CPF affected by high inflation?

[Hephaestus]

http://www.straitstimes.com/STForum/Story/...ory_808456.html

 

The Straits Times

www.straitstimes.comPublished on Jun 8, 2012

CPF Minimum Sum should reflect 'true' inflation

 

THE report ('CPF Minimum Sum to be raised'; May 31) stated that the Government has decided to raise the Central Provident Fund (CPF) Minimum Sum from $131,000 to $139,000 from July, instead of $143,000.

 

The reduction is aimed at cushioning CPF members from the impact of the acute, inflation-driven spike, spreading the balance of $4,000 until the new target date of 2015.

 

When Trade and Industry Minister Lim Hng Kiang addressed the concerns over rising inflation in Parliament ('When big policies impact the little man in the street'; May 15), he cited big-ticket items like housing rentals and car prices as being responsible for the bulk of inflation. As most Singaporeans own their homes, the issue of rents is irrelevant to citizens, he explained. As for private cars, only a small part of the population buy cars, so the majority of people are also not affected by the high inflation.

 

If these are the reasons for rising inflation, why is the Government applying the full annual inflation rate when adjusting for the increase in the Minimum Sum?

 

Shouldn't the Government moderate the figure downwards - say, to two-thirds the actual inflation rate - to recognise that some major contributors to inflation do not affect most CPF members?

Young Pak Nang

 

Copyright

Edited June 7, 2012 by Hephaestus

[Ghostami]

If I use layman calculation of just dividing, wao, its a 9% increase to $143000 if given the full dosage, nnb my pay also never increase that much, no wonder why I always feel poor....

[Evillusion]

This Young Pak Nang really outspoken. As always the miw will justify themselves to increase everything except our pay!

[Maroon5]

watch this guy in 2016. looks like building brownie points for the big day.

[Maroon5]

This Young Pak Nang really outspoken. As always the miw will justify themselves to increase everything except our pay!

 

roti prata, rubber band, double standards, shift goalposts....can anyone help add more?

[Wt_know]

i guess ah gong and ah ma is planning to bug NEW flat (skyhabitat) and car (991 porky) ... otherwise, inflation should not be affected much according to a wise man explanation

 

Edited June 8, 2012 by Wt_know

[Hephaestus]

i guess ah gong and ah ma is planning to bug NEW flat (skyhabitat) and car (991 porky) ... otherwise, inflation should not be affected much according to a wise man explanation

 

global trotter ah gong ah ma?

[Good-Carbuyer]

I believe high inflation affected by CPF too

[Celicar]

If I use layman calculation of just dividing, wao, its a 9% increase to $143000 if given the full dosage, nnb my pay also never increase that much, no wonder why I always feel poor....

Not if you follow what Lim Suay Suay says - just look at your CPF account and you will feel very rich.

[Evillusion]

Not if you follow what Lim Suay Suay says - just look at your CPF account and you will feel very rich.

U heard wrong...he said ' when he sees our cpf he feels like a leech'

[Hephaestus]

The Straits Times

The Straits Times

Published on Jun 23, 2012

Printed from straitstimes.com

 

CALIBRATING INFLATION FOR CPF MINIMUM SUM

Govt can't have it both ways

 

 

IT IS difficult to understand how the Ministry of Manpower's reply ('Increase doesn't fully reflect total inflation'; June 15) addresses the point made by Mr Young Pak Nang ('CPF Minimum Sum should reflect 'true' inflation'; June 8).

 

Imputed housing rentals and private road transport do not affect most people who are at least 65 years old when they draw down on their CPF Minimum Sum.

 

Therefore, inflation related to these two items should be excluded when adjusting the target Minimum Sum (which is stated in 2003 dollars) for inflation.

 

Alternative inflation indicators, which exclude the effects of imputed housing rental and private road transport, are readily available and should be used.

 

Second, the ministry's reasoning that some of the factors that led to higher consumer price index inflation last year are cyclical and likely to even out over the long term is contextually flawed.

 

A person reaches the age of 55 years only once in his life, at which point he sets aside his Minimum Sum.

 

If, for example, the cumulative consumer price index since 2003 is higher than the corresponding cumulative consumer price index excluding imputed housing rental and private road transport, it is no comfort to him that the difference may even out after his 55th birthday because he would have already set aside his Minimum Sum.

 

Finally, the ministry's point that this year's Minimum Sum increase did not fully reflect last year's consumer price index inflation cannot be taken to mean that the ministry did not intend to use last year's consumer price index inflation.

 

Rather, consumer price index inflation was used, but the ministry determined that the increase in the Minimum Sum was too large to go down well with the affected 55-year-olds and decided to moderate the increase.

 

The ministry will use the full cumulative consumer price index inflation to determine the Minimum Sum next year (and every year in the future), and then decide whether or not to moderate the formula-based increase.

 

The conclusion is obvious: The ministry should use a more appropriate inflation indicator such as the consumer price index excluding imputed housing rental and private road transport when adjusting the Minimum Sum for inflation.

 

It doesn't make sense for the Government to tell us that inflation due to imputed housing rental and private road transport does not affect most of us, but at the same time adjust the Minimum Sum for inflation as if it does.

 

David Boey

Copyright

[Wt_know]

there is nothing you can do until 2016

 

It doesn't make sense for the Government to tell us that inflation due to imputed housing rental and private road transport does not affect most of us, but at the same time adjust the Minimum Sum for inflation as if it does.

Edited June 23, 2012 by Wt_know