At a community event yesterday (22 Jun), Minister in the Prime Minister’s Office and Labour Chief Lim Swee Say came up with a new solution for CPF members to beat inflation.
He told the reporters that the best way for Singaporeans to prepare for retirement is to use less of their CPF money when they are young.
This will ensure the current level of CPF payout can be maintained over time, and not be eroded by inflation, he said.
It’s a strange idea coming from our Labour Chief. Using less CPF money means leaving the money with CPF board, which in the case of OA, will earn only 2.5%. Inflation rate for the last few years already exceeded 2.5% (except last year, which barely covered the 2.4% inflation rate) [Link]:
2010 – 2.8%
2011 – 5.2%
2012 – 4.6%
2013 – 2.4%
In fact, financial experts would advise that to cope with inflation, one should invest their money in assets like commodities or real estates or even inflation-adjusted bonds, whose values will rise together with inflation [Link].
At the event, Mr Lim also shared some of his experience with students. He said policies are not a one-off exercise, but they keep evolving – for example, the CPF policies.
He said that the labour movement has been watching the debate closely, and wants to ensure that what is discussed does not create confusion among workers and union leaders.
“Everyone must remember, first is that CPF is your money, nobody can take that money away from you. You have your money, you have the account, and you receive the statement, the account on a regular basis. So, you know how much money you have in the CPF,” he said.
The labour chief said CPF money is also 100 per cent safe, and is protected against events like the global financial crisis.
He said, “Instead of thinking about whether you can spend your savings in the CPF at the age of 55, I think we should think about how can we help our Singaporeans to continue to remain employed, to continue to earn a good living, continue to have good jobs, and at the same time to continue to contribute to the CPF because the more money they have in CPF, the longer they defer the use of the CPF – this will mean they will have more for retirement.”