The Ministry of Manpower has released more details on the newly-formed National Longevity Insurance Committee, which will make recommendations on the compulsory annuity scheme, known as the National Longevity Insurance Scheme. According to the ministry, the committee needs to recommend the design of the annuity scheme, which should be able to provide basic and affordable plans for CPF members.
The scheme, which applies to CPF members who are now 50 and below, must be flexible as well, so that members can choose from a range of plans to meet their various needs. But it must also allow others to opt-in.
Another requirement is that the scheme must leverage on the CPF system to keep basic premiums affordable, and allow members to use a small part of their Retirement Account to buy the longevity insurance when they turn 55.
The 18-member committee is made up of unionists, academics, grassroots leaders and representatives from both private and public sectors.
The committee's report is expected to be ready within six months.
Manpower Minister Dr Ng Eng Hen said some are concerned that if they do not live till 85 to enjoy the payout from the insurance, they may not get their money back. One suggestion is to pay an extra premium on the longevity insurance, so if a person dies, the money goes to his or her dependants.
Dr Ng also stressed that the scheme must be flexible.
"Different Singaporeans have different needs. Some have no dependants. And they actually want their longevity insurance to start earlier, maybe 75. I say why not? Let's see whether it can be done.
"Some don't want so much dependence on longevity insurance because they have other streams of income, and they say 'I don't want to pay a lot to buy the longevity insurance, I want it to start at 95'. I say again, why not? The committee should consider this.
"So as long as we give options for Singaporeans, I think that this is easier to implement."
Dr Ng added, "I hope Singaporeans understand that if we can put this in place it would mean a lot because future generations would benefit and all of us would have a little more confidence in our future." - CNA/ac
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