CENTRAL PROVIDENT FUND MEMBERS (Education programme on investment)

The following Question stood in the name of Mrs Yu-Foo Yee Shoon

Mrs Yu-Foo Yee Shoon: To ask the Minister for Manpower, in view of the fact that members of the Central Provident Fund Board can use their funds to buy stocks and shares and as they may not be familiar with the operation of the stock market, whether he will cause (i) an education programme on investment to be conducted for them and (ii) safeguards to be introduced to prevent their funds from being unduly exposed.

Mr Yeo Guat Kwang (Cheng San): Question No. 10, Sir.

Dr Lee Boon Yang: Mr Speaker, Sir, the CPF Investment Scheme provides an opportunity for members to enhance their old age savings through long-term investments. CPF members participating in the Investment Scheme must, however, exercise prudence and judgement in their investments. Currently, CPF members who wish to participate in the Investment Scheme must first have sufficient CPF savings to meet the full Minimum Sum requirements. Thereafter, they can invest only up to 80% of the available savings. This provision serves to prevent CPF savings from being over-exposed to stocks and shares at the expense of CPF members' basic retirement needs.

Sir, with regard to investor education, the CPF Board holds regular seminars for its member to encourage proper financial planning for retirement. Investor education is also provided by CPF Agent Banks and organisations, such as Investment Management Association of Singapore (IMAS). The Investment Management Association of Singapore has launched several initiatives to increase public awareness as well as educate the public on the benefits of collective investments and professional fund management. It has already provided fortnightly articles on investments in The Sunday Times and the Lianhe Zaobao. It is working towards providing more information and guidance at a website on the Internet. Sir, the Association is also working with Radio Corporation of Singapore (RCS) on investor education programmes over the radio. Other groups are actively developing TV programmes, seminars and magazine series for investor education. Such initiatives will help to educate the investing public and guide CPF members who wish to invest their savings. CPF Board encourages IMAS and other organisations' efforts to provide more investor education. Nevertheless, Sir, I would like to emphasise that at the end of the day, CPF members participate in the CPF Investment Scheme at their own discretion and must be accountable for the outcome of their investment decisions.