The following article first appeared in The Real Singapore with the suggestion to have an opt-out system for the CPF Minimum Sum scheme. Is it a good or brain dead idea? Let’s discuss.
A simple answer to the complicated CPF question.
Lots of people have come out against CPF, most are saying that they want to withdraw everything at 55, some are even saying to abolish CPF and give back everything now.
Why dont we have an opt-out scheme instead? If a person opts out from CPF, they can get back all their money. BUT, on the condition that when they finish their money, either by spending it like water or gambling it away, they will not be able to ask the govt for more aid from taxpayer’s money. Fair?
Lots of people support CPF because they are afraid that if people start taking out all their money, they will spend it away and then come back to ask for more when they are broke. This will make all our taxes go up in order to support these people. But if this opt-out scheme is implemented, I think no one will have a problem. Both sides will win, those who want to withdraw from their CPF can do so, and the rest of the population can go on without paying more taxes for people who spend irresponsibly.
What do you guys think?
TSB: At first glance, the suggestion to opt-out of the CPF Minimum Sum scheme looks good. Great even. It hands future financial responsibility back to Singaporeans. It allows them to exercise their freedom of choice. It is them saying: `It is my money and I can do whatever I want with it. If I failed, it’s my fault!’ Perfect. A win-win situation. Everyone’s happy. Or is it?
Look deeper and you can see that this suggestion has so much wrong in it that it is bordering on the criminal. It is callous, cold-hearted, calculative and irresponsible. It assumes that everyone is financially prudent and if they are not, if they fell by the wayside due to some bad decisions, they’d be deprived of basic human needs. It is asking for the government, indeed the society to be irresponsible and not care for their brethren. It is telling them that should they fail, they’d be punished in their later years.
Let’s put it in perspective. Assuming someone retires at 55 and decides to withdraw all of his CPF savings. Due to some bad decisions, he squanders all of it and falls sick. But since he has opted out of the CPF scheme, he will not be able to ask for government’s aid. Meaning, since he will not be covered under the various medical schemes, he will have to be totally dependent on other financial sources. But what if he doesn’t have any? The suggestion above is basically asking him to be turned away and denied medical treatment. And this is why the suggestion is so wrong on so many levels. It is asking the government to abandon its duty to take care of its people. It is also asking the society to turn a blind eye to those amongst them who have fallen on bad times. And how many Singaporeans will suffer the same fate should the opt-out system be implemented? Many.
Is this the type of government that we want? Is this the type of society that we want to build? A society that is so cold and calculative that we are willing to allow our countrymen to suffer simply because well, he has opted out and will have to pay for his indiscretions. In this case, opting out means, if you are sick and if you are poor, you are opting out of having a long and fruitful life.
And this is why the CPF Minimum Sum scheme is there. It is a scheme that allows everyone to have a shared responsibility to ensure that no one is denied basic human needs such as healthcare. It is a scheme that compels financial prudence on people who may not be financially savvy. It is a safety net that serves to catch anyone who falls.
Opting out of the CPF is not like opting out of the Human Organ Transplant Act (HOTA) where if you opted-out you would still have your organs intact when you die. Opting out of CPF means you might be dead broke before you even die.