Crossing That ‘85’ Barrier

Source : TODAY, Monday, September 24, 2007

Govt addresses Singaporeans' concern about living long enough to enjoy benefits of plan

EVEN as details of the sweeping Central Provident Fund (CPF) reforms are being defined and debated over, the Government must first coax Singaporeans past a key psychological barrier: The scepticism that they will live beyond age 85.

Yesterday, just four days after he urged his parliamentary colleagues to sell the new policies to the ground, Manpower Minister Ng Eng Hen was out doing just that, in the company of a high-powered panel led by Prime Minister Lee Hsien Loong.

For more than two hours, in a rare and candid dialogue signalling the importance of the move, they heard and addressed the concerns of some 550 grassroots leaders, unionists and community representatives gathered at the Grassroots Club.

One key issue that emerged: Singaporeans wondering if they would live long enough to enjoy the benefits of the proposed annuities scheme.

The statistics have been reported: That about one in two of those who turned 62 last year will live beyond age 85, while one in seven will live to 95. But while these might "convince the brain", real-life examples were needed to "touch our hearts", said one grassroots leader.

"I'm wondering if the Community Development Councils would have stories of people who might be in financial difficulties but would be better off when such measures are in place," he told the heavyweight panel that included Mr Lim Boon Heng, Minister in Prime Minister's Office; union chief Lim Swee Say; Second Minister for Finance Tharman Shanmugaratnam and Mr Gan Kim Yong, Minister of State for Labour and Education.

There is also a perception that the longevity insurance scheme would result in "taking money away" from the "poor and sick", and handing it to the "healthy and well-to-do" who would live longer, said another grassroots leader, Mr Goh Keng Hwa.

To this, Dr Ng said the scheme would be worked out by professional actuarists in such a way that those expected to live longer would have to pay higher premiums.

Said Dr Ng: "If, indeed, it shows that if you are richer, you live longer … you have to pay a higher fee."

Mr Lee added: "But I don't think we can say that only rich people grow old. I've been to old folks' homes. A lot of people (there are) more than 80, 90 years old and have no money. Those are the ones we are worried about."

On suggestions that the annuities scheme be on an opt-out basis, Mr Lee feared that many Singaporeans would simply adopt a short-sighted approach.

He said: "There will be some who don't have a family to look after them but they need the money now, maybe to pay off debts. And they say, 'Don't worry, I'll take the chance. I won't live till 85 years old.'"

The Government cannot leave such citizens to their own devices, in the eventuality that they do live until a ripe old age, said the Prime Minister.

What was important, he added, was to ensure flexibility — for example, CPF members could choose the duration of coverage and whether to leave any money for their beneficiaries.

Under the proposed longevity insurance scheme, if one dies before age 85, the amount goes into the common pool and the payouts for those still living. One Kebun Baru grassroots leader took blunt issue with the fact the money would not automatically be returned to the family.

He said: "The Government's concern is to look after the citizen from cradle to grave. But before they reach their grave, you already rob their tombs." The Government, he added, should allow Singaporeans to "enjoy life" while they can. "Why do you need so much money when you are 85? You are bo gay (toothless)… the most you (can do is) buy the best pei dan chok (century egg porridge)," he said.

Mr Lee replied that that was a sure formula for old-age suffering. He quipped: "Bo gay, you cannot enjoy life. Bo gay and bo lui (no money), it's worse!"

But Mr Lee said he was prepared to consider options — such as having the annuity plan continue, after the member's death, paying the surviving spouse for the rest of his or her life.

Given that there is no way to predict how long any one person would live, union chief Lim Swee Say urged the grassroots leaders — and all Singaporeans — to accept the reforms in the knowledge that society, as a whole, would benefit.

Said Mr Lim: "Whether you are convinced that you will live until 85, 95 or 100 is not important, because all these policy changes are not about ourselves, it's about everybody."

The slew of CPF changes includes deferring the Minimum Sum drawdown age and increased interest rates for the Special, Medisave and Retirement Account.