CPF scheme 'a sustainable safety net system'

Some six in 10 of today's CPF members aged 55 and older will enjoy 6 per cent returns on their savings, while some eight in 10 will earn at least 5 per cent.

People's Action Party (PAP) candidate Foo Mee Har laid out these statistics at a press conference yesterday to refute Reform Party's statement that the Central Provident Fund (CPF) scheme gives Singaporeans only 2.5 per cent in interest on most savings.

She and her three West Coast GRC teammates, who are taking on a Reform Party (RP) slate, said that the CPF scheme was a sustainable safety net system.

The PAP candidates dismissed the RP's proposal to replace it with a permanent pension of $500 a month.

Ms Foo highlighted enhancements to the CPF system made this year after a review of the system.

These include raising the salary ceiling from $5,000 to $6,000 to increase the amount of salary that can attract CPF contributions, and an additional 1 per cent interest on the first $30,000 of balances for older Singaporeans.

She said that these measures addressed retirement adequacy and kept the system sustainable.

Minister in the Prime Minister's Office S. Iswaran criticised his opponents' proposals for being ad hoc and questioned how the party planned to foot the bill.

Minister for Trade and Industry Lim Hng Kiang also said that returning all CPF savings at the age of 55, as the RP has called for, will be good if every person can look after himself.

"But what if they can't? Then where is the social safety net for such people who cannot look after themselves?" he said, adding that they would have to manage for another 30 years, and noted that Singaporeans' lifespans are getting longer.

"And the Reform Party recognises that, because if they believe that if you return (CPF savings) to the people at 55, they all take care of themselves, then they don't need that extra $500 to be given to every senior citizen above 65."

Mr Iswaran also dismissed as "ad hoc" the RP's proposal of reducing the number of years of national service and replacing it with a professional army, saying that this would worsen the manpower crunch.

"We already know the manpower challenges we face. Their proposal is to freeze foreign manpower, and at the same time you want to have additional draws on Singapore's limited manpower now to create this professional army," he said.

"I think you don't need to be a very sophisticated demographer or statistician to work out the sums. The numbers just don't add up," he added.

RP chief Kenneth Jeyaretnam later responded by suggesting that those serving national service be used "more productively" and paid market wages.

"(The Government) can spend more money on higher tech armaments and drones, asymmetrical warfare, rather than having so many foot soldiers," he said.

joseow@sph.com.sg

This article was first published on September 8, 2015.
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