SINGAPORE: Recommendations on introducing greater investment flexibility to the CPF system are expected to be released by the end of the year.
The first focus group discussion on alternative investment options took place on Wednesday (Jul 29). About 40 people turned up to offer their views at the focus group, chaired by Professor Tan Chorh Chuan, the chairman of the CPF advisory panel.
Participants were asked to discuss issues such as how they would like to invest their CPF, and how long they are prepared to stay invested. They were given four options to consider: Fewer investment options that still offer a good mix of risk returns; investment options that are well-diversified and passively managed; an option that automatically reduces the portfolio risk as members near retirement; and options to stay invested for the long term.
Some challenges faced by members in investing included difficulty in choosing from the various investment products already available under the CPF scheme and high annual fees for some investment products.
“There are people who are quite happy with the CPF as it is. Then there are some who are quite happy investing – very savvy people who have experience in this,” said Professor Tan. “But what we are hearing also is that there are some who don’t invest, although they might want to because they don’t feel confident or they don’t have the time, or they actually invest some but if there were some simpler lower cost options, they may invest more. I think that area is something we may have to look at, to see if we can provide more flexibility for individuals there.”