CPF

There's a few things I do when I'm free - PC Games, TV, Complain/Rant (i.e. Blog), think about Nice Girl and think about Money/Retirement.

Today, it's time for Money/Retirement. With last years recent CPF changes it has made things really fucked up. The new formulae is so convoluted that it would blur out any auntie/uncle (like my mother)... and even saavy smart youngsters like us... will be WTFing after a first reading. Anyway, the system is so convoluted, that I think doing a model in excel will require some brain effort. Anyway, WL think this is done intentionally to confuse all the money-blur Sinkaporeans... another gahmen great ways to smoke you until you dunno what's going on.

Yesterday (12 Feb 08), the committee for the "Longevity Income Scheme" as they call it released their report to the gahmen. Here's my thought. I refer to the full report http://www.straitstimes.com/STI/STIMEDIA/pdf/20080212/NLIC%20Report.pdf.

Let's go to Annex A. Shall we? WL criticism as usual:

Concern: Some disliked the term “insurance”, commonly understood to mean obtaining protection against catastrophe.
Response: The Committee took note of this feedback and proposed a different and more positive name – a National Lifelong Income Scheme (NLIS) – which will provide participants a monthly income for life.
WL Says: WTF? Typical Sinkapore wayang. You think just renaming it will make the problem go away? Oh please... Oh wait... Sinkaporeans are dumb people. Well at least 66% of them are.

Concern: Some expressed disbelief that they would live past 85 years old and were therefore concerned that they would not live long enough to benefit from the compulsory scheme.
Response: The Committee engaged experts on mortality data and trends and found this perception not well-founded (see Chapter 3 of the Report). It proposed more public education to help the public understand why lifespans are increasing and how this would impact Singaporeans’ retirement needs.
WL Says: Meaning we need more propaganda to brainwash the Sinkapore citizen. To do it the LKY gangster style, who is the expert on mortality data? Show me the details! Breakdown by age and socio-economic background! As a semi-educated person in the Science, fancy Statistics often give shitty results. Never trust Statistics, unless you look through it from head-to-toe. Do it the Scientific Way and focus on the methodology! And btw... for the record my mom won't live till 85 (as the committee claim). Anybody wanna bet with me? Hell... I will not live past 85. Anybody wanna bet with me?

Concern: The scheme benefits those who are wealthier as they will live longer.
Response: The Committee agreed with the principle that factors shown to influence mortality risks should be considered as a possible basis for pricing premiums in the LI plan. However, it noted that there is as yet no robust local data to support the use of any other factor (apart from age and gender) to price the premiums (see Chapter 3 of the Report).
WL Says: I remember reading from a post somewhere and it makes sense. The wealthier people will live longer! Why? They eat better and healthier food. They have access to private healthcare and not the shitty incompetents in the gahmen hospital. Dude! Does it take a scientist to figure out that being rich will enable one to live longer? Morons!

Concern: Desire for LI premium to be returned to beneficiaries in the event of the member’s early demise.
Response: The Committee proposed refundable premiums for the design of the scheme as well as options for earlier payouts (see Chapter 5 of the Report).
WL Says: Well at least something has gone right. At first, some dickhead minister said the premium would be non refundable. That's robbery! It's enough that the gahmen robs us of our CPF money... now they literally want to rob us?

Concern: CPF members should be allowed to opt-in, rather than for it to be mandatory.
Response: It was necessary for NLIS as a national scheme to be mandatory to avoid deficiencies created through adverse selection and opt-outs. As this is part of the Minimum Sum Scheme, there is merit in including all those who would benefit from it.
WL Says: Meaning that Sinkaporeans are fed up of the gahmen robbing our money and putting it into our CPF (i.e. dead man money) that only the most stupid and retarded of Sinkaporeans would willingly give out more money to the gahmen to control. So therefore, we must force it down everyone's throats. And unlike in America, you Sinkies can't do anything about it! HAHAHA!!!

So... at the end of the day. Nice committee headed by a prof... 57 pages long... couldn't even come up with a Table like all those insurance schemes you see... i.e. various option and how much money you get. Pathetic! That's why I think all the profs involved in such gahmen work really are using their balls to do the thinking. What an insult to the academia.

Now for the caveat...

From what I've figured... The Minimum Sum will be split into the Retirement Account (RA) and the Refundable Premium (RP) - i.e. the new scheme to con more of our money. All money in the RA goes to your family when you die. However, the RP does not. Now, the news report are quite contradicting on this. Some sources say the RP is refundable, and yet they also claim if you die before the draw-out age... bye bye no money for you.

How typical... Trying to smoke people again?

Anyway, I think the confusion arises because there is a refundable RP option and a non-refundable RP option. Arghh... whatever. But... the catch is only the base sum is refunded, the interest is not. So let's say the minimum sum is $132,000 (calculating for my mother). Meaning that if one choose to pump all the money from the RA to the RP in order to get livelong payouts starting at 65, and if that person die at 65... the beneficiaries get back $132,000 cause it's refundable right? So everyone happy? So all those who are opposed to this scheme, would want to get their payout ASAP should do this? THIS IS WHAT THE GAHMEN WANTS. AND SO MANY UN-EDUCATED SINKIES WILL FALL INTO THE TRAP!!!

NO!!! Let WL explain why. Cause you will lose 10 years of interest! While you (actually your family) may get back the sum of $132,000 placed into RP, you have also lost $73,000 of interest (assuming a conservative 4.5% interest rate). Woah!!! Fuckers!!! You have to admit the sly and cunning way the gahmen is implementing this scheme... Haha WL is smart enough to see through their lies!

Of course, I'm assuming the worst case. The older you live, the less money will fall into the gahmen hands. Seriously, somebody should do a proper table on how much money you get, your beneficiaries get and how much is lost to the gahmen. Only then, can we make an educated decision. And I will be doing this before my mother hits 55 and must make this decision.

Bottom line is... if you expect to live till 70-80 years old, which I think is a reasonable estimate for this... this "Longevity Insurance" crap is still the same scam! The trick here is subtle... cause of the refundable policy now, the stupid uncles/aunties will think it is ok. IT IS NOT!!! Don't forget about interest... the gahmen will rob you of the interest. Smart eh? Prof leading the committee wad... Thus, I would suggest setting the draw out date at 90 Years old... That way you only spend 6% of your MS to put into RP, the rest goes into RA, which is your family's money not the gahmen money (technically speaking). That way, if you die early... the most the gahmen can eat up is the interest from your $8000 RP payment. Your RA monies and its interest still belongs to your family!!!

EDIT:
Ok it's really complicated. I did a preliminary excel calculation. Some findings. You can ask me for the XLS if you wish. Whatever it is... if you die young (i.e. 65-75 yrs old), your best bet in leaving money for your family is to fuck care the Longevity shit and opt for 90 years old payout. That way you get most of your monies in your RA (of which goes to your family upon death), and the gahmen gets a few thousand dollars of interest off that puny RP money.