Source : The Straits Times, Fourm, Aug 30, 2007
NOW that the brouhaha has settled down somewhat over the recent proposal for a compulsory annuity, I believe the issue is not as complicated as it is made out to be.
Currently, most of those who reach the age of 55 leave their Minimum Sum with the Central Provident Fund (CPF) Board for a higher monthly income from age 62 till it runs out rather than buy a life annuity which pays less but for life.
So, logically, if a person chooses the life-annuity option, he should be exempted from the proposed life-annuity scheme as he is already covered for life.
Hence, only those who leave their Minimum Sum with the CPF Board should be subject to the compulsory-annuity scheme.
Statistics show that only half of those aged 62 will live beyond 85.
So it is only fair that only those who have not covered themselves for life contribute to the scheme and insure one another.
Mohamad Rosle Ahmad
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