http://siewkumhong.blogspot.com/2007/09/speech-on-ministerial-statement-on-cpf.html
Malaysia's EPF has better returns than Singapore's CPF...
Malaysia's EPF has better returns than Singapore's CPF...
In a 2006 paper[1], two NUS economists argued that CPF members have not benefited from the power of compound interest. They estimated that from 1987 to 2004, the real rate of return credited to CPF members was only 1.2% per annum. This was contrasted with an equivalent rate of 3.39% for EPF members in Malaysia. This shows just how poor CPF returns have been, when compared with other countries provident fund systems.
7. Now, the Minister has announced an improved rate of 3.5% for up to $20,000 in the Ordinary Account. Lets put that into perspective.
8. Since last December, insurance company Aviva has advertised a product called BIG e. This insurance product targets CPF members, providing a guaranteed return of 3.5% per annum for CPF funds parked with it, subject to a minimum investment of $5000. Aviva fixes this rate every month in advance, but it has stayed at 3.5% since the product was introduced in December 2006. Funds invested with Aviva can be withdrawn at any time without penalty.
9. How is Aviva able to offer such a product and still make profits? Why cant the CPF Board match Avivas rate for all CPF balances in the Ordinary Account? My laymans perspective cannot comprehend this, and I hope that the Minister would explain.