MP Tells Why She Fully Supports CPF Reforms

Source : The Straits Times, Sept 25, 2007

I REFER to the Insight special on CPF reforms (ST, Sept 22). Journalist Li Xueying had raised a number of issues for discussion, one of which referred to an NMP's comment that making annuities compulsory is the start of a slippery slope where the Government 'interferes' in what is essentially CPF members' own money. She asked if I agree.

I replied that Government's job is to intervene where necessary. That is what we are elected to do. Singaporeans will have to judge whether the intervention has helped to create better results.

As a CPF member myself, I fully support the reforms. These are my reasons.

The most significant changes include the higher interest rates on CPF savings and the enhanced Workfare Income Supplement for mature workers. At the same time, Government will push the drawdown age later and introduce longevity insurance.

The higher interest rates are not a one-off measure affecting very few. Instead, it will benefit all CPF members and Government will pay at least $700 million more each year in interest payments to members. The enhanced Workfare will help many low-wage mature workers, and the price tag of $400 million a year is not low.

These are long-term commitments which will help Singaporeans provide for their retirement needs in significant ways.

These commitments must not only be met by the present Government, but also by future governments. To be sustainable, they must not place unreasonable burdens on future generations of Singaporeans. I think we should be prudent and stick to the present commitments for a start.

Likewise, compulsory annuities are a financially prudent and hence more sustainable way for Singaporeans to plan comprehensively for their retirement.

We do not like all the CPF reforms. But most would agree that changes are needed to better prepare us for our ageing population. With these changes, we have taken big steps in the right direction.

Josephine Teo (Mrs)
Member of Parliament (Bishan-Toa Payoh)