CPF has charted a middle path between the two ideological extremes of a redistributive welfare state on the one hand and leaving retirement entirely to private initiative on the other hand. As noted above, this was due to a mixture of both the political choices of the colonial government and Lee Kuan Yew's dim view of welfarism. Rather, CPF's policy is at once highly paternalistic, because it severely limits the purposes for one's forced savings could be used, and prizes individual responsibility, because CPF members get back what they put in with no direct redistribution among CPF members. (Whether the interest rates provided by CPF constitutes indirect redistribution – and in which direction – is a complicated question that depends on, inter alia, the rate of return chosen as a benchmark. See below for a class-based analysis.)

This paradox of "active government support for self-reliance" is a common theme throughout many of Singapore's social policies and is acknowledged by the government.((Tharman Shanmugaratnam, 'A Fair and Just Society: What Stays, What Changes?' Speech By Mr Tharman Shanmugaratnam, Deputy Prime Minister & Minister For Finance At The Academy Of Medicine, 23 August 2013, https://www.mof.gov.sg/newsroom/speeches/Speech-By-Mr-Tharman-Shanmugaratnam-Deputy-Prime-Minister-Minister-For-Finance-At-The-Academy-Of-Medicine-23-August-2013.))

It is possible to criticize this paradox from either direction. On the one hand, compared to conventional welfare states, the government is not sufficiently paternalistic in ensuring that Singaporeans have a guaranteed level of social welfare. For instance, Vadaketh and Low argue against the current consensus of minimal welfare spending and in favor of greater redistribution in light of rising inequality.((Sudhir Thomas Vadaketh and Donald Low, Hard Choices: Challenging the Singapore Consensus, Singapore: NUS Press, 2006.)) This paternalism also arguably manifests itself through a class-based lens. There is a ceiling on CPF contributions that workers and employers have to make to the CPF. While this has also been used as a macro-economic lever to reduce wage costs, a la Part 2.1, it also means that income above that ceiling is not subject to CPF and thus lower income workers are effectively mandated to save a larger proportion of their salary. Thus, there is arguably a subtext that lower income workers are in greater need of paternalist mandatory saving. Conversely, in today's low rate environments, CPF risk-free rates of return are actually higher and thus a ceiling on CPF contributions could arguably be framed as ensuring progressiveness by limiting access to CPF's superior risk-free rates of return. I am ultimately agnostic on the utility of a class-based analysis on CPF policy.

On the other hand, compared to leaving retirement entirely to private initiative, there is a risk that CPF policy would create an expectation that retirement is already taken care of by the government thus crowing out individual responsibility for retirement. Consider the Clifford Theseira incident. 72-year-old Mr Theseira claimed on Facebook that he was only receiving $575 per month and thus had to work as a driver on the ride-sharing platform Grab to make ends meet. In response, the CPF Board responded by pointing out that:

• Mr Theseira had already withdrawn roughly S$140,000 from his CPF since turning 55.
• If he had not withdrawn that amount, he could have been receiving a monthly payout of more than S$1,000.
• He co-owns a 5-room HDB flat, which has already been fully paid up
• He has been a member of the Pioneer Generation, and has received many benefits from the package

Understandably, CPF Board's public response is constrained by the political need to portray the government as having done enough for the people. Setting aside the fact that the government disclosed significant aspects of Mr Theseira's financial situation, the implicit message appears to be that Singaporeans can simply rely on government schemes to provide for their retirement. While Singapore has avoided the fiscal unsustainability of defined benefits social welfare in other Western countries, it is worth wondering if paternalistic policies and Singapore's generally effective governance has, somewhat ironically, resulted in a population that expects the government to look after its every need.

I submit that this tension between paternalism and individual responsibility in CPF policy is a continuing source of resentment. The history of CPF has shown that it is not a static policy that the government can "set and forget". Even if we grant that CPF policy should not be used as a macroeconomic tool per Part 2.2 (as I think is the case), it must remain responsive to demographic changes and any adjustments involve difficult trade-offs. Singapore's governance style means these trade-offs are typically resolved and imposed top-down, rather than through bottom-up debate. For this to work, there must be a high degree of trust in the government and, when poorly handled, such policy tweaks can exact a significant political cost, as seen in Part 1.3.

Given the paradox of paternalism and individual responsibility that lies at the heart of CPF policy, short of radical policy change, this paradox will continue to haunt CPF policy going forward. The political costs of policy tweaks can only be managed, not eliminated. CPF policy, at least compared to defined benefits welfare plans, certainly has the benefit of fiscal sustainability, even if I consider the increasing amount of complexity in CPF unsustainable.