There is obviously some nastiness afoot as the big launch date for the Mandatory Provident Fund looms closer. Among the tricks employers have dreamed up to escape their 5 per cent contributions to the fund have been reclassifying a heavy portion of salaries as housing allowances or laying off their workers and hiring them again as contract labourers who can sort out their own pension arrangements. These are not new tricks. Employers have practised them for years in more developed countries to get around the benefits their governments have legislated for employees. Our Government may succeed in making a few such employers follow the official line but odds are it will not find them all. However, if you want to see real provident fund nastiness there is a different sort in Singapore where the authorities have just ruled that employer contributions to the Central Provident Fund (CPF) will rise from 12 per cent to 16 per cent in January. Employer contributions were temporarily reduced to 10 per cent last year to help employers over the effects of the regional financial crisis but the goal is to raise this figure back to 20 per cent, the same as employees pay. The guiding rule in Singapore is that 40 cents for every dollar you make goes to the CPF. Ouch! But there is more. The rationale for raising employer contributions, according to the Singapore Ministry of Manpower, is that economic growth is resurging and, in the absence of a higher CPF increase now, wages would increase by a larger amount, making it difficult to restore the CPF rate in subsequent years. Now isn't that sweet if you happen to be a struggling worker in Singapore? You might have thought that a return to a booming economy would produce a higher disposable income for you but, no, your government wants to take it away from you again before you get a chance of getting it in your own hands. Of course you are told it is all being done so you will get a comfortable retirement income in your declining years. How laudable. One immediate problem with this is that CPF has already been in existence for a long time and yet when you divide the CPF total amount due members by the number of people in the labour force (ignoring beneficiaries already retired) you get the equivalent of less than HK$200,000. This may seem a tidy sum but it is hardly enough for a comfortable retirement and certainly not what you would expect those stinging 40 per cent contributions to have produced. Scurrilous journalism and total distortion, says the official chorus from Singapore. CPF members can withdraw money before retirement for a range of approved expenses and investments, including homes and even some stock market purchases. They do it all the time. This is why the total amount held is not higher. It is true. In fact recently they have been withdrawing more than they contribute and you cannot really blame them. The trouble with the CPF is that those outstanding balances are not invested on an arm's-length basis by professional outside managers. They are instead invested by the Government of Singapore. It is not always easy to trace where the money goes but mostly it is poured into infrastructure projects such as an enormous airport for a postage stamp-sized country, or schemes to attract foreign industrial investors who come because Singapore will subsidise what might otherwise be non-viable businesses for Singapore. Not surprisingly, the CPF generates relatively poor returns on investments made more for national policy reasons than returns to beneficiaries. This is why so many people rush to take their money out when they can and this is the principal reason those outstanding balances grow so slowly despite 40 per cent contributions. So if you think there are nasty aspects to the MPF, there may well be, but other people are much worse off on similar schemes.