SINGAPORE - Singapore may have scored below the global average in a ranking of retirement adequacy, but that is partly due to the mechanics of how the index is calculated, Senior Minister of State for Finance Josephine Teo said in Parliament yesterday.
For instance, the index gives more points to countries offering tax advantages to companies that provide retirement plans for their workers.
But such plans are less relevant for Singaporeans, she added.
Mrs Teo was responding to a question from Non-Constituency MP Yee Jenn Jong, who noted that Singapore scored 56.4 for retirement adequacy in the Melbourne Mercer Global Pension Index released last October, below the global average score of 63.
Part of the reason was that relatively few companies here have instituted retirement plans for their employees, Mr Yee said.
Citing reports that only about 20 companies in Singapore implement corporate retirement plans, he asked if more firms should be encouraged to do so, perhaps with greater tax benefits.
This could help supplement current pension schemes such as the Central Provident Fund and Supplementary Retirement Scheme, given current worries here about retirement adequacy, he added.
But Mrs Teo said corporate retirement plans are relevant mainly to foreigners here.
Employers in Singapore already contribute "quite a lot" to their workers' retirement savings through the Central Provident Fund system, which foreigners do not benefit from.
She also noted that in the overall score given by the Melbourne Mercer Global Pension Index - which ranked countries on the adequacy, sustainability and integrity of their retirement plans - Singapore beat other Asian countries as well as developed nations such as Germany and the United States.
This article was first published on January 21, 2015.
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