SINGAPORE Aug 17 Singapore is to reform its
mandatory retirement savings scheme and will provide greater
support to low-income pensioners, the Prime Minister said on
Sunday, in response to growing public criticism of the system.
Providing for Singapore's ageing society is one of the
biggest challenges facing Lee Hsien Loong's government, with the
present enforced savings system threatening to erode dwindling
support for his ruling People's Action Party, which won its
lowest ever share of the vote in a 2011 election.
Singapore's Central Provident Fund (CPF) has won widespread
international admiration for the way it forces citizens to put
aside money to fund their retirement, healthcare and housing
costs, but many people are unhappy at the rate of return on
their CPF savings and a rise in the minimum sum they must save
before making withdrawals.
A survey published last week by insurance firm Manulife
found that only 20 per cent of Singapore investors believed that
their CPF accounts would cover their needs in old age.
"People are living longer and we need to provide more money
for longer retirement," Lee said in his keynote speech at the
National Day Rally, adding that poor retirees who have not been
able to save enough during their working lives - estimated to be
10-20 percent of pensioners - will be given an annual "bonus"
after turning 65.
The government will also allow people to make some lump-sum
withdrawals after they have retired, rather than receiving only
"We need to build more flexibility into the CPF system and
give CPF members more choices," Lee said.
Though Lee said that the minimum sum savers aged 55 and over
must have in their retirement accounts before making withdrawals
would rise again next year to S$161,000 ($129,348), from
S$155,000, he said that he doubted there would be any more
(1 US dollar = 1.2447 Singapore dollar)
(Editing by David Goodman)