Monday, 8 August 2016

Chor Dai Dee and CPF proposed changes

When I was working at Montgomery Ward Buying House as the Hardlines merchandiser, I picked up this interesting card game called "Chor Dai Dee" from my bosses.

The MD and QA manager were both Hong Kongers that applied for Singapore PR and citizenship due to the 1997 HK hangover thingy.

It's one cool game!

You know the CPF proposed changes?

I deliberately held my hand.

Now that most of the key animals in our community have showed their hands, its time for the grasshopper have a bit of fun to discover who is not wearing any clothes...

More choice and flexibility?

When CPF Life was first introduced, how many options were offered?

4 right?

What were the reasons they gave for streamlining it to the present 2 options?

So they changed their minds again?

Want to bet once they tried to explain concepts like Net Present Value, Nominal and Real Inflation Rates to the same people who find 4 options too many and confusing, which way will the pendulum swing in the future?

Really? You want to go there?

We believe this is good for you; and in your best interest

For those who still remember the previous permutations before the present CPIS were introduced, compare it to the arguments for LRIS, any difference in marketing spin?

What were the projections? Now compare it to the present reality where only 16% of CPF members using CPIS made more than the 2.5%...  

Talk about unintended consequences...

You mean we can arrest the self-inflicted underperformance of CPF members with low fees and longer lock-up periods?

Pray tell why you didn't think of it when you introduce CPIS?

(So much for goals, objectives, and having a plan... Its still reacting to crash got sound mah)

Some animals have already declared LRIS as good, better, best!

Of course its vested interest.

Opinions anyone can give. Nothing wrong. I do that a lot too!

The performance of CPIS we can evaluate now as there's 10-20 years of actual track records from CPF members - not excel file projections like for Wholelife insurance policies.


LRIS not even introduced yet. Your opinion based on what?

Well you see, based on the past 20 years of data-mined statistics... and we project it forward another 20 years... you'll get...

OK, now try explaining it to those 84% CPF members under CPIS.

Ah! You see the fine print at the bottom?

Past performance is not indicative of future...

Eh? Then why you bring up past statistics?

Today's weather very nice hor? Sorry! I got to go to the beach!


Spear and shield

Don't you get a feeling there's mixed messages?

Sometimes they treat you like idiots, or widows, and orphans. Draw cartoons and make it real simple for you.

Look dee dee, this is how you draw a circle...

Sometimes, their faith in us is so great it feels like that scene in Forest Gump, "Run! Run Forest run!"

CPF is good

Don't get me wrong. I like CPF.

I've worked in 2 other countries with different systems from us.

The key difference is ours is a pay-as-you-go system. It puts personal responsibility right in front.

Just as long we don't forget it, we are good to go. Wink.


  1. The reason why I didn't talk about it, SMOL.

    Unless you are above 45, chances are the CPF rules will be different again.

    They are slapping themselves when they say they should have some governing principles/ formula and not keep tweeting it.

    Say only...

    I like CPF. In fact, it should be my main tap unlike many bloggers who treat it like just desert...

    And I believe there are others where CPF is not just the main tap but also the only Tap..

    Talk about trust, thanks for shifting the goal pole. So much for trust ...

    Anyway, I am more concerned about the economy than the CPF "system" you can tweet here fix there. But the crux is the system must have more inflow than outflow.

    There must be enough vibrancy in the economy for bosses to pay CPF, they must be more people contributing than withdrawing

    If we say people is aging, we are not fertile enough to come even close to repleshing out population, and we have good people also thinking of exiting the rat race, and they we say foreign workers take our jobs and dun welcome them with open arms ...

    How is the equation going to end? CPF is also a fund, it's not Bao Jia

    Productivity, as a driver of economy has failed. It has been around since Tharman time, close to a decade.

    Hope the economy restructuring team can pull a rabbit out of the hat

    1. So far, the shifting goal post happened at CPF SA: 55, 60, 62, 65, 67?, 69?, 72?

      Topping up CPF SA to eat into the Green?

    2. Sillyinvestor,

      I belong to the camp if CPF is less than 20% of our networth, we would be doing OK; and can ignore the frequent changes or noises.

      It won't affect us that much. We are not their target group.

      They will ignore us as we can pretty much take care of ourselves. We are more the target group for private bankers.

      If CPF is your main source of retirement income or only tap, then you jolly make sure you belong to the 16% ;)

      And be very ACTIVE every 5 years to do the draw "X" thing!

      Its personal responsibility versus hoping someone will take care of me. Take your pick.

      That's why I can never be caught in the passive camp.

      Maybe after I go sell salted eggs than I'll be passive ;)

      "Look ma! No brains needed!"

      Somehow that does not feel too intellectually stimulating to me...

    3. CW,

      Remember the story about the monkeys and 3 bananas in the morning and 4 bananas in the evening?

      The 2% option is like saying now I give you 2 bananas in the morning and 5 bananas in the evening.

      Some are now clapping with joy???

      Those who understand the Net Present Value of cash would prefer to have all 7 bananas at 55, thank you very much ;)

  2. I don't do this often, but I must copy and paste the dialogue at The Finance over my post here:

    Fred says

    August 9, 2016 at 3:03 am

    It is a ploy. A set up. You think it will get a study by MOM? It will probably get thrown out after two to three years like some previous ones.

    Joke! With this climate of negative or very low interest rate globally and getting lower, with hot butts burrowing even lower, it will take probably another 15-30 years to climb beyond the CPF OA 2.5% or SA 4-5%. The DJIA is an outlier, both in U.S. or global context.

    Within US, they talk about the real economy is detached from the stock market. Globally, only the U.S. stock market is running in opposite direction from the rest of the world.
    LRIS wants to offer more confusing choices to who? Haha…84% of CPFIS smart alexs(myself included) trying to punt on MSCI Global Index, ASEAN, Asian ETFs or even our local STI ETF? Haha…who has forgotten our SWFs lost heavily in 2015.

    These pros with AAA brains can’t scrap through even one per cent in 2015, our Bengs, Mat, and Muthu can do better than 2.5%?


    1. Fred,

      I would prefer they keep it simple for the majority.

      The sad reality with CPIS and good intentions is the majority 84% are in a bigger hole than had they done nothing and just let their money rot in CPF with the 2.5% interest. Boring, but safe!

      I would think its better to recommend CPF members to invest with their own cash for the first 10 years.

      Only if they had proven to themselves they can beat the CPF 2,5% hurdle rate, then they have earned the “right” to tap and utilise their spare CPF money for investments under CPIS.

      It’s meritocracy.

      Performance based; not hope based. How to argue with your own track record?

      If big daddy feels generous, can give extra 1-2% interest to those CPF accounts with less than $100K age 55 and above. This way, the less well off will get the “help” they need without throwing them to the wolves!

      Some financial advisers out there are so despicable that even I – a man whore snake oil – see them no up.

      As for the balance 16%, you think we will be interested in LRIS when we have been doing pretty well by ourselves?


  3. Heheh. Most times I don't like to comment too much on this topic. Too much negativity. In the case of LRIS, full details not even out yet. Forget it.

    Like SillyInvestor, I like CPF too. Hopefully is not my main tap.

    I'm a glass-half-empty kind of person and so I tend to view it with a "worst-case-scenario" approach, especially with all the ever-changing rules and shifting goal-posts.

    I even went as far as doing projections with extremely conservative parameters (e.g. drawing a fraction of current salary with no pay increment for 20 years) and I should reach the projected full retirement sum in 15 years assuming the game masters don't change the rules.

    "The Panel is of the view that low cost of investing should be one of the key guiding principles for the selection and construction of the funds offered under the Lifetime Retirement Investment Scheme."

    Simple Maths. Can't argue against this. The US TSP is ridiculous at only 0.03%!

    1. Kevin,

      I much prefer the previous 2 simpler CPF proposals:

      2 suggestions I like from the CPF Life review panel

      1) If 7 bananas too little, you put in 14 bananas yourself lor!

      2) Start withdrawing CPF Life at age 70 instead of age 65 - that's delayed gratification.

      For those who fear inflation and prefer a bigger monthly payout without adding more bananas into the murky hole, this option is much easier to grasp than the 2% "no 3, no 4" inflation thingy.

      At 65, you have to make a "bet" whether inflation for the next 35 years will average more than, or less than 2%?

      How many CPF members have a clue how CPI is calculated? They don't count inflation like you and I do at the supermarket...

      Also, if CPF members strategic forecast are so good, CPF won't be a big part of their networth...

      LRIS - Ah! You smart ;)

      I'm quite interested to see the details on the proposed "lock-up" periods.

      For fixed deposits, the longer we "lock-up" our funds, the more interest we get as "compensation".

      Let's see whether they are going to give CPF members any "compensation"... I won't hold my breath though.

      Its easy to explain "lock-up" period to CPF members:

      Once upon a time we can get all 7 bananas at 55; now we can only get some bananas at 65, and the rest spread over our life time. Now that's "lock-up"!


    2. The smart ones have all written their pieces. I'm just standing on the sidelines, leeching their hard work :)

      I think we're the type who, rather than wait for bananas to be handed out to us, prefer to plant banana trees! Even better - why wait for handouts when we can have fruit platters everyday?

      I'm just curious that after so many years of allowing people to play with fire, then they come up with this LRIS thing? As far as three years ago, the first signs were showing. (via Bloomberg, 2013)


      GIC Pte, manager of more than $100 billion of Singapore’s reserves, is changing its investment strategy for the second time in three decades to be more flexible as the global outlook becomes “complicated.”

      GIC will split its portfolio into one that’s actively managed, and another that tracks the overall market, it said as its annual report showed returns were little changed. The company didn’t say how much of the assets will be managed or indexed against the market.

    3. Kevin,

      Yes! Do our own plantings! Be the farmer.

      If tired to do the work ourselves, can hire monkeys to work for us ;)

      I tell you, the active managers in GIC will be working their butts off!

      This indexing thing is like the introduction of driverless car to the money management industry...

      Some will benefit; some may lose out big time.


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