Feedback to the Government, following Catherine Lim’s open letter & the “Return Our CPF” Rally at Hong Lim Park – 12 Jun 14

Posted on June 12th, 2014 in Food for thought



In early Jun 2014, Ms Catherine Lim wrote an open letter to our Prime Minister, and highlighted what she observed as a growing disconnect between Singaporeans and their government, how Singaporeans “no longer trust their government and that the government appears not to care about regaining their trust”.  Quickly, it attracted online comments and criticism from all sides of the fence, with the majority appearing to agree with her.

Trust is the firm belief in the reliability, truth, or ability of someone or something. Trust goes beyond fact.  It resides in the emotional connection.  Is our government oblivious to this? No.  Mr Peter Ong, Head of Civil Service is most certainly aware of it having introduced an invigorated goal for our public service – “One Trusted Public Service with Citizens at the Centre”.  He knows that public officers need to be able to step in the shoes of a citizen, see through his eyes and feel his heartbeat before crafting and implementing policies.

If the administrative arm of the government is fully aware of the way forward to engage Singaporeans, surely the political arm is also informed.  What could be the reason then for the swelling discontent that we see today, where a significant population of voters is not convinced or content with the government’s explanation to their question?  With experienced public communication divisons, surely the government can refute any accusation convincingly and factually?

With regards to the Central Provident Fund’s (“CPF”) interest rate returns to members, there is no convincing rebuke when critics point to more stellar returns from the pension funds of other countries.  Global ranking of pension schemes do not put Singapore’s CPF scheme at the top.  A most recent one, the Melbourne Mercer Global Pension Index ranked Singapore seven out of 20 countries.  Singapore scored a “B” which is for pension systems with “a sound structure, with many good features, but has some areas for improvement”.

For any government that points to its stellar track record and performance, a finishing that is not quite a top 3 leaves the authority open to questions.  And the less convincing the replies to questions raised by citizens who compare how the other pension schemes operate and perform, the deeper the wedge in the distrust and emotional disconnect.

Money is a very emotive issue and the CPF debate and “Return our CPF” rally at Hong Lim Park is not about an esoteric issue such as freedom of speech that not all Singaporeans can or care to relate to.  The CPF debate tugs at every Singaporean and with that attention, invite immense scrutiny, ranging from Members of Parliament to the coffee-shop uncle on how it can be improved.

I previously served in the public service and was tasked with my team to cut business red tape.  Change is not the easiest thing to push through and in my work, the phrase I dread to hear most was “It’s a slippery slope.” To the uninitiated, the slippery slope argument goes like that.  It begins by suggesting that if we do something, often with good intent, it will lead to another and before we know it, we’ll be doing something that has negative consequences.  So in conclusion, we shouldn’t be doing the first action in the first place.  And that is one of the greatest obstacles for meaningful change to take place.

This sort of defensive reasoning is frustrating because there is no reason that one event must inevitably follow the first without a series of graduations between the two events.

Other similar “change killing” phrases you might be familiar with could be

1)      We risk opening a Pandora box

2)      We will open the floodgates. Will you bear the consequences?

3)      When it goes well, all is good.  But when things go wrong, we’ll get the blame

4)      If you give them what they want, they will push for more

3 years ago, when the idea of nationalizing our public transport system was floated in response to the swell of public dissatisfaction over the reliability and comfort of public transport, it was dismissed quickly. One can almost imagine a “slippery slope” reasoning in the background. Fast forward 3 years later and Singapore has approved a “semi-nationalization” of public bus services in Singapore where the government will take over ownership, provision and funding of all bus operating assets and infrastructure from private bus operators.

We have to stop raising a default “slippery slope” defense when re-evaluating schemes and polices. Instead of assuming the slippery slope slides downwards forever, pave it with asphalt and line up checkpoints along the way so that there is opportunity for braking (intervention) should unintended consequences happen.

“If it ain’t broke, don’t fix it” is another dangerous idea.  One common school of thought is that if you make things better without people asking for it, they start taking you for granted and all your efforts will be unappreciated.  Supporters of this thinking fail to realize that if every time one needs to complain to see improvements, the recipient of the improvements soon becomes jaded and cynical. Compare this to someone who keeps receiving pleasant surprises.  Will the recipient start taking things for granted? Debatable.  Will the recipient get an emotional connection?  Most definitely.  This is because the recipient begin to trust that the powers-to-be anticipate their needs and difficulties and act, to the best of their ability.

It is commendable that the CPF scheme enforces discipline on the withdrawal of one’s savings. After reading how Madam Pusparani Mohan, 34 squandered nearly $1 million in insurance payouts and donations from the public after her husband was killed in a freak accident in March 2012, Singaporeans are aware of how one can easily mishandle money.

But the biggest grouse is the increasing Minimum Sum amount that one must leave in his Ordinary Account (“OA”) and the 10 years gap between age 55 and 65 before the mandated Minimum Sum is disbursed back as a monthly payout. Some Singaporeans do struggle financially within the 10 year gap due to genuine circumstances.

There are two practical suggestions I would like to make.  I am not aware of all the counter-proposals suggested to the current CPF scheme so I do apologize for any overlap.


1)      Currently, CPF monies are invested by the CPF Board (CPFB) in Special Singapore Government Securities (“SSGS”) that are issued and guaranteed by the Singapore Government. The proceeds from SSGS issuance are then invested by the Government via MAS and GIC. To ensure that CPF members’ fund can grow to meet and exceed the mandated minimum sum, raise the interest rate in years that GIC investments have performed well. Fund performance will fluctuate from year to year, so it is reasonable to have some window for deviation.  There is no obligation to maintain a higher interest rate that is not sustainable.  Retain the current floor interest rate and reward CPF members in good years.  If there are 10 good years of fund performance, then CPF members get 10 years of high interest rate return.  Interest rate returns must be depoliticized and overseen by an independent body so it does not risk becoming an election carrot or stick.


2)      Regardless of the Minimum Sum one has retained in the OA, allow for staggered withdrawal, say up to 10% of it per year. For those with genuine financial hardship, a higher percentage could be considered. To incentivize those who keep it there for a full 10 years, a higher interest rate could be offered.


There will be lots of difficulties, real or imagined, to improve or overhaul the CPF scheme. I take pride as I recollect the time I spend with my team and colleagues from other ministries and statutory boards standing up against “slippery slope” and “If it ain’t broke, don’t fix it” arguments as we pressed hard for business rule change.  Governance is about doing better for Singaporeans, anticipating their needs, understanding the difficulties they face and find solutions. Do this and they will stand by you, mind and heart. And in the long road ahead, there will be many more “slippery slope” and “If it ain’t broke, don’t fix it” arguments to squash.




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