SINGAPORE: As Singaporeans dwell longer, the Central Provident Fund’s (CPF) philosophy of self-reliance stays as pertinent as ever, Senior Minister Lee Hsien Loong mentioned on Saturday (Jul 5).
He added that whereas there’s “no good CPF system”, Singaporeans are typically in a very good state now.
As society’s wants and dealing patterns change, and life expectations lengthen additional, the federal government should adapt and replace the CPF scheme to maintain it “fit-for-purpose” for brand spanking new generations, he mentioned.
“This might be a perpetual means of innovation and adaptation. However that is the character of many public coverage points,” he mentioned, including that there’s by no means a “once-for-all last resolution”.
The CPF scheme is one such authorities coverage that may at all times evolve and enhance, however the identical may be mentioned of many others, together with housing, healthcare, training and safety, he added.
SM Lee was talking on the launch of a commemorative e-book by CPF to mark its seventieth anniversary at Our Tampines Hub. The launch was additionally joined by Minister for Manpower, Dr Tan See Leng.
On the launch, CPF additionally launched a brand new one-stop monetary steerage platform, Plan Life Forward, Now! (PLAN), the place members can entry a personalised dashboard of monetary planners.
In Singapore, every era funds its personal retirement wants, SM Lee mentioned.
“Whereas self-reliance works nicely for almost all of the inhabitants, we recognise its limits for lower-income employees and for many who haven’t been within the workforce, similar to housewives,” he added.
In these circumstances, the federal government enhances members’ financial savings with focused state help, such because the Workfare Earnings Complement scheme, Silver Help Scheme and tax incentives to encourage voluntary CPF contributions from relations, he mentioned.
The federal government additionally supplies further help by means of packages for the Pioneer, Merdeka and Majulah generations, and periodic top-ups, which ensures a sure diploma of intergenerational fairness.
“However the primary precept stays: You will need to strive your finest to offer in your personal future wants. And if that’s nonetheless not sufficient, the federal government might be there that will help you,” he mentioned.
Trying again on the previous 70 years of CPF’s historical past, SM Lee mentioned “some very robust decisions” have been made in adjusting CPF guidelines and schemes.
For instance, the federal government needed to minimize employers’ contribution charges by 15 per cent in 1985, after the overall CPF contribution charge of fifty per cent from each staff and employers proved too excessive to maintain.
The federal government additionally needed to repeat the method of slicing CPF contribution charges in the course of the Asian Monetary Disaster in 1997, and within the early 2000s after the 9/11 terrorist assaults in the US.
It took them till 2015 to lastly attain the overall contribution charge of 37 per cent, which is concerning the “proper degree for the long run”, SM Lee mentioned.
“NO OTHER PAINLESS WAY OUT”
In his speech, SM Lee recalled assembly the late Lord Paul Myners, a British monetary knowledgeable and UK metropolis minister, who had performed a complete evaluate of institutional investments made by UK insurance coverage firms and pension funds.
“He defined to me bluntly that with folks residing longer, there have been principally solely 3 ways for them to nonetheless have sufficient for retirement: One, save extra whereas working. Two, spend much less each month, to make their retirement financial savings last more; or three, work longer and retire later,” he mentioned.
“There isn’t any different painless means out.”
All international locations are confronted with this trilemma, and Singapore is not any exception.
“However that does not imply there isn’t any means ahead. It’s nonetheless attainable to make balanced, sensible and politically workable preparations in these three dimensions, to make sure Singaporeans’ retirement adequacy,” he mentioned.
The delinking of the CPF withdrawal age from retirement age has made it simpler to lift retirement and re-employment ages to encourage employees to work longer, he mentioned.
Whereas the nationwide retirement age is 63, many select to proceed working, maybe in a lighter job, past that, he added.
SM Lee mentioned that each change to the CPF system should be “rigorously thought by means of”.
“Ultimately, for the entire CPF system to operate and endure, Singaporeans should have religion that the scheme is sound and that the principles finally serve their finest pursuits,” he mentioned.
At the moment, public belief within the CPF is “very excessive”, SM Lee added.
Individuals “faithfully” make their contributions each month, and lots of members voluntarily prime up their very own and their relations’ CPF accounts with money.
Even when members attain 65 years outdated – when CPF payouts begin – about 30 per cent don’t make any withdrawals.
“They’re assured their cash is secure, they usually know that they’re getting greater than a good deal,” SM Lee mentioned.
NEW FINANCIAL PLANNING TOOL
SM Lee penned the ahead of the brand new e-book, known as Save & Sound: 70 Years of CPF, which may be downloaded at CPF’s web site. The e-book chronicles the organisation’s journey over the previous seven many years and paperwork how the CPF system has developed through the years.
By way of its new one-stop monetary steerage platform, CPF members can entry a personalised dashboard which consolidates digital CPF planners, such because the retirement payout planner, residence buy planner and the medical insurance planner.
The dashboard additionally swimming pools collectively curated academic assets and includes a new monetary health questionnaire, the place members can conduct self-assessments on their total monetary well being.
Saying the launch of PLAN with CPF, CPF Board CEO Melissa Khoo mentioned the dashboard seeks to allow members to make extra knowledgeable monetary selections throughout completely different life phases.
“As we mark our seventieth anniversary, we wish to construct on the CPF Board’s legacy of service and innovation, and strengthen our dedication to help members by means of life’s milestones, she mentioned.
CPF may also maintain a CPF70 and Life’s Grocery store exhibitions at Our Tampines Hub, which runs till Jul 10.
At Life’s Grocery store, guests can check out PLAN and register for the CPF Discuss sequence, which is able to cowl periods on housing, healthcare and retirement.
