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THE objections of Singaporeans to an upcoming compulsory scheme for old-age support will be largely addressed in the recommendations of a committee tasked to design it.
It is suggesting to the Government that the annuity plan be made more flexible and to allow for refunds.
Let Singaporeans who die before reaping the full sum of the premiums they had paid get back the unused amount, suggested the 18-member committee. Return the money to their families, it added.
Also, give Singaporeans the choice of deciding at what age they want to start getting money from their annuity. The monthly amounts will then be adjusted accordingly.
These are among the five key recommendations from the Government-appointed committee, whose chairman Lim Pin gave a preview on Wednesday of the probable shape of the scheme.
Another recommendation is to let the CPF Board run it. Yet another idea is to rename Longevity Insurance as Life-long Income, to underscore its mission: to give Singaporeans a regular income for as long as they live.
Most of these recommendations were hinted at last month when Manpower Minister Ng Eng Hen and Professor Lim told The Straits Times that the committee was mulling over them.
With the latest disclosures, Prof Lim believes people's unhappiness will be alleviated.
However, not everyone must buy the annuity. Singaporeans who do not have enough in their CPF Minimum Sum need not do so, Similarly, those older than 50 this year. But they can opt in.
The committee, following feedback, is also recommending exemptions for the medically unfit, those with private annuity plans and civil servants with pensions.
Full details of the plan will be revealed in a report on Feb 12. The Government will respond later that same week.
The need for the annuity plan was announced by Prime Minister Lee Hsien Loong at last year's National Day Rally. With an ageing population, Singaporeans need to buy annuities to have an income for life, he said.
The committee carried out three months of public consultation before drawing up the recommendations. In all, the views of 600 people were collected.
They were commenting on an original proposal that wanted those below age 50 to use part of their Minimum Sum to buy the annuity. Payouts will start from age 85. This way, a safety net is built for the 1.52 million active CPF members, because the Minimum Sum is not lifelong but stops making payments after 20 years.
Many Singaporeans, however, were upset by the plan. They either baulked at losing their capital sum should they die early, or chafed at being compelled to be in a plan they feel does not benefit them.
The consultations highlighted three areas of concern to Prof Lim. 'My gut feeling is that...these are the issues: refundability, options of age payout, and also they want CPF to run the show.'
And these are now addressed, he said.
On people's choice of the CPF Board to administer the annuity, Prof Lim noted its 'favourable interest rate structure' compared to private-sector players.
But the issue of refundability is a key one, he said, noting wryly: '(It's part of the) Asian culture - you must leave something for your relatives.'
On whether it will raise costs and, in turn, premiums for Singaporeans, Prof Lim said the CPF Board will absorb the administrative costs.
The choice of when to start getting the payouts will have to be made by a Singaporean when he turns 55. Otherwise, the default age at which the payouts will begin is 80.
xueying@sph.com.sg
INDEPENDENT SURVEYS CONFIRM S'POREANS LIVING LONGER, SINGAPORE
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