Issue 2
The Problem with CPF
CPF is an important area of concern for many Singaporeans. It is an obligatory savings plan for working Singaporeans and permanent residents primarily to fund their retirement, healthcare, and housing needs. Both employers and employees are expected to make monthly contributions to each individual’s CPF account. The monthly contribution amount is mandatory, and determined based on employment and income level. The government policy of CPF has been rather problematic for many reasons. Yet, since it affects one of the one of the largest demographic of the country, it’s important to break down the important aspects of CPF and provide transparency.
The CPF is not a system unto its own, but its impact cuts across Singapore society and the economy. The seemingly simple quest to raise the returns of CPF investments, for one, carries with it implications of risk, government intervention, the use of reserves and fiscal burden, among other things.
Many people are unhappy.
The CPF's high mandatory contribution rates is one of many aspects that sees widespread criticism and debate.
If the majority of the working-age population are under 55 years old and earn above $750, they would have to contribute 20% of their monthly income to their CPF accounts. The issue lies in how large a proportion 20% makes up of their incomes. For someone earning $1000 a month, 20% holds a much larger significance as compared to someone earning $5000 a month. This issue with the contribution rates is a major issue, especially for many low income individuals and families.
We understand the importance of education.
Education with regards to financial management and the CPF schemes should be given the same significance, and everyone should have access to it.
Financial advisor committee
Each grassroot organization should establish a subset group of financial advisors and CPF Board team members that the citizens can book appointments to meet, clarify doubts and obtain information they need and are entitled to in order to make the right decision. As such, before individuals submit a withdrawal request, they should have to provide evidence of relationship, passing, and/or other relevant evidences to their financial advisor who will then help them manage their cases. These financial advisors will be a part of the grassroots organization and should be monitored closely by local security officials to dodge and prevent opportunities for corrupt activities. This personalised system should be able to provide citizens with assurance and more transparency with regards to the monetary flow in their CPF accounts.
Your money is your money.
your money should be yours to have, use, and save.
Individuals should be allowed to name a guarantor or next-of-kin in the event of an accident or sudden passing. This will allow the individual’s family to still retain ownership of the monies that belong to their family member. To remain inclusive, individuals who are distant from their families should be allowed to name a close relative, partner or friend, but such instances should be analysed on a case-by-case basis to protect the system from being abused
In order to ensure that the CPF funds are being competently used by the people, we would like to hold monthly informative sessions and encourage people to visit asset managers so that people are able to better invest their wealth.