Help pioneers struggling with retirement funds

Many Singaporeans remain unsure if their Central Provident Fund (CPF) savings are enough to cover their expenses for retirement, especially in an age of increasing job insecurity ("Many people unsure if retirement nest egg is big enough"; Nov 1)

In the times before CPF was introduced, Singaporeans were individually responsible for managing their own retirement funds, with direct involvement in calculations and planning.

Now, however, the compulsory CPF scheme virtually delegates this responsibility of wealth management to the Government and people no longer feel as involved in nurturing their retirement funds.

Although CPF members were not involved in many subsequent changes concerning the use of funds in the savings scheme, members continued to have faith in the foresight and wisdom of the Government to preserve the sum and value of their savings.

This layer of separation is one of the reasons for the increased uncertainty over whether those savings are sufficient. The other issue is that of depreciated savings.

Over the past decades, Singapore has gone from Third World to First World. Crucially, Singapore has become one of the most expensive cities in the world to live in.

Over the past decades, Singapore has gone from Third World to First World. Crucially, Singapore has become one of the most expensive cities in the world to live in.

For those members of the pioneer generation whose savings were accumulated during the tumultuous nation-building years, the subsequent rise of the Singapore economy has resulted in their earnings being worth less than before.

With waves of higher income sweeping through the employment market, the CPF sums held by pioneers is running out of sync with the rest of the population. Rising water did not lift all boats, given the income inequality in our society.

The pioneers, who toiled through their prime years in a fledgling nation, are now faced with a double whammy - depreciating savings and insufficient retirement funds.

As the Government has focused on economic growth as its foremost priority, it has overlooked the need to arrest this unhealthy trend.

The Government should increase subsidies, enhance transfers with generous conditions, and incorporate mini golden parachutes in the Silver Support bonus scheme for pioneers so that the twilight years of this generation of Singaporeans can be enhanced.

Paul Chan Poh Hoi

A version of this article appeared in the print edition of The Straits Times on November 14, 2015, with the headline 'Help pioneers struggling with retirement funds'. Print Edition | Subscribe