SINGAPOREANS (Plans for retirement)

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SINGAPOREANS:

(Plans for retirement): 4.

Mdm Halimah Yacob asked the Minister for Manpower what action will be taken to help Singaporeans better plan for their retirement following the recent Monetary Authority of Singapore study which shows that only 24% of Singaporeans plan for retirement and a large number do not know how much to save for retirement or details of financial products in the market.

The Senior Parliamentary Secretary to the Minister for Manpower (Mr Hawazi Daipi) (for the Minister for Manpower): Sir, I agree with the Member that Singaporeans must exercise individual responsibility in setting aside enough for their retirement needs. The CPF system is the main pillar to provide retirement funds, but individuals must plan carefully to maintain a balance between their

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retirement, medical and housing needs. The Government will assist by stepping up efforts in helping to educate the public.

In this regard, MoneySENSE was launched as a national financial education programme in October 2003 to enhance Singaporeans' financial literacy. This programme is driven by the MoneySENSE Financial Education Steering Committee, which comprises representatives from MAS, MCYS, MOE, MOM, CPF Board and the People's Association.

Since the launch of MoneySENSE, industry associations, grassroots and other organisations have been involved in raising public awareness about planning early for retirement. For example, a series of "Financial Planning for Families" seminars will be conducted in community centres across the island to educate families on how to plan for retirement. Particular attention will be paid to reaching out to low-income families and housewives to raise their awareness of how to plan for their retirement needs.

The CPF Board, too, has been proactively enhancing the education in this regard for the members. In March 2004, the Board launched a website called "my cpf" to educate CPF members on retirement matters at important life stages. Members, who wish to project how much they would need to save for their retirement to support a desired retirement lifestyle, can also make use of the CPF Retirement Planner on the website. CPF Board also provides information to members to help them plan their finances when purchasing a property. CPF Board will advise members on the amount of CPF funds they may use to service their mortgages. CPF Board also provides timely alerts to members when CPF withdrawal limits are reached.

To reach out to segments of the public which do not have access to the Internet, the Board also organises retirement planning seminars and roadshows in the

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heartlands, such as the one held last month at the HDB Hub that was attended by about 50,000 people.

However, the private and people sectors also have a role to play in educating the public on their retirement needs. For example, both the CPF Board and financial institutions can help CPF members invest prudently. In this regard, CPF Board has been tasked to look into strengthening the oversight of the CPF Investment Schemes (CPFIS) and their products, so that they better serve the objective of enhancing returns on members' savings.

Mdm Halimah Yacob (Jurong): Two follow-up questions, Sir. What other measures can the Ministry of Manpower consider, because I have heard about MoneySENSE and the CPF website but, despite that, the survey done by MAS does show that a large proportion of people still do not understand very much about retirement planning? Many people still do not understand how much they have to save to meet their retirement needs. That shows quite a significant portion, ie, 24%, are not aware. What is even more worrisome is that 42% of those surveyed thought that the amount the CPF will give them monthly will be equivalent to their last-drawn pay, whereas the reality is that, in 2004, of those who reached the age of 55, only 40% were able to reach the Minimum Sum.

Mr Hawazi Daipi: Sir, let me try to put this in perspective. The survey found that, generally, Singaporeans are quite well-versed with the ways and means to save so that they can support themselves when they have retired. They save regularly, they spend within their means and are generally prudent about loan decisions. However, as Mdm Halimah said, quite a number of Singaporeans do not appear to be very clear about how much to save for their retirement and on

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financial instruments that can help enhance their savings for retirement.

In this regard, CPF Board, together with other agencies that form MoneySENSE, will organise a series of seminars at the community level so that they can reach out to even low-income families. I have said earlier that the workers and family heads are quite well-versed in matters pertaining to savings, on how much to save, and so on. These are particularly those who are Internet-savvy. To reach out to those who may not be well-versed in the use of the Internet information, a series of seminars will be conducted. But the CPF Board and its partners that support MoneySENSE should be supported by community organisations in order to educate members of the public. We will also reach out to schools so that students will have better information about the importance of savings and how to save so that they can start saving even before they start working.

We recognise that people generally start acting on savings and financial planning when they reach certain important milestones or stages in their life - when they get married, when they want to buy houses, when they have their first child, and so on. So, CPF Board will target such groups of people so that they can have the best information on and alternatives for savings as well as for enhancements of their savings.

Mdm Halimah Yacob: I wish to thank the Senior Parliamentary Secretary for the explanation. But I think there is a need for the education programme to be more targeted and focused. One area is specifically to educate people on how much they need to save for their retirement because, right now, the programme is very general and not so specific.

One suggestion would be that the Ministry could work with the grassroots

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organisations and even think of coming out with brochures and handouts in the four languages. I think that would be helpful if they are in simple language for people to understand.

Mr Hawazi Daipi: Yes, I think the CPF Board and the other agencies are already doing that, but more can be done. We can seek views from members of the public, and Members of Parliament too, on how much better we can help educate members of the public on how to save and how to enhance their savings so that they have enough for their retirement.