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Is our CPF money safe?



Yes, your CPF monies are safe as all CPF monies are invested in securities (SSGS [7]) that are issued and guaranteed by the Singapore Government. The full resources of the Government back this guarantee that CPF monies will be paid back. As the Singapore Government is one of the few remaining triple-A credit-rated governments in the world, this is a solid guarantee.

To elaborate further:

a. The Government is in a strong reserves position, i.e. its assets far exceed its liabilities (CPF liabilities in the form of SSGS are a part of these liabilities). The strong reserves position can be seen from the investment returns that are made available for spending on the Government Budget or Net Investment Returns Contribution (NIRC). Over the past five years, NIRC provided on average a revenue stream of around $17 billion or about 3.5% of GDP.

b. What this means is that even after deducting all the Governments liabilities (including CPF monies), the remaining net assets produce significant returns. The NIRC is drawn from returns on assets in excess of the liabilities, not gross assets. (For more information, see summary under Our Nation's Reserves, Section II.) It should be further noted that, as stipulated in the Constitution, the NIRC recorded in the Government Budget only comprises up to 50% of the expected returns on the reserves. The NIRC figures are submitted to the Presidents Office and audited by the Auditor-Generals Office.

c. If the Governments assets had not been adequate to meet its liabilities, there would have been no contribution from the investment returns on reserves in the Government Budget.

[7] Special Singapore Government Securities (SSGS) are non-tradeable Government bonds issued to the CPF Board. The securities earn for the CPF Board a coupon rate that is pegged to CPF interest rates that members receive.

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