CPF Life

Many people asked for my views on CPF Life. I replied:

a) It is a good scheme, as it provides the security of a lifetime income through pooling longevity risk
b) The Government gives a bonus of $4,000 for people (except the wealthy) to join the scheme
c) The annuity gives an imputed interest rate of 3.75% to 4%, which is attractive compared to the market return on low risk investments

Some of the remarks made by people who dislike the CPF Life are:

a) The Government will keep the money and may not pay it back
b) The Government makes a profit when the annuitant dies at an early age
c) The scheme will have a big surplus due to the low payout (based on the experience of other Government schemes)

I hope that these points can be addressed by the Government and that people can learn to trust the Government.

Tan Kin Lian