ANNUITY INSURANCE SCHEME

ANNUITY INSURANCE SCHEME: 19.

Mdm Ho Geok Choo asked the Minister for Manpower (a) what plans does the Government have in terms of other measures to establish a secure retirement other than changes made to the CPF scheme; (b) whether the Government has considered the taking up of annuity insurance to be taken up at the commencement of work just like the CPF; and (c) if he can provide updates on modifications, if any, to be made to the proposed annuity scheme.

The Minister of State for Manpower (Mr Gan Kim Yong) (for the Minister for Manpower): Mr Speaker, Sir, Singaporeans can achieve retirement adequacy by remaining employable, saving enough for their own needs and using their CPF funds prudently. With the recently announced interest rate changes, our projections indicate that a 20th income percentile CPF member, starting work at age 20 at an income of $1,200, can afford to buy a 3-room flat and still meet the Minimum Sum with property pledge when he reaches age 55.

We have also recently made changes so that members who are better off can help other family members. We have expanded the list of beneficiaries who can receive top-ups and increased the maximum sums allowed.

The CPF Board will also step up its efforts to assist members to make better financial decisions for their retirement. The Board has been conducting outreach to members through annual roadshows, as well as online retirement planning tools. It is reviewing other ways to reach out to members. To assist those who want to invest their funds for higher returns, sales and management charges for investment products under the CPF Investment Scheme (CPFIS) were recently capped so as to reduce cost for members. The CPF Board will continue to monitor the CPFIS to determine where improvements can be made.

These measures complement other steps taken by other Ministries. For example, the Ministry of Health has improved the MediShield and ElderShield schemes. The Ministry of National Development has also announced the Lease Buyback scheme. When budget conditions permit, the Government has been making distributions to Singaporeans, and these are usually targeted at the older and less well-off segments of our population. Since 2001 and including the GST Offset package, special transfers from the Government have totalled $11.7 billion.

The Member has also asked whether the Government has made any modifications to the National Longevity Insurance Scheme. The Government has appointed a National Longevity Insurance Committee, chaired by Prof. Lim Pin, to study the options, and to recommend the optimal design for the scheme. The Committee has already begun its work, and its recommendations should be ready within six months. I am sure that in the course of their work, they will have the opportunity to consider the Member's suggestion for the insurance to be purchased earlier than age 55.

Mdm Ho Geok Choo: I would like to ask the Minister of State whether the Government is also engaging some actuarial experts to review the viability of the annuity scheme.

Mr Gan Kim Yong: Mr Speaker, Sir, the Committee, chaired by Prof. Lim Pin, will indeed consult actuarial experts to understand the insurance scheme better and to design a scheme that is suitable for Singaporeans.