Forum Replies

We refer to the letter "What safeguards are there for Central Provident Fund (CPF) savings?" (The New Paper, 1 Mar) by Chua Choon Huat, who said that the "discrepancy" in government estimates of the FY2007 Budget raised concerns about whether CPF funds could be manipulated or misappropriated.

2. There is no basis for such alarm. The Government's revised estimates for the FY2007 Budget have nothing to with accounting errors or omissions. The revision reflected the exceptional GDP growth and boom in the property market in 2007, both of which exceeded forecasts that were made a year ago. The result was stronger than expected Government revenues, especially from income taxes and stamp duties.

3. There is hence no basis for suggesting that controls over Government accounts or monies might be weak, and for going on to suggest that CPF savings are insufficiently protected.

4. CPF savings are invested in Special Singapore Government Securities (SSGS), hence the interest rates and principal amounts placed in all CPF accounts are guaranteed by the Singapore Government. CPF savings can only be withdrawn by members or on their demise, for their beneficiaries. To ensure that the trustee duties of the CPF Board are properly carried out, its financial statements are reported to its Board of Directors quarterly, and audited by the Auditor-General's Office and presented to Parliament yearly.

CHIN SAU HO
DIRECTOR (CORPORATE COMMUNICATIONS AND SERVICES)
MINISTRY OF FINANCE

JEAN TAN
DIRECTOR (CORPORATE COMMUNICATIONS)
MINISTRY OF MANPOWER