Let us ride our own CPF bike

August 16, 2005
Singapore Democrats

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TODAY
16 Aug 05

Contributing to the press is hardly my style, but the article Today ran on Friday about the four social activists campaigning for CPF reform

compelled me to respond.

So, rather than get myself arrested for being a public nuisance, I write
to you, today (pun intended).

Firstly, I deplore the way the four were treated by the police. Heaven
knows I have met pushy tissue sellers, commission-hungry fundraisers and flippant smokers around Raffles Place – all of whom I consider a larger “public nuisance” than four people driven to the streets to express their desire for change.

Non-violent social activism is a healthy part of any self-proclaimed
democracy and epitomises the freedom of expression that defines such a system of government. Perhaps the only nuisance they were guilty of was to question government policy.

Furthermore, I truly feel that the CPF is a system in need of reform.

The bone of contention is not the rationale behind a compulsory savings
system but the structure in which our money is locked up.

The minimum sum requirement ensures that most CPF members will only see their $120,000 (a huge sum for most) as distant stars at night – only small glimmers in the form of monthly annuity payments after the age of 62.

I sympathise with those who find themselves in financial difficulties but
who cannot draw a dime from their vault of compulsory savings.

But more importantly, I want the freedom to choose.

The statistics have been fed to us many times over. Left to the general
public, their investment decisions generally fail to outperform the 2.5
per cent offered by the CPF Ordinary Account.

But, like teaching a child to ride a bike, if we as parents never let go,
will they ever learn?

Allowing CPF funds to be invested in unit trusts and CPF-approved
securities are the “training wheels” and, of course, a little “wobbling”
is unavoidable.

Over the long run, equities trump any alternative form of investment; the most severe losses stem from the “post-humous” discovery of corporate fraud, not economic recessions, which are cyclical in nature.

I am not asking to dissolve the CPF, but merely wish for autonomy over our money. The risk-averse should continue to keep their money in the CPF.

With the current restrictions and limited stocks to select from, perhaps
the blame must be shared by regulators who approved these underperforming stocks/unit trusts?

But if we are the masters of our own destiny and we fail, we will have
only ourselves to blame.

A recent survey showed that most young Singaporeans lack financial
planning, and I have no doubt the monetary coddling of the CPF system
contributes to that fiscal apathy.

By throwing us in at the fiscal deep end, we may finally sit up and take a proactive approach to learning about managing our financial matters.

If such a policy sparks a wave of interest that floods us with young
investment professionals, transforming us into Asia’s financial hub, then
it is all too welcome a side-effect.

As was quoted in Henry David Thoreau’s work, Civil Disobedience, “That
government is best, which governs least”. I write this letter in the
spirit of nationalism and the hope of a better tomorrow.

Learn to let go, Singapore.

The writer, a reader, begs to add that he is not related to Today
columnist Charles Tan – nor the Charles Tan who was caught outside CPF building.

CHARLES TAN MEAH YANG