Last Updated on 23, August 2015
There was a case in which a man nominated his entire CPF to his ‘goddaughter’. Although his widowed wife tried hard to contest the nomination, she failed and incurred legal costs equivalent to the amount of CPF money the man had!
Someone wrote to the Straits Times suggesting that CPF Board regulate the distribution of CPF. I decided to write to the Straits Time forum:
I AGREE with Mr Liew Kai Khiun that there is a need for greater regulatory intervention with regard to Central Provident Fund nominations ("Exercise more oversight of CPF nominations"; last Saturday), but there is always the risk of over-regulation.
Many people are already unhappy over limitations on how much CPF savings a person can withdraw at age 55. Regulating the manner in which one can bequeath one's CPF money would only increase the unhappiness.
Besides, a CPF member may have valid reasons for wanting to bequeath his savings to a person who is not related to him. For example, his family members may have already inherited a large portion of his estate through his will and insurance nominations, or as joint owners of properties.
Requiring the CPF Board to scrutinise the status and history of families and dependants would be an invasion of privacy, and the Board may find itself getting embroiled in family disputes.
Rules to restrict the distribution of CPF funds to just family members can also be easily circumvented, as the CPF member can use the money to purchase property or stocks, and then bequeath these to another person.
Instead, I suggest that a family member be required to provide written consent in order for the CPF member to nominate an unrelated person. This can be incorporated into the nomination form, and will save the CPF Board from having to look into members' private matters.
Update 11 December 2014: Agnes Sng felt that the individual should have the absolute right to select his own nominee: CPF members should be free to pick nominees
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I have been reading your articles for quite sometime and want to thank you for sharing your knowledge unselfishly. However, regarding the point you mentioned in this article :-
” Instead, I suggest that a family member be required to provide written consent in order for the CPF member to nominate an unrelated person. This can be incorporated into the nomination form, and will save the CPF Board from having to look into members’ private matters.”
I think we are already been regulated and limit on how we can use our OWN CPF money, to further enhance this restriction by havng a written consent by family members before nomination is a added burden to members CAUSED if 1 or 2 disagree, the money can not be dominated to the person deem deserving by the CPF member.
On this particular incident, no one except the family members knows (or may be they also dont know) what happens that leads to the decease acted this way. For a husband and father to disregard his spouse, family members interests and instead transfer all financial means to a third party who says she dont know the decease well (but money going to her) is really ???????
But to enforce a law to require family member consent in domination is rather in Chinese saying “use cow knife slash chicken”. (moreover, domination is supposed to be secret) Instead I would prefer like what you menioned in your earlier article also that they, the family member or wife can appeal to court under the ground of spouse or children financial needs responsibilty required by the decease to stop the assets flowing out just like that.
Imagine a person lying in REN-CHI hospital for 10yrs and hardly anyone came to visit him and he decided to dominate his CPF to the care person or persons who shower, cleans, feeds, walk, talks and take care of him with love, patient and sincereity all this while when he dies. Whos to say he is wrong? and who in the family will consent it?
Wilfred Ling says
Agree there could be legitimate reason why a person would want to give all his assets away to unrelated person.
But who is going to judge what is legitimate and what is not legitimate ? Currently it is the Court which decides. Legal fees to seek justice to the courts is astronomical. The layperson just cannot afford it. Look at this widow who already spent $37,000 in legal fees (equivalent to exact amount of the CPF money). She still lost her case. In other words, her losses doubled as a result of trying to seek justice from the courts. End of the day, only lawyers are the winners.
In majority of other countries which practice Civil Law, they practice forced-heirship in which certain percentage of a deceased estate is distributed to family members.