I Paid The CPF A Visit

CPF, whoa. There's been so much hullabaloo about our CPF ever since Roy got sued. No one really cared enough to get himself in trouble like this before. That's sort of nice isn't it?

I guess in contrast someone else isn't being nice enough to step back, take the high road, explain the facts and forget it ever happened. Well.

Now that people do care, again, it's perhaps time to set some things straight about our CPF.

1. I asked about 10 people about where our CPF money is invested, people from all walks of life, intelligent adults who are aware and not ignorant. Guess what? They all got this wrong. Our CPF money isn't invested with Temasek or GIC. It's invested against special financial instruments guaranteed by the Singapore government. These are the Special Singapore Government Securities. See http://www.sgs.gov.sg/

 

I don’t know what specific instruments our CPF is invested against and I don’t know what real returns we’re making. If anyone can figure that out, let me know.

2. The money you borrow out from your CPF to buy your house or flat has to be paid back when you sell that property. And you have to pay back the interest you would have earned if the money was untouched. If you took out $100k, and sold your flat after 10 years, you'd have to pay back $128,008.45 if the annual interest stayed at 2.5%.

If you're paying installments from your monthly CPF contribution, those are subject to this accrued interest scheme too. So if you took out $100k initially and pay out $1k a month to settle your HDB or bank loan, you'll owe $264,825 at the end of 10 years (with interest calculated monthly and compounded). Kinda sucks doesn't it?

I personally disagree with the need to pay back the phantom interest. If the money isn't there, it doesn't need the attention. If it's truly my money, I wouldn't be punishing myself. My future self would definitely understand.

3. With point 2, you can actually pay back the money owe yourself. I went to the CPF offices last Friday and ask the nice counter girl just that. I had to give the example of winning lottery to explain how I could perhaps even fathom paying the sizeable amount back. The officer lady had to come out to explain that yes, I could pay back what I 'owed'. I needed to present a letter explaining my intention together with my CPF account statement with the amount 'owed'. Plus an adequately furnished cheque would suffice. I could also furnish a partial amount of the principal borrowed. That would help keep the interest down.

The officer lady kindly also reinforced that by settling what I owed at this point in time didn't mean I wouldn't owe anything if I didn't kill off the monthly installments being paid out to meet my bank loan. So should you not pay your monthly instalments with your CPF? I liken It to paying two sets of interest rates. If the HDB charges folks 2.6% on monthly installments, and CPF makes sure I pay myself back at 2.5%, that’s 5.1% I have to fork out. In this market where savings rates are not even 1%, 5.1% seems like a lot. Paying your monthly installments out of your monthly cash is perhaps advisable for those who can truly afford to not have that cash. If you have a car or mouths to feed, then perhaps the liquidity is useful. 

3. You'd technically owe yourself this accrued amount even if you've paid off your bank or HDB loan. So at the end of a 25 or 30 year loan period, you owe yourself hundreds of thousands of dollars, a gaping hole of strange debt will still be growing at the prevailing CPF interest rate. 

4. If you kept your property, paid off the bank loan, and later passed on into the afterlife, the money owed to oneself would be negated. So you're only liable to refund 'your money' if you sell the flat.

I'm not sure if there's going to be a time to be able to make money off HDB flats anymore to even cover the money you owe yourself. You might be stuck with this property you own forever. Or till you kena lottery. 

Added later - Well if you make money from selling your property and the money has to back to your CPF account, you can still buy another property and restart that debt all over again. You just won't have so much money when you retire. But you could rent your flat out. Or migrate to Krabi. Or shack up with the kids. Some of my friends hope to die at 50+. Morbid but that's a thought that making its rounds. 

5. CPF interest rates have stayed at 2.5% for the last 14 years. They used to fluctuate annually, like a lot. There’s some formula now to assess how CPF rates are. Details are here http://mycpf.cpf.gov.sg/NR/rdonlyres/5C7AAE66-A2F1-4DCD-9898-D6D1F37A8FB0/0/InterestRate.pdf

When in doubt, go see your friendly CPF counter staff today. I intend to go see the HDB next about their inheritance rules.

Disclosure May 17 Zouk Singapore

This 'old man' faced a strange dilemma a couple of Saturday nights ago, a situation that indeed defined the meaning of being 'over the hill'. Very simply, to Zouk or not to Zouk? Sounds lame doesn't it? Let me explain. The last time prior to this particular Saturday's flip of the coin I remember starting out at Wine Bar and ending up at Velvet then in Zouk, with plenty of drinks slushed down the gullet to test the liver. What perhaps was more significant was how often I was yawning. At midnight or barely after. I felt embarrassed. I was the foothill of the proverbial mounts in of 'lame old age'. Last weekend I contemplated the consequences of making this journey from home to dancefloor. Would I wake at 2pm with a splitting headache and a robust new injury to my lower back? Should I just catch a movie on HBO and just go to sleep after? I knew what my mum would say "You crazy ah? What time already still want to go out! You and your friends!". The usual. Then I asked myself this one question, one I have been asking myself quite a bit of late: Will I regret not doing it tomorrow? Hmmm. In this case the answer would be yes.

Two young chaps help push me out the door. Well not literally. Disclosure is an electronic dance act from the UK. The band is made of two brothers who are on average just slightly older than half my age. The Lawrence brothers have been making music since their teens. I first heard them on Gilles Peterson show when he played the brilliant ' Boiling'. Then I heard their remix of Jessie Ware's excellent 'Running'. These kids had a knack, and a sound. They were destined for greatness it was clear. They did more work with individuals and released some EPs. In 2013 they released 'Settle', an album nominated for Best British Album and Best Dance Album at the Grammys. They didn't win but my goodness, their singles 'White Noise', 'Latch' and 'F For You' cemented their greatness, and impending rise as transformers to the face of popular dance music.

Settle is no.13 on Rolling Stone's Top 50 albums of 2013, no.6 on The Guardian's list, no.1 on MixMag's list. MixMag wrote "When your grandkids ask you what dance music sounded like in 2013, just give them this album."

The thing I guess is their youth which gives them cause to experiment. Clubbers in the UK start young and they readily associate with Disclosure. Their sound is sizzling but it isn't processed, banal Euro crap. It's fresh and invigorating. These boys take samples and make magic with them. They invent and even sing on brand new tunes. They play live - synth, percussion and Mac for all to see. The best is yet to be for Disclosure.

When one sees the 1-for-1 Midnight Madness sign, one cannot resist. So I spent the next 30 minutes or so trying to get a drink. Of course by then it was no longer Madness but one is compelled to make the best use of one's position bar side having squirmed past 7ft angmoh men who keeping passing glasses of tasty liquid back, shouty girls who seemingly keep meeting, hugging and kissing every other spaghetti strapped, bustier clad damsel in eyeshot, frustrated ah bengs who sigh and moan about the 300 people crushing them from behind. Well such is Zouk. Many will testify to the agony of trying to be cool while in line to quench thirst. It’s bonkers but a necessary club evil.

The exquisite set up by Jeremy Boon got the crowd moving bu antsy and impatient, and there was a minute's worth of a surprisingly cohesive "Disclosure" shouted at the DJ booth. It's was well past 1am beforethe party truly began. The boys came on to mass hysteria. The next two hours or so were raving mad. The tightly packed club held well on. Gyrations, pulses, arms flailing, legs numb, bodies squashed, pushing, shoving, not falling down, drink spilling, picture taking, phone dropping madness of electronic dance. I bet Disclosure were a tad surprised at the warm welcome from the sea of fans in Singapore.

I stayed till after people left when the floor opened up and there was space enough for calisthenics. It got dull and I went home. Happy I made the decision to go. 

Best pix I could get of Guy and Howard