tag:blogger.com,1999:blog-4405345292513335071.post6488299023295943114..comments2024-03-19T18:44:15.041+08:00Comments on Little Stories: On CPF, Life, Work and RetirementGilbert Koh aka Mr Wanghttp://www.blogger.com/profile/01027678080233274309noreply@blogger.comBlogger65125tag:blogger.com,1999:blog-4405345292513335071.post-5759979452540193052007-09-07T20:19:00.000+08:002007-09-07T20:19:00.000+08:00Robert:Don't get excited. You have your own view, ...Robert:<BR/><BR/>Don't get excited. You have your own view, I have mine. Personally I'm not terribly excited about this topic at all, and I have no emotional investment in it - because for myself, I plan to retire at 40 or 45; and my financial plans obviously have to be quite different.<BR/><BR/>Your comment about no one else other than Singapore having such an annuity scheme is quite silly. After all, in the first place, no one else other than Singapore even has something like our CPF scheme.Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-84343210609782159232007-09-07T19:50:00.000+08:002007-09-07T19:50:00.000+08:00Dear Mr WangGee, Mr Wang, of course it's mathemati...Dear Mr Wang<BR/><BR/>Gee, Mr Wang, of course it's mathematical. It's also mathematical that nobody in this whole planet has bought an annuity that starts payout only at age 85 and confiscates his savings if he dies before age 85. Out of perhaps half a billion people who have bought annuity plans on this planet, not a single one has chosen such a plan. That is a mathematical zero. These half a billion people cannot be all wrong, can they?<BR/><BR/>Gee, Mr Wang, you think you're right and these half a billion other people on this planet are all wrong? It's all so nice to talk of mathematics, when the reality is that it's mathematically zero. <BR/><BR/>When are you going to admit that you've taken the wrong side of the debate?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-36612162436450778642007-09-06T09:37:00.000+08:002007-09-06T09:37:00.000+08:00The older you have to be to start receiving annuit...The older you have to be to start receiving annuity payouts, the cheaper the cost of purchasing the annuity. It's a mathematical relationship.Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-59423507571884647562007-09-05T22:21:00.000+08:002007-09-05T22:21:00.000+08:00Dear Mr WangYou said, "What this shows is that it'...Dear Mr Wang<BR/><BR/>You said, "What this shows is that it's a matter of figures. You think that xxxx is too high, (funny - the government hasn't even indicated what xxxx will be) and you think that the age of 85 years is too old, and you think that a payout of $350 is too low."<BR/><BR/>Alas, it's not just me who thinks like that. How many billions of people are there in this world? Annuity is a very common financial tool, but I dare say that not a single person in this whole universe has bought himself an annuity that freezes his wealth until he reaches 85 years old, and then confiscates it if he dies before that age. Come on, you name me one single person who bought such a policy, and I'll eat my words. Out of the billions and billions of people in this world, you name me just one person who chooses to do that.<BR/><BR/>And if not even a single person out of the billions and billions in this world has done that, please don't tell me "you think like this and you think like that..." The fact is that everybody who's not braindead thinks like that.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-48032475932690663002007-09-02T23:24:00.000+08:002007-09-02T23:24:00.000+08:003rd World Savings, 1st World Cost of LivingIt has ...3rd World Savings, 1st World Cost of Living<BR/><BR/>It has been argued strongly that elderly Singaporeans are not saving enough, despite the CPF scheme. This is hardly surprising. <BR/><BR/>The CPF was introduced in 1955 when Singapore was a Third World colony. Our per capita GDP (at current market prices) in 1960 was S$1,306. This figure rose significantly to S$13,725 in 1983 and to S$35,552 in 1996. Today Singapore is a First World nation and this is well backed by our 2006 per capita GDP figure of S$46,832. <BR/><BR/>The transformation of our country has led to rapid increase in the cost of living as suggested by historical Consumer Price Index (CPI) data. Using 2004 as the base year (=100.0), the CPI was 31.9 in 1961 (1960 figure not available), 74.7 in 1983, 94.3 in 1996 and 101.4 in 2006. (Source for statistics: http://www.singstat.gov.sg/)<BR/><BR/>Senior Singaporeans played individual minor, but fundamental roles in driving this economic miracle. Back in the 1960s, through the 1990s, they probably could not have imagined, how with hindsight, their salaries, by the same token their CPF savings, will appear so meagre today. Likewise they would not have expected the cost of retirement to be so expensive. <BR/><BR/>It appears that the pioneer generations of Singaporeans have become victims of their own hard work and success. Having earned Third World wages and made Third World savings in their younger days, they suddenly find themselves living, and dying, under the weight of First World costs. <BR/><BR/>Over the years Singapore has accumulated substantial wealth, including those made through investments worth millions by the GIC and Temasek Holdings. No one guarantees workers above 62 will find good paying jobs and the proposed compulsory annuity’s payout of $250 to $300 is a drop in the ocean by today’s costs of living. While we applaud our government’s initiatives to stretch our retirement savings, it is high time we tap on our riches to help those with inadequate CPF monies to overcome the disparity of Third World savings, First World costs. <BR/><BR/>It is increasingly urgent for the government to lower the cost of living for retired Singaporeans. This could be done by co-paying for their essential expenses, such as medical, healthcare and public transport. This should not be viewed as pouring resources into a bottomless pit. Just as government investments into the economy through mega-projects like the IRs and hosting of F1 are now rewarding handsomely, investments into such schemes will generate the economy and the welfare of our people.<BR/><BR/> The CPF Board website states “CPF ensured that workers could support themselves with dignity in retirement”. Would the government play its part to fulfil this?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-87601502998749591112007-09-02T21:36:00.000+08:002007-09-02T21:36:00.000+08:00I too agree with PM Lee's view.The irrational fear...I too agree with PM Lee's view.<BR/><BR/>The irrational fear of the masses comes about because of Singaporeans experiences with past policies.<BR/><BR/>I have no doubt that these policies are crafted with good intentions.<BR/><BR/>Implementation by various levels of bureaucracy may distort or amplify these intentions.<BR/><BR/>For example<BR/>Camp CO gives RSM order for parade square to be cleared of leaves.<BR/><BR/>RSM gives SSGT order for parade square to be cleared of leaves and dirt.<BR/><BR/>SSGT gives CPLs order for parade square to be cleared of leaves and dirt and washed.<BR/><BR/>However, I must also add that the blogosphere has been very effective in bridging this 'affective' divide. It would not be a surprise if blogosphere is a staple read for 'PATT' (People At The Top).Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-30958748327543032232007-08-30T17:35:00.000+08:002007-08-30T17:35:00.000+08:00Heheh, no wonder you're worried. But I really don'...Heheh, no wonder you're worried. But I really don't think the annuity would cost that much. In today's dollars, my guess would be that it would be far below 100k, possibly below 10k, and unlikely to be above 20k. It would be cheap because (1) everyone has to participate, and the more participants there are, the cheaper it would be, (2) the payouts are deferred for many years, and (3) the payouts are not meant to be large, just enough to meet basic living expensesGilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-30072788417027860592007-08-30T16:50:00.000+08:002007-08-30T16:50:00.000+08:00Mr Wang, your example:"Everyone must buy an annuit...Mr Wang, your example:<BR/><BR/>"Everyone must buy an annuity. It costs [$1,000]. This will be deducted at age [62]. If you live to age [65], you will start getting monthly payments of $200 per month, for as long as you live. By age [66], you would have gotten $1,200, more than your original $1,000. If you live to age [67], you will already have reaped substantial profits.<BR/><BR/>In your example, it is true that getting $200 for 1 year will make up for more than then the original $1000 paid to the insurance company for the annuity one is forced to buy. However, you seem to have forgotten to consider the balance of the CPF amounts which has to be surrendered to the insurance company. And this amount surely far exceeds $1000, $10,000 or maybe even $100,000.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-24893717001827440302007-08-30T10:57:00.000+08:002007-08-30T10:57:00.000+08:00"Also, personally I believe that most likely the a..."Also, personally I believe that most likely the annuities will be structured and managed by insurance companies (just like compulsory motor insurance) so I don't think the government will make any money out of it."<BR/><BR/>Dear Mr Wang,<BR/><BR/>If it is going to be big money involved, I have my doubts if govt will allow any tom dick or harry insurance company to take over. Th risk, including political risk is just too high. If govt does decide to give it to a commercial unit, it is very likely to be one with close link to it. Your guess is as good as mine. Who knows govt may even incorporate an insurance company or similar establishment to handle it. <BR/><BR/>Surely, we must have learnt something from the AIA debacle? The govt cannot tell CPF members it just too bad when many are against money being taken from them without a choice.georgehttps://www.blogger.com/profile/09763865075090295355noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-43557128813411106342007-08-29T21:35:00.000+08:002007-08-29T21:35:00.000+08:00From Under The Willow Tree - there is a useful com...From <A HREF="http://utwt.blogspot.com/2007/08/compulsory-annuity-scheme-around.html" REL="nofollow">Under The Willow Tree</A> - there is a useful compilation here of bloggers' views about the annuity scheme and other CPF changes.Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-15585656928279876272007-08-29T21:01:00.000+08:002007-08-29T21:01:00.000+08:00Well, Robert, maybe you are right. Who knows?But l...Well, Robert, maybe you are right. Who knows?<BR/><BR/>But let's say the annuity is tweaked like this.<BR/><BR/>Everyone must buy an annuity. It costs [$1,000]. This will be deducted at age [62]. If you live to age [65], you will start getting monthly payments of $200 per month, for as long as you live. By age [66], you would have gotten $1,200, more than your original $1,000. If you live to age [67], you will already have reaped substantial profits.<BR/><BR/>Good deal, yes? <BR/><BR/>What this shows is that it's a matter of figures. You think that xxxx is too high, (funny - the government hasn't even indicated what xxxx will be) and you think that the age of 85 years is too old, and you think that a payout of $350 is too low. <BR/><BR/>All these are your own judgments of the numbers, and yes we can argue about the numbers. I, for one, think that it's quite probable that many Singaporeans of my generation will live past 95 (by then, even if you go senile, stem cell technology will enable you to grow a new brain) so of course my views about the numbers are different from yours. <BR/><BR/>But I think that in principle, the proposed idea is quite workable. Also, personally I believe that most likely the annuities will be structured and managed by insurance companies (just like compulsory motor insurance) so I don't think the government will make any money out of it. That is, when your xxxx is deducted, it goes to the insurance company, not the govt.Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-1860417824031483032007-08-29T20:47:00.000+08:002007-08-29T20:47:00.000+08:00Dear Mr WangYou said, "Yours is a more general arg...Dear Mr Wang<BR/><BR/>You said, "Yours is a more general argument which could be made against CPF money in general, not merely annuities. In fact, the total amount contributed to CPF OA, SA and Medisave each year would vastly, vastly exceed the total amt deducted for annuities this year. Not saying that your point has no validity, but surely it's got nothing SPECIFICALLY to do with the annuity idea."<BR/><BR/>I'm sorry, again you're making a comparison that does not fit. You're comparing the compounding funds in "savings" versus "annuity".<BR/><BR/>You are continuing to ignore the fantastic difference between CPF savings and annuity. This is a new kind of annuity, one that is compulsory and that confiscates your money unless you live longer than 85. This kind of annuity has never been found in the world before, because it's plain robbery.<BR/><BR/>In the first case, in your CPF savings, no matter what you argue over the interests compounded, the money eventually gets returned to you or to your beneficiary.<BR/><BR/>In the second case, the huge amounts are confiscated from those many, many citizens who don't live beyond 85. For that matter, you should also concede that even those who live up till 90 are still at the losing end, since drawing their annuity at the age from 85 till 90 would not recover the savings compounded from age 60 onwards. It is the robbing of our savings that bother us, no matter what kind of math they cook up.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-12664726974936805062007-08-29T17:02:00.000+08:002007-08-29T17:02:00.000+08:00Dear Mr Wang,It is fat hope to think govt would re...Dear Mr Wang,<BR/><BR/>It is fat hope to think govt would return you any money it has collected. I am not merely saying that for sake of disagreeing. For a good example, look at the COE - you are not allowed to get your cash back when you scrap your car before 10 years. Instead, you get a piece of paper which entitles you to a 'discount' for your next new car purchase. But if you decide to be a greenie or decide to abandon car ownership altogether, you still cannot get your money back directly from the govt. Instead you are left to your own devices, you have to find a new buyer/broker to take it over from you and in the process get back less than your entitlement because of 'service charge' to the broker. <BR/><BR/>On the $100M hived off the CPF accounts every year, isn't it a fact that govt gets to use it practically FOC? It is not the same as the rest of the CPF which govt has to pay CPF members interest. Even the interest, I am sure paid to members is less than what the govt has actually made with their money. There is no free lunch, remember? <BR/><BR/>It's a relatively free country, I can see your sentiments are for the govt. But I also have no qualms about the govt operating schemes to discharge its responsibilities to the citizens, but it must be open and transparent<BR/>and equitable. The taxpayers are entitled to the earnings govt made with funds collected from taxes which should be poured back and made available for their benefit. I don't see why it must always be argued that the younger taxpayers will have to pay for any scheme to help the senior citizens conveniently forgetting that the billions of dollars held in reserved and invested by the govt came from taxes of the older folks. So they have actually earned their keeps and not dependent on taxes paid on younger citizens.georgehttps://www.blogger.com/profile/09763865075090295355noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-71417384041640614682007-08-29T16:59:00.000+08:002007-08-29T16:59:00.000+08:00So far, i have not read any mention regarding thos...So far, i have not read any mention regarding those who are not working (and will most probably continue not to work) and have not reached the minimum sum. What is expected of this group of people?<BR/><BR/>Anyone has any idea?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-5170796072480775422007-08-29T15:29:00.000+08:002007-08-29T15:29:00.000+08:00In the proposed alternative (compulsory annuities)...In the proposed alternative (compulsory annuities) instead of taxing the young to feed the old, effectively we "tax" the dead (more precisely, those who die sooner)to feed the old.<BR/><BR/>-----------------------------------<BR/><BR/>great idea, if only it were true.<BR/><BR/>taking money from the dead is a non issue. i think dead people don't need the money and could care less.<BR/><BR/>the real deal here is you're taking money from them while they still need it. yes, the xxxx premium.hunguptodryhttps://www.blogger.com/profile/12370398036117346396noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-89631038335945760872007-08-29T13:22:00.000+08:002007-08-29T13:22:00.000+08:00"Dear Mr Wang, the above quote was the last para o..."Dear Mr Wang, the above quote was the last para of your response to me. Is there something the rest of us don't know but that you are privy to?" <BR/><BR/>No. The thing is, we are looking into the distant future. Necessarily we must make assumptions, but then of course the assumptions may not hold true. For example, maybe North Korea will strengthen its nuclear capability, have an all-out war with South Korea, and the radioactive fallout spills over a large part of Asia, leading to lowered life expectancy as large populations of people increase their risk of cancer. So the life expectancy projections would be wrong.<BR/><BR/><BR/><B>"20K citizens will be 'surrendering' xxxx dollars of their CPF to govt for the annuity scheme on reaching 55 years of age. For the sake of discussion lets make this upfront payment $5,000 each (affordable, you would say)." </B><BR/><BR/>See what I mean? I told ya, it's a matter of pricing. If 5K makes you unhappy, who knows, maybe you would be happy at 4K? 3K? 2K? 1K? $500? <BR/><BR/><B>When the first annuity payment becomes due 30 years later, this $100 million would have grown by several folds if govt investors are any good.</B><BR/><BR/>Yours is a more general argument which could be made against CPF money in general, not merely annuities. In fact, the total amount contributed to CPF OA, SA and Medisave each year would vastly, vastly exceed the total amt deducted for annuities this year. Not saying that your point has no validity, but surely it's got nothing SPECIFICALLY to do with the annuity idea.<BR/><BR/><B>How many 90-sters are there worldwide esp. in countries like Japan, known for the longevity of its citizens? </B><BR/><BR/>Ah, Japan. Its life expectancy curves are still not levelling off. Like Singapore, it is on a steady climb upwards. Who knows when it will level off, and when. Maybe it will be 100 years by the year 2040 ... who knows.Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-48931665978584117892007-08-29T12:50:00.000+08:002007-08-29T12:50:00.000+08:00"Other factor is that if more people die earlier (..."Other factor is that if more people die earlier (ie after 65 but well before 85), then xxxx will become lower. So those who think that the govt is mistaken about how long S'poreans will live can be comforted by the thought that xxxx would be lowered if the govt is mistaken."<BR/><BR/>Dear Mr Wang, the above quote was the last para of your response to me. Is there something the rest of us don't know but that you are privy to? <BR/><BR/>Have the govt made any commitment to date or said something to this effect regarding the possibility of the lowering of the paid upfront annuity when the scheme is running. In any case, what about those who have already paid up when they 'came' of age earlier? Will they be refunded/reimbursed or forefited? <BR/><BR/>I have mentioned the laying bare of an annual 'balance sheet' for the scheme for max transparency for all to see because even the simple maths bothers me: <BR/><BR/>Spore's annual birth rate is about or at least 20,000, give and take a few thousands. So 20K citizens will be 'surrendering' xxxx dollars of their CPF to govt for the annuity scheme on reaching 55 years of age. For the sake of discussion lets make this upfront payment $5,000 each (affordable, you would say). This is $100 million of interest-free money being hived off by govt for its purpose EVERY YEAR from year of inception of the scheme. <BR/><BR/>When the first annuity payment becomes due 30 years later, this $100 million would have grown by several folds if govt investors are any good. And in all likelihood only about 50% will survive to 85 years to collect their first payment. How many years beyond 85 will they live? How many 90-sters are there worldwide esp. in countries like Japan, known for the longevity of its citizens?georgehttps://www.blogger.com/profile/09763865075090295355noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-55747423117568357732007-08-29T02:39:00.000+08:002007-08-29T02:39:00.000+08:00Welfare through high tax sure scares plp off. Howe...Welfare through high tax sure scares plp off. However, i tink welfare provides oppotiunities for plp from birth to grave. imagine free education, medical care pension for the old...etc. These r something which $$ cant be used to measure. our govt may seems to disapprove the 'welfare' system widely used in Europe, as they proclaimed it turned people into 'lazy' bums and possible burdens of society. i dun deny nor agree to that. There r laws in sweden which prevent citizens from abusing such welfare according to my swedish friend. looks at Europe GDP. They are among the highest in the world. Productive levels r high too. their people r more of a risk taker than us. Becos welfare systems creates a sense of security within plp to fall upon if things, out of their control, turns out negatively. <BR/>If welfare systems r simply a burden to citizens, y sgporeans still wana go there to work n live? my aunts n some of my friends are good example. <BR/>Welfare system doesnt just give out free education, pensions n such. there are lots more benefits underlying the heavy income tax citizens pay every mth. Maybe the movie 'Sicko' by Michael Moore (available on the net) would be a good documentary, allowing netizens (including Mr Wang) here an in-depth understanding of the benefits of a welfare system. <BR/><BR/>I stayed in Germany for a few mths and was surprised to how plp there r willing to give out half of their income in return for welfare for themselves n their future generations. <BR/>Tot i have not yet live long enough in a welfare state, i do have relatives, and friends who benefited from such systems. <BR/>I hope to have the chance to live in such country in future to judge for myself (rather than simply listening to our govt's criticism)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-84827092541312780062007-08-28T23:05:00.000+08:002007-08-28T23:05:00.000+08:00My mum used to participate in PAP grassroot activi...My mum used to participate in PAP grassroot activities but she has stopped about some years ago when she began to feel disillusioned with the things happening around. The recent Ministers' pay and GST hikes have pushed her to the limit. She now thinks the leaders are not compassionate at all towards the people who support them. They only see profits and economic growth in their eyes.James Chiahttps://www.blogger.com/profile/15300785396852955689noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-20245828137852938552007-08-28T22:57:00.000+08:002007-08-28T22:57:00.000+08:00But robert, one way or the other, you would have t...But robert, one way or the other, you would have to pay. Eg if S'pore adopts welfare system as per europe or australia, it will just have to raise income tax as per europe or australia. Essentially you'll just pay for the over-85s throughout your working years (via higher income tax).Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-48831791708138434472007-08-28T22:52:00.000+08:002007-08-28T22:52:00.000+08:00I believe that most likely, the annuity programme ...I believe that most likely, the annuity programme will be managed by insurance companies and CPF's role will only be as administrator. After all, annuities are traditionally a product offered by insurance companies.<BR/><BR/>You may recall that a couple of years ago, CPF considered a scheme whereby CPF monies would be managed by external fund managers, eg Aberdeen, Fidelity, etc. Scheme never got implemented then, but they are probably considering a variant for annuities.<BR/><BR/>George, your own numerical example referring to "xxxx" dollars as the cost of the annuity clearly shows that it's really a matter of pricing. At some point, "xxxx" will theoretically be low enough to make you very happy to pay for the annuity. <BR/><BR/>How low can "xxxx" go? I don't know, but clearly the more people participate the lower it will go. So if the annuities are compulsory, xxxx will be lower than if they were not.<BR/><BR/>Other factor is that if more people die earlier (ie after 65 but well before 85), then xxxx will become lower. So those who think that the govt is mistaken about how long S'poreans will live can be comforted by the thought that xxxx would be lowered if the govt is mistaken.Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-7432902910502173822007-08-28T21:16:00.000+08:002007-08-28T21:16:00.000+08:00Dear Mr WangI'm sorry but your car insurance compa...Dear Mr Wang<BR/><BR/>I'm sorry but your car insurance comparison just don't fit.<BR/><BR/>In car insurance, the objective is to pay for the damage YOU caused, if you killed somebody else.<BR/><BR/>In annuity, I'm looking after myself. I have given a very simple example where I can look after myself without annuity, by renting one of the rooms of my HDB flat for years and years. This income will never end, until the 99 years of my flat ends.<BR/><BR/>Why should I lose my savings to other people when I have fulfilled the "insurance" requirement in my own way, without surrendering my savings? Don't I have a God-given right to leave my savings to my decendents?<BR/><BR/>Let me ask you again: somebody has to pay for the over-85 years old, but why pick on me?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-112006185016328392007-08-28T19:56:00.000+08:002007-08-28T19:56:00.000+08:00Mr Wang,In Term Insurance, one pays on a monthly/a...Mr Wang,<BR/><BR/>In Term Insurance, one pays on a monthly/annual basis. Such something untoward happens, one can claim according to the terms and condition of the Term Insurance. If you signed up for a $100,000 insurance, you get paid this sum. Cut and dried. The only thing is that you do not accrue anything should there be no claim during the entire term of your insurance- which is usually defined as having reached a certain pre-defined age, eg age 62. <BR/><BR/>In the case of the annuity under proposal, the govt intends to compulsorily lop off xxx or is it more likely to be xxxx sum of dollars AT START from age 55 years, and you only see a miserable few hundred dollars/month 30 or more years down the road, if you are still around, and which you may in all likelihood 'enjoy' for only a few years of (how many more years are you likely to go beyond 85 years before you pass on?). And it is more than likely that at least half of the participants in each 'cohort' will not reach the qualifying age, whatever the longevity forecast).<BR/><BR/>In the case of your 'regular' insurance, you/your beneficiary either have a participating or not participating policy. You get interest on top of your capital sum for the latter and you get back a certain sum, minus the cost of insurance, in the case of the latter. And in fact, if you reach the termination age of your insurance and you are still around you get paid by the insurer.<BR/><BR/>So you can see the VAST DIFFERENCE between buying insurance and 'buying' the govt proposed annuity. In fact, it is not insurance that the govt has in mind, it is govt win, you lose game. As stated in my last post. govt gets millions and millions every year of interest free CPF funds to do as it pleases FOR 30 and MORE years from each cohort of 55-sters. <BR/><BR/>My point is why shouldn't the govt's scheme operate more like a real insurance? As it is the deck is patently stacked against the CPF holder. Why shouldn't the scheme benefit their beneficiaries/dependents? <BR/><BR/>Will the govt undertake to open its books annually to the public on the annuity scheme and lay bare the actual balance sheet/performance of the proposed scheme? Citizens have every reason to mistrust the govt given the lesson learnt from the GIC experience and every right to know what has happened to THEIR hard earned money. <BR/><BR/>It is not a given that future, even the current, govt will not change for the worse. Given the stranglehold it has on politics in this country, it is well neigh impossible for any opposition to take over, except in a red hot revolution, if we can find revolutionary of the calibre of the communist revolution.georgehttps://www.blogger.com/profile/09763865075090295355noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-31049969198155266622007-08-28T18:30:00.000+08:002007-08-28T18:30:00.000+08:00This comment has been removed by the author.Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.comtag:blogger.com,1999:blog-4405345292513335071.post-15369916484811607102007-08-28T18:29:00.000+08:002007-08-28T18:29:00.000+08:00Welfare is not "bad". The real question is whether...Welfare is not "bad". The real question is whether you can sustain it. It is most difficult to sustain in an aging population, because (1) welfare is ultimately paid for by taxpayers, and (2) as the population ages, you have fewer and fewer young workers to tax, and more and more old people to give welfare to.<BR/><BR/>In the proposed alternative (compulsory annuities) instead of taxing the young to feed the old, effectively we "tax" the dead (more precisely, those who die sooner)to feed the old. <BR/><BR/>Key point to note is that welfare always has to be paid for; the question is who bears the burden for whom. Even if govt coughs up money directly, that's still taxpayers' money.Gilbert Koh aka Mr Wanghttps://www.blogger.com/profile/01027678080233274309noreply@blogger.com