Saturday, June 07, 2008
Fishy
Is it just me, or does everyone else also not understand what the hell the CPF schemes are about? Yes, I said "schemeS", not "scheme". Correct me if I misunderstood, but wasn't it originally set up as a form of compulsory savings which you may retrieve
if when you reach 55 years old?
So, I visited the CPF site today. Yes, with all their popping, tumbling, flashing images reminiscent of those free Geocities websites. Assuming you are non-Singaporean, and have absolutely no idea what CPF means or what it's about. You go to the website with just the simplest questions in mind:
1. How much of my wages do I need to allocate to this thing?
2. When can I take it out?
And then you realise that all those popping, tumbling, flashing images give you absolutely no information at all.
After a tiresome hour of trawling through the website, I have gathered thus:
- ~35% of your income is placed into your CPF fund each month
- This amount of money is then split into 3 components - an ordinary account that can be used for housing and investments, a special account that you're not allowed to touch, and an account for your doctor to charge you from when you're ill.
- So assuming you reach 55 without using any of that money, you can withdraw your "compulsory savings", EXCEPT $120, 000 which will be withheld and trickled down to you every month as a steady income until it runs out (or until you die).
But, now there's this other compulsory scheme called CPF LIFE where you pay a premium (much like insurance, yes) to have that withheld money invested to guarantee you a monthly payment until you die, irregardless of how much you have left.
I just find it extremely odd that explanations are made in generalised statements, instead of showing real figures and examples. Surely, given the extreme complexity of the website which seem targeted at people with "5 or even 6 brains", they would think more highly of the mental capabilities of their audience? (I'm sorry - couldn't resist
quoting Carla Bruni!) Take this statement from their FAQ for example:
11. Why must CPF LIFE be compulsory? As LIFE will be part of the Minimum Sum Scheme, there is merit in including all those who benefit from it. For members with adequate balances, it is necessary for the national scheme to be mandatory to avoid deficiencies created through adverse selection and opt-outs. Erm. What exactly is meant by that, pray tell? As an analogy:
Patient's family: "Why must he be put on antibiotics?"
Me: "As antibiotics are part of our treatment, it is important for him to be on antibiotics so that it will be good for him. For patients like him, antibiotics are necessary to prevent complications because of lack of antibiotics."
Oh wow. Brilliant.
Wenky
7:40 AM
0 comments
Post a Comment
