Anonymous

26 Jun 2019

∙

How did you arrive at a guaranteed 4%, 5% and 6% interest p.a, and not run into a deficit of funds?

People often say govt losing money hence they are withholding our CPF savings back. What is the more accurate way of explaining what’s happening with our monies before 65yrs old?

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CPF Board

26 Jun 2019

Hi,
CPF monies are invested by the CPF Board in Special Singapore Government Securities (SSGS) that are issued and guaranteed by the Singapore Government. This arrangement assures that the CPF Board will be able to pay its members all their monies when due, and the interest that it commits to pay on CPF accounts. The Singapore Government is one of the few remaining triple-A credit-rated governments in the world.
The proceeds from SSGS issuance are invested by the Government via MAS and GIC, just as it invests the proceeds from market based Singapore Government Securities (SGS). GIC is a fund manager, not an owner of the Government’s assets. It merely receives funds from Government for long-term management, without regard to the sources of Government funds.

No CPF monies go towards government spending. Government borrowings, whether via SGS or SSGS, cannot be used to fund expenditures. Under the reserves protection framework enacted in 1990 in the Constitution and the Government Securities Act (enacted in 1992), the monies raised from government borrowings cannot be spent.
To find out more, you can visit: https://www.mof.gov.sg/Policies/Our-Nations-Res....
Hope this clarifies!

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