IN HIS commentary, Mr Christopher Gee made a good case for not encumbering the Central Provident Fund with unnecessary flexibility ("CPF investments: Too much choice may end badly"; Monday).
The CPF is a nationwide retirement savings scheme. Those calling for more flexibility in the system may have confused investments with savings.
I had previously written about the risk of ending up with less than one's target retirement savings if the money is used in high-risk investments (" 'Life-cycle funds' not ideal for CPF investors"; Aug 1, 2013).
The CPF will never be adequate for the average Singaporean's retirement, not when life expectancies and the cost of living are rising. The real impact will be felt by those who outlive their life expectancies.
It is best not to risk one's nest egg. More flexibility in the CPF system will not solve the problem of a longer "spending period".
For those who have accumulated more than the Minimum Sum and want the flexibility to use their CPF savings to generate higher returns, I suggest they avoid this risk.
Instead of cluttering the CPF with a myriad of options, thus adding to operating costs, it would be better to have another low-cost entity to invest members' surplus funds.
A non-governmental organisation, such as a co-operative working under a trust, could be appointed to run an investment pool. The group should not take any risks as the funds are meant for retirement.
The smaller enterprise would be niftier and able to handle the flexibility required by some CPF members.
Geoffrey Kung
