Let me illustrate using an example of two investors with contrasting fortunes. Both investors, Albert and Bob, started with $100,000 in their Ordinary Account (OA) and a limit of $35,000, that is, 35 per cent of investable savings, under current rules.

Albert suffers a major loss and liquidates his investments. His Ordinary Account shows a balance of $30,000. So, what is his limit, post-loss? It is still $35,000.

Bob, however, is successful and doubles his OA to $200,000. What is his limit, post-gain? Also $35,000.

The limit was introduced to protect members. But as these cases show, it will not help Albert, who can still risk investing until he is CPF-broke. And it penalises smart Bob, who cannot invest more of his profits.

Shouldn't the formula be changed to allow smart investors like Bob to exploit the opportunity cost that arises from his substantial gains?

Tan Kok Kiam