Committee that will design the scheme tasked with giving Singaporeans a range of options
THE new committee designing the longevity insurance scheme has been asked to come up with a flexible framework that offers Singaporeans a range of options.
For instance, Central Provident Fund (CPF) members in their 60s do not have to take up the insurance, but some may want to opt in to receive lifelong payouts.
Others in their 40s may also want to take it up before they hit 55 - the age when they must buy the annuity - as premiums will be cheaper.
Manpower Minister Ng Eng Hen said yesterday that he wants the 18-member committee to consider such opt-ins when recommending the design of the insurance plan to the Government, and to offer simple choices.
'They cannot be too complicated because then everybody will be confused,' he said after a function at a new health training centre.
'But they must be basic, affordable and flexible because different Singaporeans have different needs.'
Related Video Link - http://tinyurl.com/25vmcmMOM: Let's offer choice, flexibility & affordability in annuity scheme
Simple choices and flexibility will be key in the smooth implementation of the CPF compulsory annuity scheme.
Manpower Minister Ng Eng Hen elaborated on the proposed longevity insurance at a healthcare event today.
He said the Government will consider offering excluded Singaporeans the choice to opt into the scheme, and for those who are automatically covered, to buy into the scheme earlier.
The committee's terms of reference were spelt out later in a ministry statement:
* The scheme must be one which ensures CPF members make adequate financial provision in case they live longer than expected.
* It should give basic and affordable protection for a long life, and flexibility for members to choose from a range of plans to meet their needs.
* It should apply to members aged 50 and below now, but allow others to opt in.
* It should leverage on the CPF system to keep basic premiums affordable - by using a small part of their Retirement Account to buy the insurance when they are 55.
* The committee should consult widely and have channels to get input from Singaporeans. It should engage and consult industry experts to determine fair and cost-effective ways to provide protection.
Its report is expected to be ready within six months.
The ministry also named members of the committee, which will be chaired by Professor Lim Pin, who also leads the National Wages Council. They include representatives from unions, grassroots groups, academia, government, and the private sector.
Dr Ng said he wanted a fairly large committee to represent different views.
For instance, National University of Singapore professor Chia Ngee Choon, 47, has studied the economics of ageing - including how much more women will need to finance their retirement as they tend to live longer than men.
Another member, Mr Johari Mohamed Rais, 60, wants to listen to views from the ground, including reservations and apprehensions that people have about the scheme.
Said the vice-chairman of the Punggol Community Club management committee:
'Some feel it's good because this will make them prepare for old age, but others feel that after working so hard, they may need the money for other things.'
The opt-in idea appeals to technician Loo Say Tuang, 54: 'I've planned for myself up to age 95. But anything can happen and maybe I'll need to use up the money first for medical expenses.'
Ms Noraini Haron, 44, who is training to be a health care assistant, is keen to opt in earlier if she can afford it.
'If I have to sign up later, I might as well do so earlier when it's cheaper.'
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