Manpower Minister Ng Eng Hen has said the CPF Board will over the next year aggressively encourage Singaporeans not automatically included in the new CPF Life, to opt in.
He was speaking a day after the National Longevity Insurance Committee released its recommendations on the lifelong income scheme.
Dr Ng also believes that the majority of Singaporeans, about 70 to 80 percent who qualify for CPF Life, will opt for annuity payouts to start at age 80, the default age. Related Video Link - http://tinyurl.com/257btj
This so-called "Refund 80" Plan is the option which strikes a balance between the amount of monthly payouts and the amount to be left behind for the beneficiaries when the member dies.
Dr Ng, who is 49 years old, would automatically qualify for CPF Life. So which Refund Plan does he have in mind? Though he has not made his pick, he does have one regret.
"That we couldn't introduce it earlier. It is for all those aged 50 and below. But we want an opportunity for all those older than 50 years to opt in, in other words, for CPF Life to cover all those older than 50," said Dr Ng.
He said in devising the CPF Life scheme, the government was concerned about the baby boomers - those in their late forties and early fifties now - when they retire.
Dr Ng added: "For those who are older, they have large families to depend on, most of them, anyway. But (not) for the baby boomers... With this piece, CPF Life, it's a great weight lifted off one's shoulder.
"Now, it's transferred to the other shoulder, the CPF Board, to shoulder this. The foundations are much stronger, we now have a tool to address longevity."
The CPF Life scheme gives Singaporeans about the same amount of monthly retirement income as the CPF Minimum Sum payout.
The difference is that the annuity income under the CPF Life scheme is for life whereas the payouts under the existing CPF Minimum Sum will last for only 20 years.
In fact, the National Longevity Insurance Committee had explored if the Minimum Sum payout period could be extended to 30 years.
"But that would have meant a reduction of what you got under the older system. Even at 30 years, you will still miss out those who live longer than 30 years from age 65, say, beyond 95," Dr Ng said.
"The committee came to the same conclusion that if we did that, it's not a sensible option and that annuities is a much (more) sensible option, and you get about the same payout, more or less compared to the old system, but for life," he added.
The Manpower Minister revealed that the Prime Minister and his Cabinet colleagues had been discussing over the past three years the need for Singaporeans to have enough savings in their CPF to last their lifetime. And CPF Life is the missing piece which will complete Singapore's CPF system.
Dr Ng said that the ball is now in the CPF Board's court. It will soon embark on an extensive public education exercise, with simple handbooks and guides in the four languages to explain the CPF Life scheme to Singaporeans. - CNA/ir
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