CENTRAL PROVIDENT FUND BOARD (Dependants' Protection Scheme)

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CENTRAL PROVIDENT FUND BOARD:

(Dependants' Protection Scheme): The following Question stood in the name of Mdm Ho Geok Choo -

14. To ask the Minister for Manpower how will the Central Provident Fund Board manage increases in premiums for the Dependants' Protection Scheme by the outsourced insurers.

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Dr Amy Khor Lean Suan: Question No. 14.

The Minister for Manpower (Dr Ng Eng Hen): Mr Speaker, Mdm Ho asked if the privatisation of the Dependants' Protection Scheme, after it is privatised, how would the increase in premiums be protected. Indeed, the privatisation of the DPS enhances the benefits and services enjoyed by CPF members. After the Dependants' Protection Scheme is privatised, members within the scheme will enjoy an immediate increase in the sum assured. Currently, it is $44,000. Under the two private providers whom we have contracted it out to, the sum assured would increase to $46,000, with the same premium. In addition, members aged 55 or older will enjoy a reduction in premiums, which they are currently paying, which is $360. They will pay $260.

Even after it is privatised, the CPF Board will continue to ensure that the premium levels remain affordable and members' interests are protected. Increases in premiums would still be subject to the Board's approval, and it would only be allowed, if both insurers are running losses for at least two years, and it is actuarially established that the premiums cannot be sustained in the long run. In other words, when we asked private providers to bid, there were terms and conditions which they had to comply with.