CPF Board is organising a contest whereby 3 iPads and 50 vouchers worth $55 can be won in their lucky draws.

The lucky draws will be held monthly from July to December 2010, held in conjunction with CPF’s 55th Anniversary. To take part, just visit the website here to post your retirement wish.

Terms and Conditions

1. The lucky draw period is from 26 June 2010 to 31 December 2010.

2. There are ten $55 shopping vouchers each month for the monthly draws for July to November 2010, and three Apple iPads (16GB, 3G/Wi-fi, without data plan) for the grand draw for December 2010.

3. Participants may submit multiple entries. To qualify for the lucky draw, participants must be Singapore citizens or Singapore permanent residents. CPF Board staff are not eligible for the lucky draw.

4. The lucky draw winners will be selected randomly. A participant can win a maximum of one $55 voucher in the monthly draws for July to November 2010, and one iPad in the grand draw for December 2010.

5. The monthly draws will be conducted within one week after the end of each month. Lucky draw results will be published at the CPF website. Winners will be notified by the CPF Board via email after each of the five monthly draws and the grand draw.

6. Winners of the shopping vouchers will receive their prizes via mail within a month after the results are announced. Winners of the iPads will be informed to collect their prizes in person at the Board’s premises at Robinson Road.

7. The CPF Board reserves the right to use the winners’ names, photographs and retirement wishes in its publicity or promotional materials, if they had agreed to such usage at the point of submitting their entries.

8. In case of any participant’s misconduct, fraud or abuse, the CPF Board reserves the right to disqualify the entries of the participant. Entries generated via script, macro or other automated means will also be disqualified. The CPF Board also reserves the right to disqualify any participant/entry without having to enter into any correspondence on the decision.

9. The CPF Board reserves the right to make any changes to the My Golden Egg lucky draw rules at any time without prior notification, and reserves the right to replace any prize with another of equivalent value without notice.

10. The CPF Board reserves the right to, in their discretion, cancel, vary or suspend the My Golden Egg promotion should technical bugs or other causes beyond the Board’s control affect the administration, security or proper operation of the lucky draw.

11. The CPF Board is not required to enter into any correspondence regarding the administration of the lucky draw, and its decision on any matter is final.

To help Singaporeans save more for their medical and retirement needs, the Government will increase the employer CPF contribution rate by 1%. The increase will be done gradually in two steps to moderate the impact on employers.

The first 0.5% increase will be implemented on 1 September 2010, and will be made into the Medisave Account (MA). The remaining 0.5% increase will be effected 6 months later on 1 March 2011, and will be made to the Special Account (SA).

The Medisave contribution rates for Self-Employed Persons (SEPs) will correspondingly be increased by 0.5% on 1 September 2010.

CPF will be holding a talk to cover some common issues that people reaching the age of 55 have with regards to their CPF and retirement.

• How much of my CPF savings can I withdraw when I reach 55?
• How do I build up my retirement savings? (In my opinion, this question might be too late to be asked at age 55)
• What about the CPF savings I have used for property, investment or education?

If you would like to know the answers to these questions and learn more about CPF rules applicable to you from age 55, join them at this complimentary talk specially designed to help prepare you when you turn 55.

Date : 23 Feb 2010
Time : 7:00 pm sharp to 8:30 pm (Light refreshments served from 6:15 pm)
Venue : 6 Shenton Way, DBS Building Tower 1, DBS Auditorium, Level 3, Singapore 068809
Closing Date for Registration : 22 Feb 2010

Click here to register.

If you depend on financing your home property loan using your CPF OA, do you know that you might be hit with a scenario where you can’t use your OA to pay for your housing many years down the road? (This does not apply to new HDB apartments purchased using a HDB loan)

Here are three terms you need to be aware of:

• CPF Withdrawal Limit
• Valuation Limit
• Available Housing Withdrawal Limit (AHWL)

CPF Withdrawal Limit

This is the maximum amount of CPF that you can use to pay for your housing. It varies from 150% to 120% of the loan amount depending on when you bought the property. From 1st Jan 2008 onwards, the limit is 120%. Note that if you refinance your housing loan, the prevailing CPF withdrawal limit will apply to your new loan.

Depending on the interest rate of the loan, the CPF withdrawal limit is likely to be hit towards the 2nd half or tail end of the loan.

Once this limit is hit, you can’t use any more CPF monies to pay for your housing loan.

Valuation Limit (VL)

This is the lower of:

• Purchase price of property
• Valuation of property at time of purchase

Once your CPF withdrawals (for paying the property) reaches the VL, you will not be able to use your CPF to pay for your housing loan unless you have the Avaliable Housing Withdrawal Limit (AHWL).

Obviously, the Valuation Limit will be hit before the CPF withdrawal limit is hit. It can also be reached in the early years of a loan if someone uses spare monies in the OA to pay down the housing loan rapidly.

Use this CPF calculator to estimate your CPF Withdrawal Limit and Valuation Limit.

Avaliable Housing Withdrawal Limit (AHWL)

For those below 55, the AHWL is the balance available after setting aside the Minimum Sum component. Savings in the OA, SA and amounts withdrawn for investment can be used to meet the prevailing Minimum Sum cash component.

CPF has a  calculator that helps you estimate your AHWL.

While the terms might sound confusing, any potential property owner should definitely try to understand the implications of these limits on their housing loan repayments before they buy any new property (or refinance an existing one).

Not doing so might result in an unpleasant surprise many years down the road, especially if there is not enough free cashflow to be diverted towards the housing loan.

It was reported that Temasek Holdings will be issuing 10-year USD bonds to generate cash to fund it’s own business as well as it’s subsidiary companies.

The offer is expected to be at least US$500 million with the coupon rate yet unknown. For the previous 10-year bond issuance in 2005, the coupon rate was 4.5%. Temasek is looking to pay a spread of 1% over the equivalent US treasury bills, so the coupon rate could be close to 4%.

The bonds have been rated AAA by S&P and Aaa by Moody.

This brings us back to the commonly asked question: Should we be paid a higher interest for the monies in our CPF Ordinary Account?

Granted the bonds will be issued in USD, but could Temesek have issued bonds in SGD, and pay a coupon higher than 2.5% to the CPF board? Even the 10-year Singapore government bond is giving a yield of close to 2.85% currently.

A higher interest paid on our long term Ordinary Account funds (which are locked in) will go a long way towards helping people with their retirement funding.

100k earning 2.5% over 20 years will become 163k.
100k earning 3% over 20 years will become 180k.
100k earning 3.5% over 20 years will become 199k.
100k earning 4% over 20 years will become 219k.