When individual choice cuts both ways

Central Provident Fund policy changes have prompted the Manpower Ministry (MOM) to offer CPF members one-to-one financial counselling to help them make retirement choices. Based on an intuitive understanding of ordinary people's needs, one would deem such counselling useful, given the flexibility now available and the significant implications of the choices made. Members will benefit when rules are explained simply and clearly and fact is separated from the fiction that has dogged the CPF from time to time.

Flexibility and choice, of course, are a boon when cohorts of members have diverse income profiles and requirements. Yet some choices might be plainly bad for an individual and for society if it leads to, say, enlarged Silver Support programmes. Then, how far should the state go to influence people's behaviour - what The New York Times calls the "nudge debate"? Here, in response to an MP's suggestion to nudge family members to top up the CPF savings of housewives via an automatic opt-out scheme, the MOM said it would be "intrusive" to intervene in such family matters.

Setting such a limit acknowledges that there are times when individuals would have more information than an external counsellor on what might best suit their overall needs. But a judgment might be plainly ruinous, given the cognitive biases all are prone to, like ranking short-term above long-term needs. So, when a well-intentioned source "gently biases the context so that you find it easier to do things you think are in your own self-interest", as American commentator David Brooks put it, would that be wrong?

This is a philosophical issue that carries fiscal implications when the state expends considerable resources to support or uplift individuals - like the over $1 billion to be given as credits to adult Singaporeans for lifelong learning, to help constantly upskill workers and give the economy a competitive edge.

How much benign guidance should be offered to ensure SkillsFuture programmes are properly utilised? Some have argued that in the name of freedom of choice, individuals should be allowed to choose what programmes they might like to attend without too much interference from the state. Yet, given the large amounts of public funds being deployed for the programme, it would be remiss of the state not to track to ensure the funds were being used judiciously. While study choices have to fit individuals, it's natural to ask if people are striving efficiently and not at cross purposes. It would be folly to take a carte blanche approach. To avoid pitfalls and wrong turns, there must be wide agreement on the broad direction to be taken.