SINGAPORE - The National Day Rally this month heralded some significant changes to Singapore's much-discussed retirement fund system.
To provide more state support for lower- and middle-income groups, Prime Minister Lee Hsien Loong announced an annual bonus for the poorest old folk and extended the Lease Buyback scheme to owners of four-room Housing Board (HDB) flats.
He also said rules will be eased so CPF members can withdraw more funds in a lump sum upon retirement, in response to such requests.
But even more notable shifts may lie ahead. An advisory panel is being set up to study further updates to the CPF system.
One area it may look at is giving CPF members more flexibility to invest their savings, so they can take higher risks in the hope of higher returns on their funds.
Whether the current CPF set-up and returns can meet retirement needs is a matter of deep concern for Singaporeans.
A Manulife survey this month showed just a fifth are confident that their CPF funds will be enough for retirement.
Last year, only half of CPF members turning 55 met the Minimum Sum. That included 15 per cent of members who pledged their properties to meet part of it.
Some think higher returns on CPF savings will yield a nest egg better able to withstand inflation.
One proposal being resurrected is letting CPF members pool their money to invest in private pension plans. The funds would be put into a balanced portfolio of assets and managed by private-sector firms, with low fees.
The mix of assets would be chosen with the aim of capital preservation - in other words, low-risk, modest-return assets - to minimise the threat of large losses.
This option has been considered before, to much excitement, but ultimately rejected. In 2003, it was recommended by the Economic Review Committee (ERC) - chaired by Mr Lee, who was then deputy prime minister - as a way to raise returns on CPF savings.
The CPF Board followed up with a consultation paper on this idea in 2004.
It was raised again in Parliament in 2007, but rejected mainly because CPF balances were too low to take the higher risks necessary for higher returns.
Then Manpower Minister Ng Eng Hen said simulations showed most people would be better off with private pension plans. But one in 10 could end up with returns lower than CPF's rates - a risk that could not be stomached, given members' risk tolerance.