Compulsory Annuity And CPF Members' Rights

Source : The Straits Times, Sept 28, 2007

IN RESPONSE to a Nominated MP's comment that making annuities compulsory amounts to an interference with CPF members' own money, Member of Parliament Josephine Teo said in her letter ('MP tells why she fully supports CPF reforms'; ST, Sept 25) that 'Government's job is to intervene where necessary'.

The implication seems to be that it is Government's job to spend CPF members' funds if Government deems it wise to do so.

In my opinion, this is a question that one should not be so quick to answer.

I have no doubt that the intentions of the current Government are noble and I even support the objectives.

However, there is a bigger, fundamental question at stake here. Do CPF funds belong to CPF members? If they do then, surely, members have a right to decide how to spend them.

To draw an analogy, is it the job of Government to step in and manage the personal bank accounts of citizens? Some are careless with savings. But even with the best of intentions, can it be the job of Government to take citizens' personal funds and manage them more prudently for them? Every man has the basic autonomous right to deal with his property as he chooses.

So the fundamental question is this: Just because it is CPF funds, does Government have the right to decide how they should be spent on behalf of CPF members, even against the wishes of the members?

An affirmative answer would be unprecedented and would mark a definitive change in the nature of members' rights over their CPF funds. The significance of that decision should at least be appreciated. There is more at stake here than whether an annuity is a good idea.

Apart from the compromise to the property rights of CPF members, consider the situation if a weak government should make bad decisions on how CPF funds should be spent. It will be CPF members who will have to pay the cost of such bad decisions which they had no say in.

If purchase of an annuity is the best way forward for CPF members then it would be best if Government educates and convinces the people to do so voluntarily, rather than take the admittedly easier option of making it compulsory at the expense of the rights of CPF members.

Sometimes it is worth compromising efficiency for propriety.

Thomas Mathew Koshy