RONALD LEE: The Malaysia version of our CPF is the EPF – Employee Provident Fund.
And for the year 2017, the EPF declared its highest payout since the financial crisis of 1997 – 6.9 percent.
Meanwhile, our CPF interest rate has stagnated at 2.5 percent since 2001.
But let’s compare apples to apples – while our CPF interest rate has remained stagnant for the past 16 years, Malaysia’s EPF interest rate has steadily increased over the past 16 years, with 2017 marking a 27 percent increase from 2001.
Take a look at the EPF table yourself.
Let’s now compare oranges to oranges:
Malaysia’s EPF mandates that employer’s pay more in contributions than employees you 11-12% vs towkay 13 %)
Singapore’s CPF mandates that you contribute more than your boss (you 20% vs towkay 17%)
Malaysia’s EPF rises when the economy improves
Singapore’s CPF (2.5% up to 4 %) remains unchanged constant despite economic recovery
Malaysia’s EPF is separated from government reserves.
Singapore’s CPF is managed together with government reserves
Malaysia’s EPF is managed by professional fund managers.
Singapore’s CPF comes under the hands of mostly former civil servants appointed by the gahmen
The question that comes to mind is how Malaysia, our supposedly “shabbier” sibling from the same mother, manages to consistently offer higher payouts than the Singapore government does.
The next question is, with the Singapore government constantly reminding you that CPF interest is “protected” from fluctuations in global markets, how Malaysia continue to give its citizens higher interest rates on its pension funds for the past 40 years in spite of global market fluctuations.
With the government looking to expand taxation rates and avenues, it’s time to look into whether we’re getting a good deal from the government.
