There are already quite a lot of articles written by bloggers, Facebook users and internet forummers on this CPF issue. We are beginning to converge to agree on a few fundamental points:
1) Nobody in his right mind would have put money into CPF for its promise of "guaranteed" return of a meager 2.5% to 4% when it could just change the rules on when and how much you could draw your own money anyhow they like without consulting us. If CPF is not compulsory, I don't think anyone with a right mind would want to RISK their money like that.
2) Government guarantee doesn't mean RISK FREE. Yes, please get this right. The only reason why government can give guarantee to CPF is because if everything fails, it can just print money to repay us. However, that will create hyper inflation that will practically devalue our CPF money altogether. So it is NEVER risk free even when it is guaranteed.
3) Returns to our CPF are really understated. We could have invested DIRECTLY into GIC or Temasek Holdings to earn higher returns, instead of going through the government which practically end up making use of our CPF as "National Reserves", invest in GIC and make profits out of these investment. In essence, we have been shortchanged in our CPF returns no matter how we look at it. GIC gave much higher annualized returns of 6.5% to 8.8% for their 20 year and 10 year span. Why are we paid only 2.5% and 4% only? This is in fact a very heavy implicit tax applied on our CPF money's potential returns. i.e. more than 50% implicit tax! Full story
