CPF SA Shielding hack - RIP (Obsolete)

[QinWei]

invesmts are meant for all humans
no matter how lowly their income is


big fish do big acts

Small investors, invest on shrimps, this is Life

the more Low-incomer must get to their act, anyone disagree with it?

 

[QinWei]

Endowus offer index funds. Why need to think so much?

So what if it's without mainstream bank protection? That should be the expectation for investment products. No protection.

If you want protection keep it in cpf then.

tks for telling them

i assumed u r not telling me, i dont have to:


i noticed alot are not even willing to part their funds without mainstream banks' protection
eg some funds /FDs is insured by the SDIC for up to only certain amt or not ..... Syfe yes
Edwus has many pdts but Cash Smart is an investment product and not a bank deposit, it is not insured by the SDIC too...

i m puzzled why to?

 

[elvintay07]

Seems like got chance for reversal?

 

[fr33d0m]

It will be a laugh stock for the educated tax payers if they reverse it.

it just means more tax from tax payers, which they pay for but will not get to enjoy

 

[Jov1623]

It will be a laugh stock for the educated tax payers if they reverse it.

it just means more tax from tax payers, which they pay for but will not get to enjoy

Very unlikely will reverse

 

[BBQ99]

They pass motion already. including the some MP who raised the issue also support

 

[reddevil0728]

Around 720,000 CPF members have money in their Special Accounts that can be withdrawn: Tan See Leng​

The median amount of their withdrawable funds is about S$2,000.

SINGAPORE: Close to 720,000 Central Provident Fund (CPF) members have funds in their Special Accounts that can be withdrawn, with a median balance of around S$2,000 (US$1,490).

These are the CPF members who may experience some loss in liquidity when their Special Accounts are closed, said Manpower Minister Tan See Leng on Monday (Mar 4).

Speaking in parliament to lay out his ministry’s spending plans for the year, Dr Tan denied that the government was aiming to save on interest payments to members by closing the accounts next year for those aged 55 and above.

“It is a matter of principle ... it is not about savings costs for the government,” he said.

​

The move, announced by Deputy Prime Minister and Finance Minister Lawrence Wong at Budget 2024, drew strong reactions online, with many questioning its timing.

Some lamented the lower interest rates of the Ordinary Account, or the limited liquidity of the Retirement Account.

On Monday, Dr Tan reiterated that savings with higher liquidity should not earn high interest rates.

“The core principle behind closing the (Special Account) is to ‘right-site’ CPF monies, such that only CPF savings committed for long-term retirement earn the higher long-term interest rate,” he said.

During an earlier media briefing, the Manpower Ministry also described earning high interest rates on liquid funds as a “free lunch”, and noted that this problem could grow if the government did not take action.

Responding to a suggestion by MP Foo Mee Har (PAP-West Coast) to allow existing members above the age of 55 to keep their Special Accounts open, Dr Tan said this would inadvertently create a generational divide.
Older Singaporeans would benefit, while younger generations would be disadvantaged, he said.

Those who will be affected by the closure of CPF Special Accounts are also relatively high-income earners.

Dr Tan said only 8,400 members – representing less than 1 per cent of all members 55 and older – will not be able to fully transfer their savings to their Retirement Accounts.

More than 99 per cent of members will still be able to earn higher long-term interest rates.

CPF'S OBJECTIVE​

The CPF system was meant to provide income in retirement, and support housing and healthcare needs along the way, Dr Tan said.

Those are the core priorities, but the evolution of the system was necessary because Singaporeans can now afford to set aside more in their accounts compared with when CPF was first introduced.

The number of members voluntarily topping up their accounts has more than doubled from 2020 to 2022, Dr Tan noted.

Many would like to save more than the Full Retirement Sum, he said. “Some hope for higher investment returns, others hope to leave a bequest.”

“The number and proportion of CPF members with withdrawable Special Account balances has also increased and will continue to do so,” he added.

Dr Tan also addressed a question from MP Louis Chua (WP-Sengkang) on why interest earned on CPF Life is pooled together and not paid to beneficiaries when a member dies.

The minister said risk-pooling is necessary because CPF Life provides members with lifelong monthly payouts even if they outlive their savings.

“Members need to be clear about what they are getting with their (Retirement Account) savings. CPF Life is a form of insurance, it is not an investment vehicle,” he said.

Dr Tan also noted that members are required to start drawing down their CPF savings at the age of 70, which he said shows that the government is not locking up members’ savings.

“Some members have written to me, requesting to defer their payout start age to beyond 70 years old. But it is not possible. We want members to enjoy their hard-earned monies by that age.”

Source: CNA/an(kg)

https://www.channelnewsasia.com/sin...t-closure-interest-rates-tan-see-leng-4168816

 

[s0crates]

"The minister reiterated that, if implemented, LRIS would introduce a new element of risk for retirees.

“But having said that, regardless, we will continue to study the LRIS proposal and work on making the CPF system even better for Singaporeans,” he added."

https://www.todayonline.com/singapo...-higher-returns-bequests-tan-see-leng-2375021

Excuses again. Give us details about what you are studying. Study for 8 years already still study. Don't want to do just say.

 

[chiokcc]

Dr Tan said only 8,400 members – representing less than 1 per cent of all members 55 and older – will not be able to fully transfer their savings to their Retirement Accounts.

what does the above mean? 8400 members able to hit ERS when their remaining SA is transferred to RA with cash in SA to spare???

 

[lzydata]

what does the above mean? 8400 members able to hit ERS when their remaining SA is transferred to RA with cash in SA to spare???

720,000 members have monies in their SA with median balance $2k, of which 8400 will still have money left over after transferring money to their RA up to the enlarged ERS (4x BRS). So the remaining money must either go to their OA or be withdrawn.

If the problem is defined in this way, obviously it only affects those with A LOT of SA money.

What I am not so clear about is, if the member has a balance in his SA but does not meet the FRS (or BRS with property pledge) - maybe because he did SA shielding - does he still have a choice not to meet the FRS and instead withdraw his SA monies? Or will some be transferred to meet the FRS?

Update: answer from CPF Board: "SA savings will be transferred to your RA, up to your Full Retirement Sum (FRS)."

https://www.cpf.gov.sg/member/faq/r...ove--what-will-happen-when-my-special-account

 

[BBCWatcher]

what does the above mean? 8400 members able to hit ERS when their remaining SA is transferred to RA with cash in SA to spare???

It presumably means that among CPF members currently age 55+ there are about 8,400 that have Special Account balances exceeding the gap between their current Retirement Account balances and the 2025 Enhanced Retirement Sum (ERS).

As it happens one of these ~8,400 lucky people is a member of my household.

 

[KeytoFreedom]

"The minister reiterated that, if implemented, LRIS would introduce a new element of risk for retirees.
“But having said that, regardless, we will continue to study the LRIS proposal and work on making the CPF system even better for Singaporeans,” he added."
https://www.todayonline.com/singapo...-higher-returns-bequests-tan-see-leng-2375021
Excuses again. Give us details about what you are studying. Study for 8 years already still study. Don't want to do just say.

agree....pls come up with a complete plan before shutting all our SA accounts....if govt want to shut , should give us an option to withdraw or transfer to RA, should not just force the transfer to RA



Read HWZ Forum Rules!

 

[BBCWatcher]

agree....pls come up with a complete plan before shutting all our SA accounts....if govt want to shut , should give us an option to withdraw or transfer to RA, should not just force the transfer to RA

There are no new SA to RA transfers, not really. The CPF Board already automatically transfers SA dollars (and unreserved OA dollars too if necessary) into RA for those members who didn’t meet the Full Retirement Sum (or Basic Retirement Sum with property pledge/charge) when their Retirement Accounts were opened on their 55th birthdays. They transfer those dollars just before payouts start and until the FRS (or BRS) is met or until the dollars are exhausted, whichever comes first. The CPF Board will keep doing that as/when necessary, and when Special Accounts are closed in early 2025 it will follow the same practice just for the SA dollars.

In other words, those SA dollars up to the FRS (or BRS with property pledge/charge) are already destined for RA. The CPF Board is just executing that part of the transfer earlier for some members. That may in turn influence how much interest is earned and kept in RA, but the nature and amount of these SA to RA transfers are not fundamentally different from standard practice.

If the CPF Board transferred all SA dollars to OA even for members that haven’t met the FRS (or BRS) yet then probably hundreds of thousands of members would simply lose interest.

If you want more SA dollars (above the FRS or BRS) to end up in RA then you have to take specific action.

 

[elvintay07]

Those who voice out all wayang only la. They not minister mentor LKY. They talk probably ppl just listen for the sake of listening. Opposition I think worst la. Most fall asleep.

Beng will say 70% vote for them. Haha

 

[celtosaxon]

With the CPF changes, there seems to be a stronger argument for pulling everything out at 55 (except FRS+BHS) and just invest it on your own. Not necessarily a bad thing for investors who know what they are doing.

 

[sglandscape]

With the CPF changes, there seems to be a stronger argument for pulling everything out at 55 (except FRS+BHS) and just invest it on your own. Not necessarily a bad thing for investors who know what they are doing.

But very bad for those who are risk averse or do not know what they are doing and end up buying an ILP.

 

[DevilPlate]

But very bad for those who are risk averse or do not know what they are doing and end up buying an ILP.

At that age, FA shd be advising them to buy annuity plans.

 

[fr33d0m]

At that age, FA shd be advising them to buy annuity plans.

which is to continue to top up RA to ERS and people complain that government does not care....

they would rather give their money to their FAs for low value investment product than to top up RA for their own benefit....

typical behavior of crying over spilled milk rather than thinking of the next best alternative...

 

[gold_eagle36]

With the CPF changes, there seems to be a stronger argument for pulling everything out at 55 (except FRS+BHS) and just invest it on your own. Not necessarily a bad thing for investors who know what they are doing.

Actually the strategy should be to invest all your OA be in properties or equities as early as possible and as much as possible as the SA pool is now the "conservative" allocation which can be flexibily put into ERS come 55. At 55, slowly derisk the "OA" investments and take liquidity from there.

 

[BBCWatcher]

Actually the strategy should be to invest all your OA be in properties or equities as early as possible and as much as possible as the SA pool is now the "conservative" allocation which can be flexibily put into ERS come 55. At 55, slowly derisk the "OA" investments and take liquidity from there.

IMHO OA to SA (and to RA for older family members) transfers are probably the overall first and best option in investment terms.