Two Reasons Why Scheme Will Not Be Received Well

Source : The Straits Times, Sept 29, 2007

IN PRINCIPLE, the concept of a compulsory annuity scheme is good for the people.
However, I strongly believe that two areas of this scheme will not be well received by annuitants.

First is the withdrawal age of annuitants at 85 years old. Many will not expect to live to this age and beyond. I took a simple survey. Randomly I took out an issue of The Straits Times (Sept 25, 2007) and turned to the obituary page. Of the 26 advertised, only one - Madam Eng Pheck Kheng, aged 91 - managed to pass the 85-year-old mark. Nine with ages stated were below 85 years old. The rest, whose ages were not published, looked like they were between 40 and 75 years old.

Also my late mother, the youngest among her 10 brothers and sisters, lived the longest at the age of 84. All of them were born in China, suffered extreme hardship both physically and mentally in China as well as during World War II in Singapore, and yet none could live up to the age of 85.

It is difficult to believe that many of the annuitants of this generation doing mostly sedentary work can live up to 85 and receiving their annuities.

Secondly, on the withdrawal sum of about $300 in 30 years' time, this is a pathetic amount. Taking into consideration an average inflationary rate of 2 per cent annually, this amount will shrink to $180.

The $180 annuity may be just enough to buy three meals, some clothing and footwear and a haircut. There will be no roof over their heads, nor any money left for transport, not to mention medical treatment.

Raymond Lo Wan Mou