CPF Special Account Hack - Are You
Ready? - Part 2
Questions:
1. Should CPF Policies/Rules be
written to benefit the Rich Only? To make the Rich Richer?
2. Should CPF Policies/Rules be
written to benefit those who know the “loophole” only?
3. Should CPF Policies/Rules be written
to benefit those who know how to exploit the “loophole” only?
4. Should “tax payers monies” be
“distributed” to benefit the above “elite” group of people
who know how to Hack?
Why does CPFB allow such Hacks to occur
“undetected”?
A.
Investing via CPFIS-SA: CPFB Rationale
“A
member can choose to invest his SA savings above $40,000 under
CPFIS-SA. However, all investments are subject to risk. Risk refers
to the possibility of losing part/all of your investments due to
financial market changes.
Assuming
a member has $200,000 in his SA and uses $160,000 to invest under
CPFIS-SA. Although he can liquidate his investments after reaching
55, the amount of sales proceeds he will eventually receive is
uncertain and may be less than $160,000.
Depending
on each member’s risk tolerance, investment time horizon, and
overall financial situation, he can decide whether it is safe for him
to invest under CPFIS-SA and liquidate his investments or retain the
savings in his CPF accounts to earn guaranteed interest.
If
he retains the savings in his CPF accounts, he can be assured that
the CPF interest rate structure and computation have been carefully
formulated to provide a guaranteed and reasonable overall rate of
return to members at low risk.”
B. What is considered Offences relating to Investments?
Per CPFB website:
Q:
Will
I run the risk of unknowingly breaching CPF laws while trading or
investing under the CPF Investment Scheme?
A.
As long as your intention is to invest for the medium to long term,
and you did not siphon out any CPF savings by receiving cash for your
investment transactions whether through manipulated transaction
prices or cash rebates, it is unlikely that you will breach the CPF
laws for manipulative transactions.
Our
opinion:
1.
CPFB written the above rule after they “caught” the other
offences some years ago. It only covers the “known” offences.
The Rule was not written wide enough to cover offences they do not
know can happen. That's not how rules should be written, right?
2.
No, the above rule does cover the CPF Special Account Hack
exploiting the “loophole”!
It
states “as long as your intention is to invest for the medium to
long term”!
What
is deemed “medium to long term investment”?
Medium,
you can just google, can cover one to three years!
So
if the member attempt the above Hack when the CPFIS/SA “investment”
was done less than 1 to 3 years ago, it should be considered an offence.
C.
What should CPFB do to punish these offenders?
All
offenders should be punished as follows, at least:
1.
Transfer the amounts they liquidated, from CPFIS/SA into SA, back to their OA.
2.
Claw back all interests paid into their SA accounts.
Stay tuned for CPF Hacks that work!
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