs, etc.
But in practical, you can choose to withdraw CPF at 55 yrs old.
So, at age 55, CPF accrued interest amount become irrelevant.

[wt_know]

if the sale of hdb proceeding is not enough to cover the accrued interest, will it stop there?

ie: some years later, buy another property and sell, will the sales proceeding (assuming make money) require to cover the previous "shortfall" of accrued interest? ie: accrued interest clawback?

CPF accrued interest = the amount u should have earned from CPF if u had not withdraw it for your properties, it doesn't matter to you if are not selling away the properties.

if you do sell away your property, you must use your proceeds to refund this accrued interest into your CPF Ordinary acct. This money is still yours and can be used for further property purchase or investment.

if your proceeds is not enough to cover the CPF accrued interest, you do not need to come out with extra cash to meet the accrued interest amount.

In theory, CPF accrued interest will keep growing as mention above, 30yrs, 40yrs, etc.
But in practical, you can choose to withdraw CPF at 55 yrs old.
So, at age 55, CPF accrued interest amount become irrelevant.

[taggy]

if the sale of hdb proceeding is not enough to cover the accrued interest, will it stop there?

ie: some years later, buy another property and sell, will the sales proceeding (assuming make money) require to cover the previous "shortfall" of accrued interest? ie: accrued interest clawback?

Q:Both my co-owner and I are selling our property with insufficient sale proceeds for the full CPF refunds to our CPF accounts. How much do we need to refund?
A: If you sell your property at or above its current market value and the selling price is insufficient to repay the outstanding housing loan and full CPF refunds required, we will allocate the proceeds between your co-owner’s and your CPF account, as follows:

( Your CPF P+I* / All owners’ CPF P+I* ) x Net sale proceeds^

( Your co-owner’s CPF P+I* / All owners’ CPF P+I* ) x Net sale proceeds^

You and your co-owner do not need to top up the shortfall in cash as long as the property is sold at or above its current market value.

* P+I refers to the CPF principal amount withdrawn for the property and its accrued interest.
^ Net sale proceeds refers to the selling price less outstanding housing loan

[metta]

CPF accrued interest = the amount u should have earned from CPF if u had not withdraw it for your properties, it doesn't matter to you if are not selling away the properties.

if you do sell away your property, you must use your proceeds to refund this accrued interest into your CPF Ordinary acct. This money is still yours and can be used for further property purchase or investment.

if your proceeds is not enough to cover the CPF accrued interest, you do not need to come out with extra cash to meet the accrued interest amount.

In theory, CPF accrued interest will keep growing as mention above, 30yrs, 40yrs, etc.
But in practical, you can choose to withdraw CPF at 55 yrs old.
So, at age 55, CPF accrued interest amount become irrelevant.

[/I]

If i leave the property to my child after i pass on and he decides to sell it for whatever reason, can he pocket all the cash from the transaction? or will be taxed heavily because of the so called accured interest? thanks very much.

[taggy]

[/I]

If i leave the property to my child after i pass on and he decides to sell it for whatever reason, can he pocket all the cash from the transaction? or will be taxed heavily because of the so called accured interest? thanks very much.

Yes. He will get all the Net sale proceeds, nothing deducted due to accrued interest.

[metta]

Net sale proceeds meaning, some money has to go back to CPF? BUt i'm already gone, so who's CPF account would it go to? apologies for my ignorance and thank you for your patience.

Yes. He will get all the Net sale proceeds, nothing deducted due to accrued interest.