Clifford Theseira's predicament sums up everything that's wrong with the CPF system

30 October 2019
Singapore Democrats

When the CPF system was started in 1955, it had a laudable goal – to help workers put a little of their wages aside for retirement.

The current system manipulated by the present generation of PAP leaders have turned the scheme into a nightmare for Singaporeans, and Clifford Theseira's case highlights the problems.

First, the facts as provided by the CPF Board. Mr Theseira had withdrawn a total of about $140,000 over 17 years from his CPF savings since turning 55. He is presently 72. He owns a fully paid up 5-room HDB flat.

To supplement his retirement savings, Mr Theseira says he drives a Grab taxi. He also has more than $50,000 in his Medisave account but is forced to continue to contribute to it, failing which his Grab driver's licence will not be renewed.

This elderly man doesn't seem like the sort who is irresponsible with his finances. After all, he has worked all his life to the point that he has fully paid for his flat. As far as we know, he continues to live with his wife and now drives a taxi even at his age.

But the PAP insists that people like him cannot be trusted with their own savings because they may squander it and then turn to the State for financial help, hence the Minimum Sum Scheme cooked up in 1987 to withhold CPF funds from retirees.

To date, the Government has refused to provide data on how many individuals squander their savings and turn to the state for help. Does the number warrant a blanket punishment for the vast majority of retirees like Mr Theseira who are responsible and astute managers of their own funds and lives?

Or is the Minimum Sum Scheme a convenient excuse to hold on to a vast pool of public funds for the government's benefit?

Another crucial question that the PAP must answer is why at the age of 72 must Mr Theseira and others like him continue to work to support himself and his wife?

The answer, if the PAP cares to admit, is that many retirees are now asset rich but cash poor. In simple words, Singaporeans have had little choice but to use their retirement savings during their working years to pay for their HDB loans.

These loans are often stretched to 25 to 30 years because of the inflated prices of the flats. When they now have to retire, they find themselves with insufficient savings.

In the meantime, the PAP government sits on reserves estimated by some sources to be $1 trillion. Much of these funds have been derived from the government selling land to HDB buyers, land which it paid little or nothing for.

Mr Theseira also laments the fact that he has to continue to pay into his Medisave account when he already has close to $60,000 in it.

This is another way in which the PAP financially bleeds the people. Medisave sits on reserves of about $90 billion. It pays out annually around $900 million from patients' accounts – that's approximately 1% of the total quantum it holds!

Part of the problem is that the PAP continues to treat our healthcare system as a profit-driven industry with our public hospitals built and run like 5-start hotels with all the unnecessary costs and expenses that come with these trimmings.

Retirees like Mr Theseira ought to be living out their retirement years with security and peace of mind after having worked a lifetime to raise their children, be good employees, and help build the country. Instead, because of the distortions in the CPF scheme, they now find themselves fighting for their survival.

An HSBC report said that Singapore is one of the toughest countries to retire in with 30% of pre-retirees saying that they will never be able to retire fully, compared with 18% globally. 

This situation cannot continue, and the SDP is determined to rectify the problem when we get into the next Parliament.