Put CPF concerns to bed with good communication

Put CPF concerns to bed with good communication

SINGAPORE - Barely a year out of university, with next to no Central Provident Fund (CPF) savings to my name and a hefty education loan on my back, thoughts of retirement have been the furthest thing from my mind. Until recently.

That is because whether online, in Parliament or at home, CPF has become the talk of the town.

Interest in the savings scheme has scaled new heights, and with the line between fact and fiction sometimes blurred, there is a need for the Government to speak with more clarity and detail to put concerns to bed.

Last weekend, a residents' dialogue by People's Action Party MP Hri Kumar Nair drew people from outside his ward - including Reform Party chief Kenneth Jeyaretnam.

I thought I came to the CPF party late, weighed down by confusion - how much can I withdraw at 55? Wait, what can I do with my Special Account again? But after Mr Nair's dialogue, I realised that many are unclear about how the scheme works - including retirees the CPF is meant to serve.

No longer the simple retirement savings scheme it was in the 1950s, the CPF has swelled with added responsibilities: the Public Housing Scheme in 1968, which allowed people to use their CPF funds to buy public housing; the Residential Properties Scheme in 1981 to let people pay for private homes with their CPF; the Medisave scheme that allows people to use CPF savings for health care.

The details may all be available from the CPF Board, but it is plain that many CPF members are in the dark about how it all works, what happens to their money and why they have to wait to get their own savings.

The Government is being depicted as tight-lipped on the scheme, holding off on revealing in detail its inner workings.

One senior citizen I spoke to recently said suspiciously, arms windmilling, bag stuffed with printouts on the scheme: "Why can't they tell us clearly how our money is managed?"

Another, a 65-year-old retiree, had no idea about the reasons for a Minimum Sum Scheme or why it works the way it does - with some savings set aside at age 55, to be returned as monthly payouts from age 65.

Complaining that he could not take out all his savings at age 55, he said: "It's like they let you taste a bit of your money. Then they lock the rest away. I'm not happy."

Why isn't a CPF member like him clear about why his money is managed this way, or why it may be in his best interests?

These are questions and concerns the Government should meet head-on. Letting them slide by allows a revolving cast of people to mouth off with a variety of analyses, guesses and wild allegations. It is what has allowed someone like blogger Roy Ngerng - now being sued for defamation after alleging Prime Minister Lee Hsien Loong had misappropriated CPF funds - to become for some the face of CPF frustration.

And with the case going to court, the CPF will have to weather the glare of public scrutiny in the coming months.

What then can be done to soothe these concerns?

I believe good communication can be a balm for this unhappiness.

Chua Chu Kang GRC MP Zaqy Mohamad said in Parliament that gaps in information help the spread of conspiracy theories.

The Government needs to better explain policy benefits and issues on the ground, he said, lest destructive politics - "especially the politics of envy, and the politics of self-interest" - arise.

And as the CPF takes centre stage, explanations have indeed been clearer, more open and more frequent.

Last month, Manpower Minister Tan Chuan-Jin took to his blog to clear up some myths about the CPF.

An explanation by the Ministry of Finance - one of its most detailed so far - on how CPF monies are invested was put up on The Straits Times political site Singapolitics and widely shared.

With genuine concerns over the CPF, the Government should take a hard look at the scheme to address concerns and insecurities people have so strongly given voice to.

And indeed, PM Lee has promised improvements to the CPF and CPF Life annuity scheme by the National Day Rally in August.

But that may count for nought unless the changes are also accompanied by communication that is clear and plain, and efforts to keep the scheme as user-friendly as possible.


This article was first published on June 22, 2014.
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