Earlier Payouts May Win More S'poreans Over To Annuity: SM

Source : The Straits Times, Oct 22, 2007

Payouts under scheme can be set at age 80 rather than proposed 85, suggests Mr Goh

SINGAPOREANS will be more likely to support the proposed compulsory annuity scheme if they can obtain a payout at an earlier age.

And the 'earlier age' for payouts under the longevity insurance, suggested Senior Minister Goh Chok Tong yesterday, could be 80 rather than the proposed 85.

He said if people can draw on their annuities a few years earlier, they would likely overcome the 'psychological mental block' they now have to it.

Mr Goh was speaking at the third graduation ceremony of the Young-at-Heart! (Yah!) Community College, which promotes lifelong learning among senior citizens.

He said in his speech in Mandarin: 'The proposed age is 85, but I am glad the Minister for Manpower is prepared to be flexible on the payout age for the longevity insurance. I personally think 80 years will be a good alternative.'

Responding to Mr Goh's suggestion, Manpower Minister Ng Eng Hen, who was at another event yesterday, said he thought it is a good one, and noted that the committee set up by his ministry will be asked to consider payouts at different ages because people have different needs - some want payouts earlier, and some, later.

The idea of a compulsory longevity insurance - an annuity scheme that will make payouts to Singaporeans from age 85 till their death - was mooted by Prime Minister Lee Hsien Loong during his National Day Rally speech this year.

Under the scheme, all Central Provident Fund (CPF) members must buy an annuity at age 55 with a small portion of their CPF Minimum Sum.

They will then get a monthly payout of between $250 and $300 once their Minimum Sum runs out at age 85. These payouts will help cover their needs if they outlive their CPF savings.

Many people - unconvinced that they will live past 85 - have not been persuaded on the need for it.

The committee set up to address these concerns and look at proposals will put out a report in about five months.