Measures will be rolled out to boost Singaporeans' financial security in retirement, one of which is for CPF Life annuity payouts to keep pace with the cost of living, Prime Minister Lee Hsien Loong said yesterday.
He outlined three ways the Government aims to help Singaporeans to secure an income stream to live on when they retire.
First, it will work towards raising the re-employment age beyond 65 within a few years, to make it easier for those who wish to work longer to do so.
Next, older Singaporeans will get help to unlock the savings in their flats. "Many Singaporeans have significant savings in their flats... yet some still feel asset rich, cash poor," he said.
The Ministry of National Development (MND) is looking into improving monetisation schemes for flats, and increasing their take-up rates. This includes schemes such as the Silver Housing Bonus, which gives seniors a cash grant if they downsize their flats. "(MND is looking into how we can) come up with different variations which are emotionally more continual and easier for people to understand and to accept, and to use without feeling that they are giving up their home or not going to have anything to hand on to their children," he said.
Finally, the Government will look into improving the Central Provident Fund (CPF) and CPF Life annuity scheme so that payouts keep pace with the cost of living.
In particular, lower-income groups who may not have very much put away in CPF will be given "stronger assurance in retirement", he said.
More details will be released at this year's National Day Rally, usually held in August.
Mr Lee also specifically addressed government pensioners who might be worried about having to pay premiums for MediShield Life, the upcoming universal medical insurance programme.
Some in this group, particularly those who retired earlier, already benefit from comprehensive medical benefits for themselves and their dependants, and might not want extra insurance coverage.
While this group of retirees cannot opt out from MediShield Life as it is universal and compulsory, the Government will make sure that they are not adversely affected, said Mr Lee.
The National Wages Council is also looking into helping Singaporeans with MediShield Life premiums as part of its wage guidelines this year, he added.
Parliament is expected to debate MediShield Life in July when it next meets.
Mr Lee said Singapore is increasing social spending at a time when many other developed countries are cutting back due to chronic budget deficits, and stressed that it would be "easy for Singapore, a small country with no resources, to fall into the same problems".
"Strengthening safety nets is the right thing for us to do. But we have to proceed very, very carefully, because it's human nature to want more without wanting to pay more for it," he added.
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