Costs of Pioneer Generation schemes exceed fund balance by $785m, Govt to top up where needed: Report

SINGAPORE – The projected costs of schemes under the Pioneer Generation Fund exceed its remaining balance by about $785 million, a parliamentary committee scrutinising government spending has found.

The Government will top up where necessary to fulfil its commitments, though it does not seek to exactly match the fund’s liabilities each year, the Ministry of Finance said in a report on the committee’s work presented to Parliament on Aug 11. 

MOF was responding to questions from the committee, known as the Estimates Committee, on whether balances are sufficient to cover the costs of this fund and two others: the Merdeka Generation Fund and the Majulah Package. 

These three funds were established to support older generations of Singaporeans and provide tiered support to those born in 1973 or earlier. They do so through top-ups to beneficiaries’ healthcare and retirement funds, among other subsidies. 

The committee urged the Government to continue monitoring the sustainability of all three funds and to continue reviewing subsidy and payout levels under them to ensure they provide adequate coverage against rising healthcare costs. 

In its report, the committee said the Pioneer Generation Fund would need to be topped up further as the estimated liabilities currently exceed its fund balance.

Such top-ups will happen through the annual Budget process, it noted. 

On discovering that the Pioneer Generation Fund’s estimated liabilities exceed its balance, the committee asked MOF to clarify the assumptions underpinning the sustainability of the fund – which pays out to Singaporeans born on or before Dec 31, 1949.

It was established in 2014 with $8 billion, and had $5.17 billion in balance against $5.96 billion in estimated liabilities, as at March 2025, said the report. 

The report said the fund’s remaining liabilities include MediSave top-ups, additional outpatient care subsidies, CareShield Life additional participation incentives, special MediShield Life premium subsidies, and the Pioneer Generation Disability Assistance Scheme.

The Government regularly reviews the estimated liabilities and utilisation trends of the Pioneer Generation Fund to ensure its sufficiency, MOF said in the report. 

It also regularly reviews subsidy and payout levels under the Pioneer Generation and Merdeka Generation funds to ensure that they provide sufficient coverage against rising healthcare costs, MOF said in response to the committee’s queries about the impact of healthcare inflation on the long-term sustainability of the funds. 

MOF assured the committee that the Government will continue to monitor healthcare costs, utilisation patterns, labour force participation rate, mortality rate and life expectancy, where relevant, to ensure each fund’s sustainability, the report said. 

As at March 31, 2025, around 450,000 seniors had benefited from the Pioneer Generation Package, it added. Of these, around 300,000 seniors were still alive.

Meanwhile, the Merdeka Generation Fund, which mostly supports Singaporeans born in the 1950s, had $5.46 billion in liabilities against a remaining balance of $5.5 billion, as at March 2025. It was established in 2019 with $6.1 billion.

The Majulah Package Fund, which pays out to Singaporeans born in 1973 or earlier, had about $5 billion in balance as at December 2024, against estimated liabilities of $3.78 billion recorded in March 2025. It started with $8.3 billion. 

As at March 2025, the average amount each beneficiary received from the Pioneer Generation Fund was $11,800. The figure was $2,800 for the Merdeka Generation Fund, and $2,600 for the Majulah Package Fund.

The committee also said any significant findings arising from the Government’s regular reviews of each fund’s planning assumptions and projections could be shared with Parliament, “to ensure prudent planning and intergenerational fiscal balance over successive terms of governments”. 

In a statement following the report on Aug 11, the committee’s chairman and MP for Pioneer Patrick Tay said the committee narrowed its focus to three areas: monitoring of government funds, the utilisation and outcomes of the National Productivity Fund, and the future energy transition. 

The committee’s other members are PAP backbench MPs Edward Chia, Gabriel Lam, Shawn Loh, Nadia Ahmad Samdin, Ng Shi Xuan and Diana Pang, as well as WP’s Aljunied GRC MP Gerald Giam. 

Funding for future sources of energy

On the future energy transition, the committee asked the Government for clear intermediate milestones and review points to assess the effectiveness of the $10 billion Future Energy Fund (FEF).

It was established in 2024 with $5 billion to fund infrastructure for generating and transmitting low-carbon energy, and projects safeguarding Singapore’s clean energy supply security. It received another $5 billion in 2025.

The committee inquired into two broad matters: the utilisation of the FEF as well as broader considerations on energy transition, the report said. 

The FEF has not been used yet, MOF said in the report in response to questions from the committee on whether there are milestones to review if outcomes are on track. 

The ministry said: “Drawdown of FEF monies will occur in the coming years, after careful consideration of the viability, reliability and cost-effectiveness of the energy pathways.”

Each project funded by the FEF will be subject to the same progress assurance mechanisms that are applied to other major government projects, MOF added.

The Government has not split the $10 billion between the infrastructure and supply-security objectives, and said any earmarking is premature, given the uncertainties. 

The committee said it appreciates the need for flexibility, given the uncertainties involved, but recommended regular reporting of the fund’s commitments and clear intermediate milestones to assess whether the energy transition is on track.

It also asked if the FEF can be used to develop new capabilities for the purposes of nuclear energy, and if it will be used for the first phase of a technical assessment by the International Atomic Energy Agency (IAEA).

Singapore will undergo an assessment by the agency – which is the UN’s atomic watchdog – in 2027 to determine if the country is ready to make an informed decision on whether to deploy nuclear energy.

In response, MOF said should Singapore eventually decide to deploy nuclear energy, the FEF could be used to support the infrastructure for a nuclear power programme.

But it will not be used for the IAEA assessment because it does not entail any infrastructure development for Singapore, nor has Singapore decided to deploy or pilot nuclear energy, MOF added.

The committee has met four times starting in November 2025, the report said. 

On the National Productivity Fund, the committee urged the Government to continue outreach to smaller enterprises to ensure they are aware of and able to access the range of productivity and innovation support available. 

This fund was established in 2010 and is scheduled to receive a $6 billion top up in the 2026 financial year.