The latest CPF reforms were finalised after carefully calculating that the government can deliver on what it has promised, said Prime Minister Lee Hsien Loong on Sunday. Chairing a dialogue with five other ministers for some 500 grassroots leaders, Mr Lee said any scheme devised has to be fair to everyone.
The prime minister said a British pensions expert he met recently had said there were only three ways to solve the problem of living longer and providing for old age.
The first is to work longer and enjoy a shorter period of retirement, the second option is to save more while working, and the third is to choose to have less money when one grows old.
For Singapore, the CPF reform is the right thing to do as it will benefit many, especially the low-income ones.
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CPF reforms carefully considered, govt can deliver: PM Lee
He said: "It's not something that is going to make a difference overnight because we are talking about something when we grow old, and you are talking about 10, 15, 20 years from now.
"This is something if we didn't do, it will not disturb us now, it will not affect the next election, nobody will blame us until we are 35 years from now, when the problem is here, then people will say what kind of government did we have 35 years ago, (they) never took care of us. I think it is our responsibility to do that now."
Mr Lee said the CPF interest rate is better than that given by the banks, and he had a tip for wives.
"All the women should tell their husbands that the government's CPF interest rate is now very high, better than the POSBank anytime so better take your money from your POSB (account) and put into my CPF account," he quipped.
The extra one percentage point given by the CPF Board is something Singaporeans will find hard to get anywhere else.
Mr Lee said: "The government is taking care of it – 100-percent risk free. The money is there, it will never disappear. People say go with GIC, Temasek; GIC makes so much money, you should give me the same like GIC. But GIC invests long-term – they buy shares, the stock market goes up, the stock market goes down.
"(In the) last few months, the stock market has gone down. I am sure GIC's portfolio would have gone down. And not just your interest is less – that means your capital gets less. I was persuaded by MOM (Ministry of Manpower) and MOF (Ministry of Finance), against my preference, that it's better for the government to take on this responsibility for the first S$60,000 because it's a big burden."
Measures to ensure that Singaporeans have a secure retirement go beyond just improving the CPF system.
PM Lee explained that the various measures taken by the government to improve the housing programmes, education system and even Workfare all contribute to achieving that objective.
On the Longevity Insurance or annuities, Mr Lee said he is prepared to consider various options.
"You put the money, you buy the annuity, they pay you, you die, (but) they will continue paying your spouse until she dies. That is something we should consider and can be an option in the scheme which will address the needs of quite a number of old folks," he said.
Mr Lee said the CPF changes are major and hopes the dialogue will help community leaders better understand what the government is doing for the country's long-term good. - CNA/so
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