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Schemes to help older S'poreans

Employment practices
  • The Straits Times (18 April 2013) : Schemes to help older S'poreans 
  • The Straits Times (11 April 2013) : Defusing the retirement time bomb
Schemes to help older S'poreans
- The Straits Times, 18 April 2013

  1. We refer to Mr Paul Chan’s letter (“Defusing the retirement time bomb”, 11 Apr 2013).
  2. We agree with Mr Chan that it is important for Singaporeans to have adequate savings for their retirement. Helping older Singaporeans stay employed is one of the key ways to help them build their retirement savings. We are doing this through measures such as legislating re-employment and providing support to employers through the Special Employment Credit (SEC) to encourage the hiring of older workers. For older lower-wage workers, the Workfare Income Supplement, which has been enhanced earlier this year, supplements the wages and retirement savings of older lower-wage workers.
  3. To help older CPF members who generally have lower retirement savings, the Government has introduced various schemes and strengthened transfers.
  4. The elderly benefit from significant healthcare subsidies, especially for long-term care. This year, we will expand the Senior’s Mobility and Enabling Fund with a $40 million top-up, to provide subsidies for a wider range of assistive devices, as well as healthcare consumables for low- to middle-income elderly. Elderly Singaporeans can also rely on additional assistance through Medifund Silver. We introduced the Silver Housing Bonus and enhanced the Lease Buyback Scheme in 2012 to provide more options for elderly Singaporeans who wish to supplement their retirement income by monetising their homes. In addition, the permanent GST Voucher (GSTV) – Medisave provides an annual top-up of up to $450 to the Medisave accounts of elderly Singaporeans. They can also benefit from an annual GSTV – Cash of up to $250, and up to $260 in GSTV – U-Save.
  5. As one-off assistance this year, the Government is also doubling the GST Voucher and providing a $200 Medisave top-up to all Singaporeans aged 45 and above.
  6. Going forward, we expect retirement adequacy to improve as the educational profile of our workforce improves and lifetime incomes increase. A recent study commissioned by MOM found that young Singaporeans joining the workforce today will accumulate adequate CPF savings for their retirement, and achieve an Income Replacement Rate that compares well with international standards.
  7. Mr Chan has made some valuable suggestions on how the CPF system can be improved. We welcome these and further suggestions from the public as part of Our Singapore Conversation, and will take these into consideration as we continue to review the CPF system. We thank Mr Chan for his feedback.

Defusing the retirement time bomb
- The Straits Times, 11 April 2013

THE editorial ("Avoiding retirement time bomb"; April 1) raises crucial questions. How did we end up with a retirement time bomb when our saving rates are among the highest in the world? Are Singaporeans not saving enough or are they being inadvertently marginalised? Do Central Provident Fund (CPF) savings provide too little for retirement?

The answers will give us an idea of why about 55 per cent of CPF members did not meet the Minimum Sum of $131,000 at age 55 in 2011.

It has a lot to do with Singapore's transformation into an open economy.

Heavy reliance on large multinationals and an imported workforce - foreign professionals and low-skilled foreign labour - for fast growth created trade-offs.

Lowly educated Singaporeans could not cope with the sudden and radical changes. Their savings shrank even as Singapore enjoyed fast growth and inflation rose.

The Government cannot kick the retirement time bomb down the road. It must level the playing field and top up the CPF Minimum Sum of the needy and seniors who fell through the cracks.

The Government should reconfigure CPF contributions, allocating a higher percentage of member contributions, say, 55 per cent, to an Immovable Retirement Minimum Sum.

This sum is purely for retirement needs and cannot be used for other purposes.

Government top-ups and bonuses should go to the Immovable Retirement Minimum Sum first, while the CPF Board should find ways to enhance the yield of this sum to offset inflation.

The CPF Life schemes will be meaningful only if members have adequate retirement savings. An inclusive society should see people having sufficient monthly payments for life in their golden years.