Student asks the “what if” CPF question

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When things get emotional, one good question to keep in mind is this: What if…

The on-going CPF debate needs that question to be asked and the answer can be illuminating.

A university student stood up at a forum on CPF, organised by the Singapore People’s Party on Saturday, to ask: what would happen if everyone were to withdraw their CPF savings upon turning 55?

Leong Sze Hian, panel member and statistician, said that the country would run into a “liquidity problem”.

“We have about $260 billion in the CPF today. If suddenly everyone above the age of 55 decides to withdraw, then you may have a liquidity problem, because you got to squeeze out a few hundred billion dollars overnight,” he said.

“It would be a disaster for a policy change that is a knee-jerk reaction, where everybody withdraws everything, all at one go,” he added.

Party chairman Lina Chiam agreed.

Leong proposed an alternative where the minimum sum is gradually reduced and where “different cohorts can withdraw at different times”.

Lina Chiam stated her party’s stand on the issue. She said CPF account holders should have the choice and flexibility to withdraw their savings or to opt in to the annuity scheme.

Assistant Secretary-General Loke Hoe Yeong responded by reaffirming the party’s stand that the CPF money belongs to its citizens.

He said: “This is…your money. It’s not mixed with tax from younger people, unlike pension schemes in other countries. So if you withdraw it, it’s still your money,”

He also commented that citizens should have the freedom to withdraw their funds for private investment, to pay for healthcare or to support their children’s education.

“Should we not have a right to decide how we use our retirement funds?” he asked the 40-strong crowd at the forum.

One man, who preferred to remain anonymous, said that it is “irresponsible” to assume that seniors would squander their CPF money on leisurely pursuits the moment they get their hands on their retirement funds. One example of the leisurely pursuits cited was Batam – a tourist destination in neighbouring Indonesia that has become more of a euphemism for indulgences in the pleasures of the flesh.

Leong said that anecdotal evidence of a few who have frivolously wiped out their savings in Batam does not justify the withholding of the CPF for all middle-aged Singaporean men.

He said: “How many people really go to Batam to spend all their money? You didn’t tell me.”

There was an incessant murmur on the ground – even as the panel addressed them – a lingering air of discontentment, although it was placated by Leong’s sense of humour from time to time.

The murmur died down when Secretary-General Chiam See Tong was invited to make his concluding remarks.

He said: “Credibility is important. I know there are many Singaporeans who don’t believe what the government says. So how are you going to trust the government with the CPF issue? Or any other issue?”

“So what’s the solution? Throw out the government.”