The choice is yours

SINGAPORE - Should the CPF Investment Scheme (CPFIS) be stopped so that members will not risk losing their retirement nest egg? Yes, said a resident who claimed that he had lost some $350,000 in his CPF account after investing in shares.

The Lengkong Tiga resident, who identified himself as Mr Goh, said during the ministerial dialogue yesterday that he only got back $35,000 eventually but did not say if these were the gains from the investments or the amount he could withdraw from his Ordinary Account (OA) on top of the Minimum Sum.

He also did not say how he lost the sum and whether the investments spanned a few years. MediaCorp understands that members can only invest up to 35 per cent of the money in their OA in shares.

Mr Goh said he had suggested to the CPF Board to stop allowing members to invest in shares, but staff had replied that it was his personal choice to make the investments.

Second Minister for Finance Lim Hwee Hua said she agreed with the CPF Board's stance, adding that there had been "a lot of demand" for the Government to allow members to invest their CPF money before the CPFIS was introduced.

"I'll convey your feedback to the CPF Board but I'm not quite sure the rest will agree that we should stop the scheme," she said. Senior Minister Goh Chok Tong said that by the same logic of stopping the CPFIS, then "we should not have a casino".

"You are right, when the temptation is there, people think they can make money out of it," he said, adding that he has never sunk his own CPF monies in equities because of the higher-than-bank interest the CPF scheme pays minus the risks.

Still, there had been pressure from those who wanted higher returns on their savings, so "we did open up CPF to investments because it's your money, you decide what to do. Unfortunately, most people lost money because they are not savvy investors."

Banning the scheme, however was not the solution. "You got to exercise your own choice," he said. The latest performance numbers of funds under the CPFIS released earlier this month pointed to a solid year.

According to Lipper, the funds tracking company under the CPF Board's guidelines, the average return of CPFIS-included funds, unit trusts and investment-linked insurance products rose 38.62 per cent last year compared with the same period a year ago.

[SOURCE: http://www.todayonline.com]

 

~ This is quite a strange request, since we’re allowed the choice not to invest the CPF monies, if we decide to invest, of course we have to be prepared to bare the risks!