Thursday, August 23, 2007

Tackling aging problem in Singapore (1)

Our PM Lee announced several solutions to the aging problem during the National Day Rally on 19th Aug. More details shall be announced in Parliament next month. Before I pin my comments, I share what they are first.

1. To help Singaporeans work Longer
a) Institute re-employment legislation by 2012, to require employers to offer re-employment to workers reaching 62, up to age 65, and eventually to 67
b) increasing the Workfare Income Supplement (WIS) for older workers

2. Improve returns on CPF savings
a) Extra 1% CPF Interest Rate on 1st $20k on OA and on up to $60k on OSMRA
b) Pegging SMRA to long term bonds rate

3. Make savings last for Life
a) Raising the draw-down age from 62 to 65 by 2018
b) Making annuities compulsory for those aged 50 and below with payout starts at age 85.
SMRA = Special / Medisave / Retirement Account
OA = Ordinary Account


Anonymous said...

Hi i would like to comment on point 3 the annuity.

How many Singaporeans really reach the age of 80. So what if i can get a lump sum at age 80. I will be too old to enjoy this sum of money. Most likely the sum of all this money is going to my children. I do not see any advantage in this. If im old sick, whats the point.

Anonymous said...

All the insurance must be excited about this. $$$ making opportunity. I'm not surprise all this vultures will start flying around. We live in an island where we do not have any choice.

Anonymous said...

Anyhow, should one die before 85, the annunities will go to the kids. So who benefits most. Not the old person but the young kids. This is not the way to go to teach or young generation.

If i have a choice i wont even give a single cent to the insurance firms for this.

Anonymous said...

hey becareful not to put pm's picture on the blog. you might need approval from pms office.

Khiat Han Hwee Adrian said...

I believe the annuity is good for Singaporeans. However for some who have difficulties even meeting half the Minimum Sum, and yet still need to contribute to the annuity account, they may have problem getting a sufficient amount from age 65 to 85.

Annuity works on the principle of risk pooling just like insurance. With a large pool of people and a deferment period of 30 yrs, I believe the amount to be reserved will be in the region of $10k to $15k.

What I'm hoping for is that the Govt will contribute some money to those who are not able to meet the MSS requirement.

Anonymous said...

Remember to leave your CPF mss with CPF and don't be fooled by some unscrupulous insurance agents who tell that annuiuty can take care of you for life. They never tell you how long is for life.
CPF really takes care of you with better payouts and with longevity insurance you dont't worry if you can live to 200 years old.
I have an uncle who was not healthy; he was diabetic;with high blood pressure; whose family members and relatives never lived beyond 70 years, he had an insurance agent from NTUC sold him an annuity . The agent didn't do an analysis, did not disclose other info; told what if he could live to 100 years and that cpf could run out .
You have a lot of agents from ntuc selling annuity with this method. It is as good as swindlering the old people. Is it the way that agents earning a living? No conscience, lah. This is worse than Ah Long squeezing blood from needy people.