CPF

Re: CPF

Postby millionairemind » Fri May 14, 2010 9:06 pm

May 14, 2010
CPF Minimum sum up July 1


THE prevailing CPF Minimum Sum (MS) will be raised to $123,000 from $117,000 from July 1,
as part of move to ensure that Singaporeans save up enough for their retirement, the Central Provident Fund Board announced on Friday.

The new Minimum Sum will apply to CPF members who turn 55 from July 1 this year to June 30 next year, said a statement from the CPF Board.

Members who can set aside the full MS will receive about $1,100 per month when they reach their draw down age of 65.


The Manpower Ministry announced last August that the MS will be gradually raised to reach $120,000 in 2013, to make adjustment for inflation and also to ensure that CPF members set aside sufficient savings for their retirement.

The CPF on Friday also announced that the Medisave Minimum Sum will go up $34,500 from $32,000. Members will be able to withdraw their Medisave savings in excess of the MMS at or after 55 years old.

Also, the the maximum balance a member may have in his Medisave Account, known as the Medisave Contribution Ceiling (MCC), would be increased correspondingly to $39,500, from $37,000.

"As announced previously,any Medisave contribution in excess of the prevailing MCC will be transferred to the member's Special Account if he is below age 55 or to his Retirement Account if he is above age 55 and has a MS shortfall," said the CPF Board.

"The revisions to MMS and MCC are to ensure that Singaporeans have sufficient savings to meet their hospitalisation expenses, and have been adjusted for inflation."
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: CPF

Postby millionairemind » Tue Sep 21, 2010 8:41 am

Singapore
Published September 21, 2010

4% minimum rate on SMRA savings extended


THE floor rate for interest on savings in Special, Medisave, and Retirement accounts (SMRAs) - which has been 4 per cent since 2008 - will be kept at this rate until Dec 31, 2011, the Central Provident Fund said yesterday.

Thereafter, interest rates on all CPF account monies will be subject to a minimum of 2.5 per cent per annum.


The move to extend the deadline of the floor rate comes against the backdrop of lower interest rates this year. 'Despite our strong economic recovery, interest rates have remained low this year,' said Manpower Minister Gan Kim Yong.

'The sharp drop in interest rates at the expiry of the 4 per cent floor rate may impact CPF members who may not have benefited fully from the economic recovery yet,' he said. 'Therefore, the government has decided to extend the 4 per cent floor rate on SMRA monies for another year.'

Since Jan 1, 2008, SMRA savings have been invested in Special Government Securities (SSGS) which earn an interest rate pegged to the 12-month average yield of 10-year Singapore Government Securities plus one per cent.

This market-based rate is comparable to instruments of similar risk and duration, and is meant to ensure that members receive fair and reasonable interest rates.

Then, to help members cope with the transition, the floor rate for SMRA interest was pegged at 4 per cent for two years up to December 2009.

It was further extended to December 2010 due to global economic conditions and the exceptionally low interest rate environment a year ago.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: CPF

Postby millionairemind » Thu Sep 23, 2010 7:42 am

Published September 23, 2010

Funds find CPF bar too high, time too short
With January deadline looming, most face prospect of losing access to new CPF money


By GENEVIEVE CUA

(SINGAPORE) With just three months to go before their moment of reckoning, less than half the funds here fully meet all the admission criteria for the CPF Investment Scheme (CPFIS). For the rest, the clock is ticking as they face the prospect of not being able to access new CPF money.

By Jan 1, 2011, funds on the CPFIS menu must comply with all four criteria that were put in place in 2006 for all new funds as part of the Central Provident Fund's efforts to improve returns for members by raising the quality of funds in the menu and putting a cap on costs. For funds already in the scheme, the criteria were implemented in stages since then.

Meanwhile, for the funds, consolidation is well under way. In 2006, there were over 400 unit trusts and ILPs (investment- linked insurance funds) on the menu. As at Aug 4 this year - the latest available data from CPF - there are 332 funds. Of these, less than half (about 140 funds) are in List A, which means they already satisfy the criteria.

Of the remaining 192 funds or so, about 79 funds or 41 per cent are closed to new money. The rest are in limbo as they struggle to fulfil the four criteria: lower expense ratios; a 3 per cent cap on sales charges; a three-year track record; and a top-quartile performance ranking among their global peers.

The top-quartile performance requirement remains the biggest sticking point. Morningstar is the consultant that screens the funds. The expense ratio requirement is fairly easily satisfied, with some managers opting to subsidise expenses.

The absence of some names among the List A funds is glaring. For instance, as at August, AIA had only two funds on the list. Notably, its Asian balanced fund Acorns of Asia - which has underperformed over three- and five-year periods - was not on the list. It has $1.2 billion in assets. Aviva was also absent. And DBS Asset Management had only two funds on the list.

There is also a thinning out of some types of assets - there are less than a handful of emerging market funds, for instance. Fees of emerging market funds tend to be higher than those of, say, global equity funds. Among unit trusts, there appears to be only one global balanced fund by Franklin Templeton on List A.

While funds are likely to seek re-evaluation in the hope of full inclusion, failure to qualify is likely to spark a shakeout in distribution arrangements. Unit trusts are typically bundled into ILPs and rebranded by insurers that may not have in-house fund management expertise. These arrangements are coveted by unit trust managers, as insurance savings are seen as 'sticky' long-term stable assets.

Insurers are likely to drop unit trusts that fail to secure full inclusion in favour of funds that do. Great Eastern Life has a number of funds that are yet to secure List A status, managed by Lion Global Asset Management.

A manager who declined to be named said: 'CPF inclusion is still quite important, but it's not crucial. Where it becomes crucial is with insurance partners, who want CPF eligibility.'

CPF met fund managers and insurers earlier this year to explain the requirement for top-quartile performance ranking. Besides quantitative data including analysis of a fund's risk/return profile, Morningstar will also scrutinise qualitative factors such as organisational strength and regulatory issues, investment style, process and implementation, and portfolio construction.

But with the January cutoff looming, some managers remain anxious about just how Morningstar reaches its conclusions.

One manager said: 'They have told us that we cannot have a manager managing diverse mandates. But it does not make economic sense to have a manager looking after just one mandate. Some of us will opt for another re-evaluation if we disagree with the comments.'

Another bone of contention is that funds may not stay in the top quartile for an extended period. Funds may be asked to go for re-evaluation if there are issues including a deterioration in performance, style drift, management turnover and securities held outside the mandate.

A chief executive said: 'In a broad sense, CPF is trying to restrict choice. It is looking at people's returns and thinking, 'members have done so badly'. But human nature is to buy at the top and sell at the bottom. The danger when you do this is you almost give your seal of approval to top-quartile funds. Technology funds 10 years ago would have been top-quartile.'

Not all managers are upset, however. One, at least, is fully supportive of CPF's efforts, saying: 'If you represent CPF members, what would you want them to have? The best funds and the lowest possible costs. With that as the objectives, what CPF is doing is logical. Advisers should now step up to help with asset allocation among the top-quartile funds.'

The big question is: with a narrower CPFIS menu, is it still possible to put together a decent long-term portfolio? Providend investment specialist Mudit Goenka said: 'There is a decent suite of funds, but the options are restricted and we can't express our view, especially on emerging markets.'

But the performance of Providend's CPF portfolios actually beat those of cash portfolios, which could be explained by lower costs, he said. 'The restrictions do make sense.' List A funds' expense ratios must not exceed the median expense ratios of their respective categories.

For those who do not consult financial advisers, the dearth of simple balanced funds means they will have to decide on the appropriate mix of equity and bond funds themselves
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: CPF

Postby kennynah » Tue Jan 11, 2011 9:38 pm

received this email today from CPF...


InTouch with CPF: Earn up to 5% Interest!

Savings in your Special, Medisave and Retirement Accounts are guaranteed to earn at least 4% in 2011. With the first $60,000 of your combined CPF Balances (up to $20,000 from the Ordinary Account) earning an extra 1% interest, you could earn up to 5% interest!

Here are three ways to earn the good CPF interest:
1. Leave at least $60,000 (with up to $20,000 in the Ordinary Account) in your CPF accounts.
2. Transfer your Ordinary Account savings to your Special Account.
3. Top up your Special / Retirement Account*
* If you top up with cash, you could also get up to $7,000 tax relief.

**

not bad hor??
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Re: CPF

Postby LenaHuat » Wed Jan 12, 2011 8:27 am

Exactly, K :D Earlier on I had posted that some 60% of CPF members do not withdraw their $$ upon turning 55 because their $$ is better off with the CPF Board. I write this because there is a mistaken notion that members are 'dying' to withdraw their CPF.
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Re: CPF

Postby winston » Wed Jan 12, 2011 8:56 am

A few of my friends were "saved" from the Financial Crisis because they did not withdraw their CPF. If they have taken out the money, very likely it would have gone into the stock-market ..
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: CPF

Postby LenaHuat » Wed Jan 12, 2011 9:00 am

Hi Winston :D
I plan to do likewise when my time comes :D
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Re: CPF

Postby winston » Wed Jan 12, 2011 9:17 am

Ha Ha ... I'm looking forward to withdrawing my CPF. I have already withdrawn my retirement money from 3 other countries :D.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: CPF

Postby Aspellian » Wed Jan 12, 2011 12:02 pm

winston wrote:Ha Ha ... I'm looking forward to withdrawing my CPF. I have already withdrawn my retirement money from 3 other countries :D.


you are a well-travelled man. ;)

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Re: CPF

Postby eauyong » Wed Jan 12, 2011 12:09 pm

winston wrote:Ha Ha ... I'm looking forward to withdrawing my CPF. I have already withdrawn my retirement money from 3 other countries :D.


Not investing in CPF Life :?:
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