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"The CPF is the biggest Ponzi scheme in Singapore and it is run by the government!"
Heard of this before?
Now, what actually is a Ponzi scheme?
A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop. (Source: Investopedia)
An important characteristic of a Ponzi scheme is the almost continuous need for new investments (contributions) from either new or existing investors.
So, it is unheard of to have a bona fide Ponzi scheme rejecting investments (contributions).
I made a miscalculation last year and because of that I received a letter from the CPF Board recently.
See for yourself:
So, is the CPF a national Ponzi scheme?
I don't know. You tell me.
UPDATE:
Central Provident Fund (CPF) members will be able to grow their retirement savings further next year as the Government will raise interest rates on account balances, the salary ceiling for contributions and contribution rates for older workers.
An additional 1 per cent interest will be applied to the first $30,000 of CPF savings for those aged 55 and above next year, on top of the existing 1 per cent extra interest on the first $60,000 of savings.
This means that the first $30,000 in Special, Retirement or Medisave accounts can earn up to 6 per cent interest.
(Source: The Straits Times, 23 Feb 15.)
Related post:
CPF: Something light and something purple.
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