SINGAPORE; The National Lifelong Insurance scheme, now called CPF Life, is set to affect families like the Lims.
Sales engineer Edwin Lim is 35 years old and does not have the Minimum Sum of $40,000 in his CPF account right now. His wife, Sharon, is a homemaker and no longer makes CPF contributions.
The Lim familyBut the parents to two boys said they are not worried about financing their old age now, even though they do not have private annuity policies.
"I will not consider it right now because 20 years down the road, I will not know what will happen to me. Probably, near to the age, about 55, then I will consider," said Sharon.
When Edwin and Sharon turn 65 years old, their children, Nicholas and Nigel, will be in their 30s.
But the couple believe they cannot and should not rely on their sons for financial support in their old age.
They feel the new CPF Life is fair and especially applaud the flexibility to choose the lifelong income payout age.
Edwin said that if he had to choose, he will pick 70 as the age to start receiving his CPF Life monthly payout, with two factors in mind.
"I would actually look at my health - how healthy I am at the moment - and secondly, inflation. I would consider buying other private annuities, mainly because I do not think that the government recommendation is enough when I reach that age," he said.
Meanwhile, the labour movement says the CPF Life will make CPF contributions more important than ever.
It also says the CPF Life proposed by the National Longevity Insurance Committee is more attractive than when the scheme was first announced.
The CPF Life has an option of allowing premiums to be refunded, and the monthly payout is also larger.
"Now the CPF (contributions) become even more important than before. Before, CPF Minimum Sum is for 20 years until age 85, now it's going to be a lifelong income, so it's becoming a much more important social safety net. So people must make sure that they regularly contribute to the CPF," said NTUC Deputy Secretary-General Halimah Yacob.
That is why the NTUC has been working for the last one year to encourage the self-employed and contract workers to contribute to CPF.
So far, it has managed to attract 6,000 of such workers to do so. But some 100,000 of them are still not on the CPF scheme.
So what's the advice for those below or above 50, when they look at the CPF Life scheme?
"For those below 50, prudence is still something that one should observe, in terms of using CPF money for housing. For those above 50...., although you're not automatically included (in the CPF Life), the immediate reaction should be, 'I want to be included because it's important, because this is a source that's going to provide me with income lifelong, not just until the age of 85'," said Madam Halimah.
When asked, Madam Halimah said she will opt for refundable premiums with payouts to begin from the age of 80.
The labour movement will explain the new scheme to union leaders on Wednesday. - CNA/ir
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