Source : The Straits Times, Sept 27, 2007
DURING the recent parliamentary debate on CPF reforms, I spoke about higher returns for CPF savings. My speech on Sept 19 was subsequently reproduced in parts in The Straits Times and by the various mass media.
I would like to put on record the following clarifications:
* My assertion that CPF members have 'no choice' but to lend their CPF savings to the Government is too sweeping and factually incorrect as individual members do have the choice, if they so wish, to invest their CPF savings under the CPF Investment Scheme in a wide range of investment products to enhance their retirement nest egg.
* To achieve higher returns on any investment, we must subject the investment to more risk, including the risk of loss of capital, and there is no certainty that any particular rate of return can be achieved in the future. Therefore, the illustration I used in my Parliament speech comparing a fixed interest of 4 per cent per year and an annual return of 10 per cent over 40 years was simply to demonstrate mathematically the theoretical difference between the aforesaid rates of return compounded over time.
It does not in any way suggest that the higher rate of return will be achievable over the next 40 years.
Ong Kian Min
MP for Tampines GRC
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