CPF money belongs to account holders

Nominated MP Chia Yong Yong has said that Central Provident Fund (CPF) account holders should not be entitled to decide how their monies are used because the monies include contributions by others ("NMP opposes greater flexibility in withdrawal of CPF savings"; March 4).

However, the bulk of CPF contributions is deducted from the salaries of employees who defer spending by getting less take-home pay.

These deductions are clearly employees' money.

Surely, at some point, employees should get to decide how to spend it.

Employers' contributions are also hardly other people's money, because the employer meant it for the employee.

Employers calculate their business costs and take into account the full amount paid to employees.

If they pay higher employers' CPF contributions, they adjust the salaries so that the total amount paid out reflects their business costs.

From the employees' point of view, employers' contributions are also part of their total pay package, which they expect to be able to use for housing or other payments.

Employers' contributions are, therefore, treated by both parties as payments to the employee, and not a gratuitous "co-payment".

As for CPF top-ups with public funds, I agree that these may be considered other people's money, so only these might possibly be set aside and blocked from use.

I am a strong believer in personal responsibility in preparing for retirement.

But this is entirely separate from saying that CPF account holders should not have flexibility in deciding how to use their own money.

Tan Soon Meng

This article was first published on Mar 12, 2015.
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