Consider Making CPF Annuity An Opt-In Plan

Source : The Straits Times, Forum, Sep 6, 2007

I AM happy the Government is looking beyond our current needs when it proposed the idea of a CPF annuity. While the intention is good, the execution can be further improved.

Rather than make it compulsory, the authorities may want to consider the following suggestions:

Adopt an opt-in scheme for Singaporeans. For each dollar Singaporeans put into the annuity scheme, the Government will fork out an equivalent amount (or a certain percentage) which is contributed to the annuity.

When the individual dies, the balance of the annuity paid by the individual goes automatically to his next of kin. For those who are single or do not have children, the balance is channelled into a common pool. Those who are better off can opt in to channel the balance of their annuity to the common pool as well. The portion contributed by the Government also goes into the common pool to be shared.

In this way, Singaporeans can be rewarded for their hard-earned contribution to the country's reserves. We all accept that our reserves are meant for a rainy day as Singapore has no natural resources. We also note that when our reserves are invested for growth, it may mean some unexpected loss.

Another way to invest our reserves is to carve out part as an expense to jump-start a worthy cause - a caring scheme for those who have contributed to the progress of Singapore.

I believe this scheme will help the masses. I hope the authorities will consider it as a win-win solution to further this worthy cause.

Yeo Kim Gek (Ms)