Mr Wilfred Ling wrote about the solvency of CPF Life ("Guarantee CPF Life solvency for peace of mind"; last Wednesday).
We assure him that the CPF Life scheme is designed to be fully sustainable.
First, monies in the CPF Lifelong Income Fund and interest paid on the monies are already fully guaranteed by the Government.
Second, if interest rates or life expectancies change significantly from what is expected, payouts can be adjusted to keep the fund solvent. This is in line with the best practices of well-run and sustainable pension schemes.
For these reasons, CPF Life does not need to be covered by the Policy Owners' Protection Scheme in Singapore, which covers insurance policies written by private insurers.
CPF Life members can be assured that they will receive payouts for as long as they live.
Income Security Policy Division
Ministry of Manpower
This article was first published on Aug 18, 2014.
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