ACQUISITION OF SBS SHARES WITH CPF SAVINGS

Maj Fong Sip Chee asked the Acting Minister for Labour (1) how many Central Provident Fund (CPF) depositors have used their savings to acquire Singapore Bus Service (1978) Ltd (SBS) shares and the amount involved; (2) how many of them have since sold their shares and accordingly re-credited their CPF accounts and the amount so re-credited; and (3) that in view of the government's repeated reiteration of late that CPF savings are meant for the safeguard of the depositors in their old age, if he will agree that the decision in allowing depositors to use their savings to acquire shares in the SBS was inconsistent with the objective of the CPF in the first instance and if so, will he not take the necessary action to rescind that decision.

Mr Lee Yock Suan: Neither the Central Provident Fund (CPF) Board nor the Singapore Bus Service (SBS) maintain statistics in the format required by the Member. However, we do have statistics which show that as at 31 Jan 85, 49,998 CPF depositors are still holding SBS shares. The amount involved is $50.7 million.

Since the inception of the SBS Share Incentive Scheme, 142,909 lots (500 shares per lot) have been purchased by CPF depositors with $71.4m of CPF funds. 41,210 lots have been sold and $20.7 million refunded to the CPFB.

The decision to allow depositors to use their CPF savings to acquire shares in SBS is not inconsistent with the objective of the CPF. There is therefore no necessity to rescind the decision. SBS shares- are sound and marketable investments that provide a dividend of 7% per annum and enable their holders to purchase concessionary bus passes. Moreover, CPF depositors who have purchased SBS shares are required to refund their monies to the CPF if and when they sell their shares unless they have attained the withdrawal age. It is therefore as good as keeping their savings in the CPF.