Lee Boon Yang
Singapore
“6 The other guidelines are that there must be a post office sited within 5 km of every private residential estate and within 1 km of any commercial or industrial estate. MAID LEVY CONCESSION (Applications by the disabled) 32.”
“Madam, can I quickly respond to the point on assistive technology? Certainly this is an area of interest. We cannot say that we have the capability at this juncture but we will certainly look into what is possible and work with our ICT sector.”
“Nevertheless, if the spouse of the homemaker is working, he will be eligible for WIS if he satisfies the criteria. Husbands of homemakers are further eligible for tax relief.”
“Sir, I do not think it is quite correct to say that we always expect our own artists to perform for free or do public service. There are, of course, occasions where we do seek Singapore artists and arts companies to contribute to the national causes. For instance, when we went international for Singapore Season in China.”
“Ms Sylvia Lim asked the Minister for National Development (a) what checks does the Ministry or the National Environment Agency have in place to prevent mistaken payments to hawkers who cease operations due to upgrading works at hawker centers; (b) how did the mistaken payment of $18,000 to Mdm Lee Ah Muey come about; and (c) what will the…”
“While it was also true that initially the reaction or the response of the licensing authority was that foreigners should not participate in such an event at the Speakers' Corner - because there is already an existing prohibition against any foreigners taking part in any activities at the Speakers' Corner - subsequent assessment resulted i…”
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“Sir, there is a limit to how many HDB flats can be made available to the foreign workforce in Singapore. We must bear in mind that HDB builds flats essentially to serve the needs of Singapore citizens, be it by way of sale of flats to them or by rental flats to the lower income group. It is only when there are surplus rental flats available that HDB can set aside some of these flats for the foreign workers or for the employers to rent en bloc and use them to accommodate their foreign workers. So there will always be a limit. We should not take the position that HDB should go all out to provide accommodation for the foreign workforce in Singapore.”
“Sir, I would expect that when employers build dormitories for their workers, particularly if such dormitories are located in their factories, they will consider this factor about providing some recreational facilities for their workers who are living in the dormitories.”
“Mr Speaker, Sir, the vast majority of foreign workers in Singapore work in the manufacturing sector, the construction sector and as domestic workers. Domestic workers, of course, live with their employers in the employers' residence, while most construction workers stay in workers' quarters on construction sites. As for manufacturing workers who are mainly Malaysians, some of them live in rented HDB flats or private residences while others live in Johor Bahru and commute daily across the Causeway to work in Singapore. The Government is aware that some employers with a large number of foreign workers have difficulties providing proper accommodation for their foreign workers. To increase the supply of foreign workers' housing, the Ministry of National Development has allowed employers to build dormitories within their factory premises for their foreign workers. There is also a scheme for employers to lease State land to build and manage dormitories for their large foreign workforce. In addition, the Ministry has also begun to sell residential sites on 60-year leases to provide lower cost private housing for foreign workers and Singaporeans. The Government will continue to monitor the situation and look into new measures to overcome the problem of accommodation for the foreign workforce.”
“Sir, as I said, the Tripartite Review Committee on the Employment Act released its report and recommendations on 13th July. The Government has indicated that it accepts the recommendations of the Review Committee and will initiate the procedures of amending the Act in due course. FOREIGN WORKERS IN SINGAPORE (Housing) 10. Mr Chia Shi Teck asked the Minister for Labour (a) what are the major groups of foreign workers in Singapore; (b) how are they presently housed; and (c) whether housing for them has become a problem and how he proposes to solve it.”
“It has recommended that claims from non-manual employees with a monthly salary exceeding $1,500 should also be eligible for adjudication as long as their claims fall within the provisions of the Act which apply to them or arise from their employment contract with their employers. This would remove an anomaly where non-manual employees with a monthly salary exceeding $1,500 are covered by the provisions in the Act outside Part IV. The proposed amendment which has been accepted by the Government will enable such employees earning more than $1,500 and are non-manual in the nature of their work, to pursue their claims through conciliation, leading on to adjudication in the labour court, instead of having to engage their own lawyers for such purposes in the civil courts.”
“Sir, permit me to explain. The salary ceiling is also applicable to section 115 of the Act. Currently, section 115 empowers the Commissioner for Labour to adjudicate claims arising from the provisions of the Employment Act and from employment contracts by non-manual employees who fall within the prescribed salary ceiling of $1,500 and all manual workers. It has been the practice of the Ministry to settle their disputes through conciliation. When they have problems with their employers, they can come to us and we will try to conciliate between the aggrieved employee and the employers. It is only after our conciliation has not been successful and we cannot find an amicable settlement that we take one step further by registering their claims for adjudication in the labour court. They could proceed to seek adjudication of their claims if they cannot resolve it amicably through conciliation. For the non-manual employees earning more than $1,500 per month, up to now, we can only provide them with our conciliation service, because the Commissioner, as the law stands, has no jurisdiction under section 115 to adjudicate their claims. Should the conciliation fail in such a case, ie, a non-manual employee earning more than $1,500 and has a problem with the employer and we cannot resolve it through conciliation, under the present situation, he would have to seek legal recourse on his own at the courts. If the Member recalls, on 13th July, the Tripartite Review Committee on the Employment Act released its findings and recommendations. This was widely reported. The Tripartite Review Committee, in fact, had particularly reviewed section 115 of the Employment Act.”
“Employers can recruit Work Permit holders from Malaysia as well as non-traditional sources (NTS), such as the Philippines, Thailand, India, Bangladesh and Sri Lanka. In general, Malaysians are allowed to work in all sectors of the economy while NTS workers can work only in the construction sector, the marine industry and as domestic workers. BIDS FOR NEW CAR REGISTRATION NUMBERS (Collections) 31. Mr Chia Shi Teck asked the Minister for Communications how much is collected each year from 1989 to 1993 on the sale by bidding of new car registration numbers and whether he will consider granting the proceeds of such sale to the Community Chest. Mr Mah Bow Tan: The yearly collections from the bids for new car registration numbers are as follows: Year Collections ($ m) 1989 3.3 1990 2.9 1991 3.7 1992 5.1 1993 7.1 The proceeds from bids for car registration numbers cannot be set aside for specific purposes like contributions to the Community Chest. Like all others fees and charges collected by ROV, they form part of Government's overall revenue, which is used to finance public expenditure that benefits all Singaporeans. Such expenditure includes contributions to Voluntary Welfare Organisations for their social welfare projects. FUEL OIL USED IN POWER PLANTS (Sulphur content) 32. Dr Kanwaljit Soin asked the Minister for the Environment what is the sulphur content of fuel oil used in power plants in Singapore and whether there are plans to further reduce the percentage of sulphur.”
“Since the implementation of the retirement age law, the Ministry has received 63 applications for exemptions. Of these, 29 have been approved, six rejected, nine not pursued further after consultation with the Ministry and the rest are still being processed. The six rejected applications and the application still being processed are from companies seeking to exem2pt employees who are engaged in occupations that require younger people to perform the jobs. FOREIGN WORKERS (Restrictions of type of work) 30. Dr Kanwaljit Soin asked the Minister for Labour whether there are any restrictions on the type of work that foreign workers from different countries are allowed to do and whether work permit holders are only allowed to come from certain countries.”
“Mr Speaker, Sir, job-hopping is not a new problem. It is not something that has just arisen as a result of our economic growth of 9.9%. Job-hopping is a problem that has been encountered for many years already. The problem itself is aggravated each time there is exceptional economic growth. There have been many proposals to solve this problem of job-hopping in the past. In 1988, a task force on job-hopping was formed under the auspices of the Singapore National Employers' Federation. They made an in-depth and very comprehensive study of the problem of job-hopping and recommended several proposals to overcome this. Most of the recommendations focused on improved personnel management practices and more efficient use of scarce labour resources. The task force found that they should leave the problem of job-hopping to employers to tackle. They felt that it should be the employers' responsibility, apart from training their workers, to also encourage their workers to remain loyal to the company, and to remain with the company for as long as possible. PROMOTION EXERCISE IN EDUCATION SERVICE 9. Encik Harun bin A Ghani asked the Minister for Education how many second language teachers were promoted to Senior Education Officers I and II in the last promotion exercise and how many of them were promoted to Principal and Vice-Principal in primary and secondary schools.”
“Mr Speaker, Sir, I do not believe there is a specific reason or a clear case to make out for us to have such a questionnaire or to require such information to be obtained from people who have changed jobs because it will be extremely difficult to ascertain in each and every case whether the reason given by the respondent is in fact the precise reason for the person wanting to change job. Dr Kanwaljit Soin: Sir, while I agree with the Minister, we must remember that for our higher valued-added skills training, the learning curve becomes longer. And if people tend not to stay in the same job, then our competitiveness will be affected. Therefore, would the Minister consider thinking about this issue and come out with some sort of plan?”
“Mr Speaker, Sir, from CPF records, in 1993, 5.5% (or about 60,400) of the 1.1 million active CPF members who were employees changed jobs more than once during the year. However, as we do not have information on why they changed jobs, we cannot tell what percentage of this 5.5% are job-hoppers. Many could have changed jobs for valid reasons, such as to take up more skilled and higher value-added jobs. These are not job-hoppers. Only those who frequently change jobs for frivolous reasons can be considered as job-hoppers.”
“On the other hand, any reduction in CPF contribution rates for part-time workers will affect some 47,000 part-time workers who are currently making full CPF contributions. Part-time workers also need to save for retirement and Medisave as much as full-time workers. The CPF scheme, as it is presently structured, helps them to do so. To lower CPF rate for part-time workers will create anomalies. A person working part-time but earning more may end up paying less CPF than another person working full-time but earning less. Finally, reducing the CPF contribution rate, even if it is the employee's contribution rate, may lead some employers to take into account the lower CPF contribution rate, hence, higher take-home pay, and therefore offering a lower basic wage to the part-time worker. The part-time worker may still not end up with a higher take-home pay.”
“Mr Speaker, Sir, success in attracting the economically inactive females to join the part-time workforce depends on many factors. These include the benefits offered by the employers and the scheduling of part-time work for the convenience of housewives. My Ministry will ensure that our labour laws do not stifle the employment of part-time workers. In August 1990, the Ministry introduced a set of guidelines to help facilitate part-time employment. The Guidelines on Part-Time Employment were drawn up based on tripartite consultation and consensus. Under the Guidelines, statutory benefits are pro-rated based on the part-timer's contractual working hours in a year vis-a-vis that of a full-timer. Employers are also given the flexibility to encash certain benefits such as annual leave and public holiday entitlement for the part-time workers. The Ministry is conducting a review to formalise these guidelines into Employment Regulations so that the rights and obligations of the employers and part-timers are more clearly spelt out. With the Regulations in place to facilitate part-time employment, employers should come up with innovative schemes to meet the convenience of housewives so that more would come forward to work part-time. This would also help to alleviate our manpower shortage and reduce our reliance on foreign workers. On the Member's question of reducing the CPF contribution rate for part-time workers, my Ministry is not in favour of this. This is because CPF contribution is not the sole factor influencing the attractiveness of part-time employment. Reducing CPF contribution may not result in a larger number of people engaging in part-time work.”
“This could be due to the fact that they could easily do so through their friends, relatives, neighbours and other sources. On the other hand, employers also have little difficulty in reaching them with home-based work, if such work is available. Since the Work Permit and Employment Department is able to provide assistance for job seekers, including those looking for part-time and home-based works, we are of the view that there is no necessity to set up a special Section in the Ministry for the same purpose. OLD AGE HOMES IN HOUSING AND DEVELOPMENT BOARD ESTATES 13. Dr Kanwaljit Soin asked the Acting Minister for National Development, for all new Housing and Development Board estates and some old ones which are undergoing major renovations, if he will consider reserving the lowest floor for old-age homes.”
“The Nominated Member of Parliament asked a similar question last year. As we have explained then, home-based work is of two categories. In Singapore, most home-based work do not involve employer-employee relationship. The usual arrangement is for a company to enter into a contract for service (as against a contract of service) with an individual party to perform a task or to undertake work at his home, using his own tools and at his own pace without any supervision. Unlike an employee of a company, he will not be paid a salary but a remuneration based on the work done for the company. An example of this type of home-based work is a housewife sewing and completing dresses for garment factories for a remuneration on a piece-rate basis. Another category of home-based work is those which involve employer-employee relationship under an employment contract. Under their contracts, the employees concerned could operate from both the office and their homes as long as they could deliver what is expected of them. With advanced technology in telecommunications such as computers and fax machines, more people are now able to operate from their homes. Since there is employer-employee relationship, our labour laws would apply to them. Examples of this category of home-based work are journalists, insurance or property agents who are given the flexibility to operate both from the office and their homes. At present, our Ministry's Work Permit and Employment Department provides assistance free of charge to job seekers who wish to look for employment, either on a full-time or part-time basis. Housewives who wish to seek home-based work and other flexi-work arrangements could also approach the Department for advice and assistance, although the need for such service appears to be minimal.”
“Presently, there are more than 200,000 foreign workers in Singapore. This makes up about 12% of our current workforce of 1.6 million. The Government's foreign worker policy is to allow a limited pool of foreign workers to work in Singapore, to complement as well as act as a buffer for the local workforce. While we may not be able to completely phase out foreign workers in view of the slower indigenous workforce growth and the rapidly ageing population, our long-term objective is to reduce our dependence on foreign workers. This is achieved through adjusting the dual mechanisms of the foreign worker levy and the dependency ratio. The dependency ratio limits the number of foreign workers each employer is allowed to employ, depending on the number of local workers they already have. The foreign worker levy serves to dampen the employer's demand for foreign worker by narrowing the wage gap between foreign and Singaporean workers. This reduces the employer's reliance on foreign workers and encourages him to turn to automation and the introduction of labour saving techniques through the wider application of technology in the production process. HOME-BASED PAID WORK 12. Dr Kanwaljit Soin asked the Minister for Labour if he will consider setting up a section in his Ministry that will regulate, monitor and expand home-based paid work for women who are home bound as they have to look after their children or the aged but need to earn an income.”
“My Ministry has been stepping up its enforcement action. In 1993, officers of the Department of Industrial Safety made a total of about 8,870 inspections of factories. This is an increase of about 11% as compared to 7,950 inspections made in 1992. In 1993, the DIS prosecuted and fined 504 factory occupiers for violating the law as against 437 the year before. Sir, therefore, there is no slackening of surveillance and enforcement and, on the contrary, we are more vigilant and more proactive in our actions against disregard for workers' safety. Sir, my Ministry's Department of Industrial Safety will continue to concentrate its efforts on the prevention of fatal accidents and other accidents in shipyards and construction sites. For the shipyards, the Department of Industrial Safety will conduct a thorough review of the safety performance of all shipyards. Enforcement action will be stepped up. In addition to carrying out the regular inspections, our inspectors will be conducting special enforcement exercises on shipyards with bad safety records. These enforcement exercises will be focused on the specially dangerous areas and hazardous work such as hot-work. Our inspectors will check for strict compliance with safety measures, especially the hot-work permit system. If the shipyard fails to comply, it will be ordered to stop work until they have rectified the safety management system. As for the construction industry, the DIS will focus its attention on the prevention of fatal accidents arising from workers falling from a height and workers being hit by falling objects. This is because these two categories of fatal accidents account for more than 50% of all fatal accidents in construction worksites.”
“In addition, during regular inspections of factories, the Department of Industrial Safety officers discuss the work of the Safety Committee with the Committee's Chairman and Secretary and, where necessary, DIS officers participate in Safety Committee meetings to provide on-the-spot guidance and advice. Sir, I agree with Mr Othman that Safety Committees can make important contribution to industrial safety and can help to ensure that workers comply with safety requirements. My Ministry's Occupational Safety and Health Training and Promotion Centre provides training for Safety Committee members to cover this and other aspects of the work of Safety Committees. Last year, a total of 256 Safety Committee members were trained by the training centre. Sir, we will continue to train, support and supervise the Safety Committees in large factories in order to improve the industrial safety for all workers. Mr Zulkifli expressed concern over the trend of industrial accidents. He said that industrial accidents have been on an upward trend. I do not think that is an accurate reflection of the position because the total number of accidents reported to the Department of Industrial Safety fell by 9% from 4,698 in 1992 to 4,257 last year. In terms of frequency rate, it fell from 3.6 accidents per million man-hours worked in 1992 to 3.2 per million man-hours worked last year, that is, a drop of about 11%. Hence, the overall incidence of industrial accidents is not on an upward trend. However, there has been a rise in the number of fatal accidents, particularly in the shipbuilding and shiprepairing industry and the construction industry. In 1993, there were 66 fatal accidents in the two industries as compared to 55 in 1992. This is a matter of serious concern.”
“Sir, Mr Othman, Chairman of the GPC for Labour, asked for an explanation on the workings of Safety Committees in factories. Sir, factories employing 50 or more workers are required by the Factories Act to form Safety Committees for the purpose of promoting safety and health at the workplace. The role and functions of the Safety Committees are prescribed in the Factories (Safety Committee) Regulations. Among other things, Safety Committees are required to conduct factory inspections, investigate accidents, report on unsafe conditions discovered during such inspections and investigations and also to recommend measures to rectify them. Safety Committees are required to meet once a month to discuss these and other safety and health matters. Proceedings at the meeting must be properly documented in the minutes of the meeting. Safety Committees are required to submit the minutes of meetings to the Department of Industrial Safety (DIS). Officers of the Department will gauge the effectiveness of Safety Committees by first checking the minutes of meetings of Safety Committees. They check on whether the Committee has been carrying out the functions and activities, as required by law, and whether there is quick follow-up action on safety and occupational health problems identified by the Committee. Where a Safety Committee is found to be ineffective, the Department of Industrial Safety will give written instructions to improve the working of a Safety Committee. Let me give you an example. In the last two months, 17 such instructions were given to factory occupiers.”
“Sir, in responding to Dr Ow, I said that we have decided to include all the new investment instruments under the Enhanced Investment Scheme rather than the Basic Investment Scheme. But in the light of experience, we will be reviewing whether some of the instruments in the Enhanced Investment Scheme can also be allowed for those in the Basic Investment Scheme.”
“And if, in fact, he feels that the bank's interest rate is not sufficiently attractive, or the CPF interest rate is also not sufficiently attractive, then he is, of course, free to invest his CPF savings through any of the other mechanisms that are available in the investment scheme. He need not go into the stock market. He can always buy government bonds or insurance policy, which is also allowed. So there are many other opportunities available to the CPF members to optimise the returns on their CPF savings, if they feel that the Board's interest rate is not sufficiently attractive.”
“This will take effect from 1st July next year. The Minister for Finance has also explained that this 1.25% premium for the really long-term savings held in the CPF account is comparable to what other long-term investments on the market would yield, on average, ie, above the savings deposit rate. Sir, the funds obtained by the Government from the sale of bonds to CPF Board are mainly invested overseas. The objectives of the investment are to ensure capital preservation because we have to guarantee the capital plus a minimum rate of interest and also to ensure a reasonable rate of return to meet the interest payment for the CPF members. In this way, the Government underwrites the risk of the investment and shields CPF members from any risk of losing their old age savings. The Member brought up this appeal for higher interest rate for CPF members who do not want to risk their savings in the stock market. What is the alternative, if they do not want to make investments in the stock market, apart from, of course, using their CPF savings for owning a house or a HDB flat? If you leave it in the bank as a bank deposit or long-term fixed term deposit, the CPF formula for working out the interest for the Ordinary and Medisave Accounts has already taken into consideration the local bank's interest rate for this term deposit. As I said earlier on, it is an average of the interest rates of savings deposit and the one-year term deposit. So it makes very little difference to a member to leave it with CPF or to leave it with a bank.”
“Sir, the CPF Board is the guardian of Singaporeans' old age savings. It has therefore adopted a conservative and prudent investment policy. The Board invests CPF members' savings in Government bonds which are risk free. In return, the Government pays interest on the bond at a rate that is pegged to the average of the savings and the 12 months' fixed deposit rate of the big four local banks. In addition, the Government guarantees CPF members a minimum interest rate of 2.5% per annum, even if the market rate should fall below this level. In fact, the CPF Board is currently paying the rate of 2.5% as guaranteed by Government, although the bank's interest rate is below this level. 3.00 pm Sir, the CPF interest rate is a reasonable rate of return for savings in the CPF Ordinary and Medisave accounts as these savings are not really long-term funds. Mr Chng said that CPF savings are long-term funds and therefore the interest should be pegged to the bank's three-year fixed deposit rate. But the bulk of CPF members' savings in the Ordinary and Medisave Accounts are not long-term funds really. This is because they are withdrawable on demand to meet the members' housing, investment and other needs, such as medical expenses. Only savings in the Special and Retirement Accounts are long-term funds as they cannot be withdrawn for any other purposes except for old age. For savings in these two accounts, the Minister for Finance has already announced that Government will pay higher interest rate at 1.25% above the prevailing CPF interest rate, that is, 1.25 percentage points above the prevailing CPF interest rate; in other words, 50% more interest on the savings in the Special Account compared to the savings in the Ordinary or Medisave Accounts.”
“Sir, I will of course consider the points raised by Dr Tan. But if the question is raised again, maybe I will give a better answer, but it need not necessarily be the answer that he is hoping for. In regard to Mr Chiam's question, what I said in my Statement on 11th March was this, and I quote: 'About 72% of active CPF members (citizens) who reach the age of 55 in 1995 (in other words, they are at an age when they can withdraw from their CPF) will have Special and Ordinary Accounts savings (including amounts withdrawn for housing) [that means they have bought a HDB flat or some other housing] which exceed the Minimum Sum requirement of $40,000.' The details are contained in Table 6 which was distributed on 11th March.”
“All that the Ministry needs to do is just give the same amount of tuition fees that a local student has to pay for his science course, for example, to a student doing the same course overseas. Finally, there is the question of fairness here. We should be fair to tertiary students studying overseas and also to those studying here. Both should benefit from the scheme and I think we should not penalise those overseas students.”
“The number of such foreign workers in each company is, however, limited to 100 or 10% of a company's total workforce in Singapore, whichever is lower. This is to ensure that proper training is provided and the local operation is not disrupted by the presence of excessive foreign trainees. Sir, from March 1993 to January 1994, the EDB supported applications from 41 companies to bring in 1,165 foreign workers under the regionalisation training scheme. It also offers grants amounting to $714,950 to 26 companies to offset the foreign workers' levy. As of February 1994, my Ministry received 691 work permit applications from 32 companies under the scheme. My Ministry approved 667 or 96.5% of the work permit applications. Sir, the 10% limit is adequate since only 3.5% of the work permit applications were rejected. It is also a one-time requirement. Companies which need to train larger numbers of foreign workers in Singapore can bring in their foreign workers in batches so long as the number in each batch does not exceed 100 or 10% of the limit. Dr Tan Cheng Bock: Sir, I would just like to say something. I think all the concerns expressed by the Minister concerning the use of CPF for overseas education have been anticipated by me and I raised them in my speech. I would therefore ask the Minister to give more thought to what I said and perhaps give a better reply the next time. He mentioned risk. I have already put forward all the arguments about risk. I do not want to go through it. He mentioned about the difficulty of listing of universities. But we have set a precedent. We have listed universities for medicine and law. He talked about costs. Yes, I understand the high cost. That is why I only asked for tuition fees. I have even set out the formula for him.”
“We will be watching this situation closely to ensure that demand for foreign workers does not run against our long term objective. In the meantime, my Ministry is not proposing to revise any of our foreign worker policy. In considering new investments and expansion, employers should not base their decision on an unlimited supply of low wage foreign labour to meet their immediate needs. Rather, they should think longer term and invest in automation and other labour saving technologies to make their production processes more efficient and optimise their use of Singapore's scarce manpower resource. Workers should also be trained to upgrade their skills. This will help us to be more productive and competitive in the longer term. Sir, Mr Chua also asked whether the Ministry is prepared to waive the foreign workers' levy for companies which bring in workers from their overseas investments for training in Singapore and whether we can waive the 10% ceiling that is allowed presently. Sir, the Government introduced a regionalisation training scheme on 1st March 1993 to facilitate Singapore-based companies which have investments overseas. The scheme has made it easier for Singapore-based companies to train their foreign workers in Singapore and subsequently send them back to their home country to support the Singapore company's overseas investment. Under the scheme, companies can bring in foreign workers for a training period of up to six months at any one time. They can also apply to the Economic Development Board for a grant to offset the foreign workers' levy for a maximum period of six months. In addition, foreign workers under the scheme are excluded when my Ministry computes the foreign worker dependency level of the company.”
“Sir, earlier on, I inadvertently forgot to answer a question raised by Mr Robert Chua, who is not in the Chamber. He raised this yesterday. Sir, with your indulgence, Mr Robert Chua asked whether my Ministry has any plans to review the foreign worker policy and, if so, can the Ministry inform the private sector in advance. My Ministry is constantly monitoring the situation, that is the labour market, through industry visits and reviewing the policy on foreign workers to ensure that it remains relevant to the economy. From time to time, we adjust the guidelines in response to changes in demand from the various sectors. For example, in November 1992, we increased the dependency ratio for the construction industry from 1:3 to 1:5. This was to enable the construction industry to cope with exceptional growth in the short term. The marine sector's dependency ratio is 1:2. It is still sufficient for the industry's need despite positive feedback that 1994 will see an upturn in this sector. In the case of the manufacturing sector, it has done well last year, although some jobs were lost. The manufacturing output increased by 9.8% for the year. In fact, this sector achieved double digit productivity growth for 1993 - 12.9%. This trend is entirely in keeping with our long term strategy of going for higher value-added investment, enhancing productivity and reducing our dependency on foreign workers. We have also observed that the manufacturing sector experienced employment growth in November and December 1993, after 19 consecutive months of decline since April 1992. At the moment, 91% of all the manufacturing firms are still within the 45% dependency level for the upper tier levy. At the lower tier levy, 80% of all manufacturing companies are below the 35% dependency level.”
“If CPF savings are allowed, we will have in some way, even if it is wrongly assumed, accepted some of the responsibility of ensuring that precious CPF savings are not frittered away on courses of studies which are of dubious quality. This cannot be objectively achieved and may end up causing greater dissatisfaction among CPF members. 2.30 pm Sir, to meet the rising expectations of Singaporeans to have a tertiary education, the solution is not in opening up the CPF to greater use for overseas education. The solution is to expand our own tertiary institutions where there is a clear-cut demand, where there is a national interest to provide for such additional places at our institutions of tertiary education.”
“Hence, I believe that it would be better if parents intending to send their children overseas for study should sit down and work out their own finances carefully. Because the CPF Education Loan scheme, even if it is available to them, will only meet a small fraction of the total expenditure. Therefore, they should sit down and work out their own financial capability carefully. Allowing them to use their CPF saving just for a small part of the tuition fees may entice some parents to embark on ventures which they are unable to see through to completion because of the unexpected turn of events. Also, allowing the use of CPF savings for overseas education may lead to greater pressure being brought to bear on parents to send their children overseas. This may turn out to be unwise since there is always the possibility of the inability to complete the studies leading to difficulties in repaying the loans taken from CPF. Here, I want to remind Members that the CPF Education Loan scheme is a loan. The loan must be repaid in cash on completion of the study, not from future CPF contribution, but in cash. So if the loan cannot be repaid for whatever reasons, this would have serious consequences for the parent's retirement savings. And in view of our recent revision to the Minimum Sum scheme, this is particularly relevant. Sir, finally, not all foreign universities are of equal quality. We are not in a position to monitor the quality of all foreign institutions which Singaporeans may wish to send their children to. As of now, parents already do send their children to institutions for courses of study of varying quality and economic value. They do so with a clear understanding that it is their own decision and at their own risk.”
“Only those with very large CPF balances may find it worthwhile to invest in Government bonds and fixed deposits in this manner. But we will review the position later in the light of experience. I now come to Dr Tan Cheng Bock's long and passionate appeal for the use of CPF savings for overseas education. Sir, we have allowed the use of CPF savings to meet tertiary education fees in Singapore. This is because tertiary education in Singapore is heavily subsidised and the fees paid by students are relatively low. On the other hand, overseas tertiary education is very costly. As foreign students, Singaporeans will be charged higher fees, full fees in some instances. Tuition fees alone can be as high as $30,000 per academic year for medical students compared to $12,000-odd for medical students at NUS. Even for a non-laboratory-based course, the tuition fees can amount to $10,000 per academic year compared to less than $4,000 at NUS. Apart from tuition fees, students also have to bear substantial living expenses. These can range anywhere from $7,000 to $14,000 a year. This means that an overseas education can cost anywhere between $50,000 to $150,000. I note that Dr Tan has recognised that even if we extend the CPF Education Loan scheme for overseas education, members should be able to borrow only a small proportion of the total expenses from their CPF savings. This is because, as Dr Tan himself has pointed out, the Education Loan scheme is based on fees charged by our tertiary institutions. So in any case, the CPF member will still have to use his own cash savings to meet the bulk of the expenses. And I am very pleased that the hon. Member is not suggesting that we allow CPF savings for the living expenses of overseas students.”
“Dr Ow also asked about the differences in the Basic Investment Scheme and the Enhanced Investment Scheme, and why different instruments are placed in Basic Investment Scheme and others are placed only in Enhanced Investment Scheme. Let me explain. The investment instruments under the Basic Investment Scheme and the Enhanced Investment Scheme were classified using the following criteria. What we did when we liberalised the CPF Investment Scheme was to take all the investment instruments allowed under the previous CPF Approved Investment Scheme into the Basic Investment Scheme. In other words, the Basic Investment Scheme was the reincarnation of the Approved Investment Scheme. So there is no change except that we allow non-trustee shares to be included under the Basic Investment subject to a 10% limit, as in the case of gold. For all the other new investment instruments, we put them into the Enhanced Investment Scheme. I agree with Dr Ow that fixed deposits and Government bonds are relatively safe instruments. However, they are new instruments to be used for CPF savings and the CPF Board has deliberately chosen to be cautious by including them under the Enhanced Investment Scheme. We have also to take into account that by including these fixed deposits and Government bonds in the Basic Investment Scheme, we may be encouraging the shuttling of small amounts of savings between the CPF Board and the banks under the Basic Investment Scheme. This would not be productive because the CPF interest rate is already pegged to the average of saving account rates and one-year term deposit rates of the big four local banks. So any such shuttling of small amounts of funds between the CPF accounts and the bank would not be productive.”
“The reason is, as I have stated in the statement which I made on 11th March, that we want to ensure that all Singaporean employees make adequate preparation for their retirement since the lifespan is getting longer in Singapore and people are going to be in retirement for a longer period. It is only wise and prudent that, at this point in time, we should put in place some mechanism to ensure that, in the future, aged Singaporeans will be able to look after their own interest and needs so that they will not become dependent on public assistance for their survival. He said that $34,600 is already adequate. But $34,600 which is the current Minimum Sum requirement is only barely sufficient to meet the subsistence level of living. I do not think that is adequate for most Singaporeans. With this revision of raising the Minimum Sum slowly over a 10-year period to $80,000, CPF members would be able to look forward to a retirement saving, a Retirement Account, that can afford them a slightly better than subsistence level of living. And I think that is what most people would expect rather than just living at a subsistence level after they retire. As to whether it is to delay payment, or withhold CPF, of course, Members know that it is not true. I have just explained that, in fact, a CPF member is fully entitled to take out the Minimum Sum amount at the age of 55. All he is required to do is to leave it with an approved bank or buy an annuity from an approved insurance company. If he thinks that these two avenues give him a better return for his Minimum Sum, by all means do so and the CPF Board actively encourages CPF members to do so.”
“And we have come to the conclusion that, with the revision of the Minimum Sum Scheme, we do not need to take the more drastic step of raising the CPF withdrawal age. Mr Koo Tsai Kee asked how much exactly can a CPF member withdraw from his Retirement Account, especially if he does not set aside sufficient CPF savings to meet the Minimum Sum target. The amount that a CPF member can withdraw monthly, under the revised Minimum Sum Scheme, will, as I said earlier on, be based on the amount that they actually set aside. However, this monthly withdrawal amount will not be lower than the subsistence level which is provided for at present. Sir, assuming that the low inflation continues, CPF members who set aside the full Minimum Sum of $80,000 at the age of 55 by the year 2003 will be able to withdraw a monthly amount of about $450. However, if the member only manages to set aside $60,000, then he will be able to withdraw a monthly amount, which is 75% of $450, in other words, about $340 a month. So it is in proportion to the amount that he has set aside. For those who have set aside less than half the Minimum Sum required, they will be assured of withdrawing a monthly amount that is equal to the subsistence level, that is, $230 at the present moment. But this $230 will be adjusted for inflation in the future. Mr Zulkifli also supported the revision to the Minimum Sum Scheme and sought assurance that the CPF members will be allowed to withdraw part of their savings at the age of 55. I have already given the assurance. They will continue to withdraw at least half of their cash savings at the age of 55. Mr Chiam has asked what are the reasons for revising the Minimum Sum. Is it to withhold the CPF, to delay payment, or is it to prevent inflation? What are the reasons?”
“I have already stated in the statement on 11th March that, in fact, we have increased the Minimum Sum progressively over a 10-year period and this will create minimal disruption to all Singaporean CPF members, including the low income group. Our projection, in fact, shows that most CPF members in the low-income group should be able to meet the Minimum Sum requirement. And as I said on 11th March, about 72% of active CPF members who are citizens and who are reaching the age of 55 next year, when we make the first adjustment to the Minimum Sum Scheme, will have total CPF savings which exceed the Minimum Sum requirement of $40,000. And about 90% of the active CPF members will have more than double the $4,000 cash requirement under the Minimum Sum Scheme by next year after we implement the first adjustment to the Minimum Sum Scheme. So, in fact, nearly all Singaporeans will be adequately provided for even after the Minimum Sum Scheme has been revised. He also sought reassurance that older members would be able to withdraw some of their CPF savings. I have stated this before that the revision of the Minimum Sum Scheme will still enable CPF members to withdraw at least half of their cash savings at the age of 55 so that those who are planning to make use of part of their CPF savings when they reach the age of 55 can continue to do so. Dr Ow also sought reassurance that the Government will not make further adjustment to the CPF withdrawal age. Let me reassure Dr Ow and Members of this House that the Government has already considered the various options available to make provision for a longer retirement period for most Singaporeans.”
“As I have said in my statement, we have assumed that the present trend of controlling inflation, of keeping inflation low in Singapore, will remain for the next 10 years. So we have worked on the assumption that inflation will be kept at about the 3% level for the next 10 years. He has also asked whether we could raise the interest rate on the CPF savings. The Minister for Finance has already announced that the interest rate for the Special Account will be raised. He has also raised another point on whether the Minimum Sum can be used for paying insurance premium by a CPF member. The answer is yes. In fact, at the age of 55, when the CPF member withdraws his CPF savings, and I want to reiterate this point -I have made this point several times already - that, in fact, the CPF member can withdraw every cent in his Ordinary and Special Accounts at the age of 55. He can withdraw everything, including his Minimum Sum. All he needs to do is to take the Minimum Sum component and leave it with an approved bank which will pay him a monthly amount from the age of 60 equal to or better than what the Minimum Sum will pay him. That is all we require of him. He can also withdraw every cent in his Minimum Sum and use it to buy an annuity from an insurance company. He can buy a life annuity or other forms of annuity, so long as it provides the CPF member with a monthly payment which is equal to or better than what the Minimum Sum Scheme will enable him to receive. So there is no prohibition against them using the Minimum Sum to buy such annuities. 2.15 pm Dr Ow also expressed the concern that some of the low-income wage earners may be concerned that they are unable to accumulate sufficient CPF savings to meet the Minimum Sum requirement.”
“I will ask the Ministry of Finance to consider whether such cash top-up for spouses should be granted tax-exempt status. My Ministry will separately study the implication of allowing a CPF member, a taxpayer, to top-up his or her spouse's CPF Minimum Sum account, using his own CPF savings. We will consider the implication and at a later stage we will report to the Member. Mr Loh Meng See asked whether in implementing the revised Minimum Sum scheme it will have an impact on members' use of their CPF savings and how will the total 40% CPF savings be distributed to a CPF member's account. Let me assure him that the distribution of the 40% CPF will not be changed as a result of the revision to the CPF Minimum Sum Scheme. The Ordinary Account will continue to receive 30 percentage points of the total 40%, the Special Account will receive 4 percentage points, and the last 6 percentage points will go towards the CPF member's Medisave account. So the CPF member will continue to have full access to his savings in the Ordinary Account to meet his home ownership requirement. As I have just explained a moment ago, children are already allowed to top-up their parents' CPF Minimum Sum using either the children's own CPF savings or tax-exempt cash contribution. In the case where the children want to use their CPF savings to top-up their parents' Minimum Sum account, they should have at least twice the prevailing Minimum Sum. That is the current requirement. Dr Ow raised a number of questions on the public perception of the recent changes to the Minimum Sum Scheme. He also asked what is the inflation rate that we have used in calculating or projecting the Minimum Sum requirement for aged Singaporeans in 10 years' time.”
“For example, if the prevailing retirement age in 1995, after 1st July 1995 when we implement the change, is 61, when a member sets aside the Minimum Sum at the age of 55, he will be allowed to make monthly withdrawal from his Retirement Account at the age of 61 in the year 2001. Sir, the Minimum Sum Scheme allows members to withdraw at least half of his CPF savings at the age of 55. Since the member can continue working, he will not need to use this lump sum withdrawn at the age of 55 for his living expenses. If he should stop work four or five years before the statutory retirement age, his lump sum withdrawal made at the age of 55 can be used to breach the gap until he can actually start making monthly withdrawals from his Retirement Account. At present, a CPF member below the age of 55 may apply to withdraw his CPF savings if he is physically or mentally incapacitated and is unable to ever work again. We will consider allowing members to begin withdrawing from their Minimum Sum earlier than the statutory retirement age if they are placed in similar unfortunate circumstances of being incapable of working to the prevailing retirement age. Sir, Mr Chng had also suggested yesterday that the CPF members should be allowed to contribute or top-up their spouses' Minimum Sum. This suggestion is an extension of an existing provision in the Minimum Sum Scheme. We already do allow children to top-up their parents' Minimum Sum amount in their parents' CPF accounts. If Mr Chng's suggestion is to allow spouses to use cash top-up, then there should be no problem. Whether such cash top-up would be tax-exempt is an issue which I will take up with the Ministry of Finance.”
“Because of the high degree of inter-dependency between the various schemes operated under the CPF, it will pose problem if the Minimum Sum Scheme is managed separately from the rest of the CPF funds. Furthermore, many of the schemes share a common database. In today's information technology age, we depend a lot on databases to manage and to provide timely response and to provide a good service to CPF members. If we pull out a section of the CPF's responsibility and put it in another separate organisation, it could result in duplication and wastage of scarce manpower. My Ministry is not in favour of setting up another organisation to just look after the Minimum Sum or the Retirement Accounts of Singapore workers. Nevertheless, we will ensure that CPF Board continues to provide a high level of service to CPF members, despite the increasing complexity of the Central Provident Fund system. Also, CPF Board will continue to work with other Ministries in order to improve its service quality and in order to improve its services to the members. Mr Chng Hee Kok asked what will happen to some of the older employees who are unable to work up to the statutory requirement age. There will be a gap before they can withdraw from their Retirement Account, in other words, make monthly withdrawal from their Minimum Sum. At present, a member, who sets aside his Minimum Sum at the age of 55, can start withdrawing it at the age of 60. This is the present arrangement. I would like to reiterate that with the raising of the Minimum Sum, the withdrawal age of the Minimum Sum for monthly payment will be pegged to the prevailing retirement age when the member sets aside his Minimum Sum at the age of 55.”
“Sir, with your permission, I will address the points that were made on the CPF Minimum Sum Scheme first and then later on, the Minister of State, Mr Goh Chee Wee, will address some of the other points. First, I would like to thank all the Members who have spoken up and supported the revision of the Minimum Sum scheme which was announced on 11th March. Many Members have raised questions on details, on how the revision will affect various groups of people, and how it will be implemented. I will try to address all the points that were raised by hon. Members. Let me start off by answering Mr Othman, Chairman of the GPC for Labour, who, apart from expressing his strong support for the Minimum Sum Scheme revision, asks whether my Ministry would consider setting up a separate body, a separate statutory board, to manage the savings of CPF members that have been transferred to their Minimum Sum or Retirement Accounts. His argument is that if you have a separate body, then it can focus on looking after the needs of the elderly or the aged. My response is that CPF Board is the statutory board charged with the responsibility of implementing schemes to help Singaporeans save for their old age. The various CPF schemes are all inter-connected or inter-related. So changing the operating condition or criteria of one scheme, whether it is the Minimum Sum Scheme or the investment schemes, usually results in making parallel changes in other schemes too. For instance, when we make changes to the Minimum Sum Scheme, we will also have to make changes to the investment schemes because the qualification and the criteria will change. Likewise, we also have to make adjustment to the CPF education loan scheme.”
“Sir, I beg to report that the Committee of Supply has made further progress on the Estimates for the financial year 1994/1995, and ask leave to sit again tomorrow.”
“He also asked whether children can top up their parents' Minimum Sum amount. The answer is yes. They can do so in cash and they will receive tax exemption for that. It is already in existence. The present rules permit the CPF members to make cash contributions to their parents' Minimum Sum accounts. I am afraid I did not quite get Mr Choo Wee Khiang's point on the self-employed. But I think the self-employed are being included in the CPF and we have already started doing so by asking them to contribute to Medisave. We will have to work with Medisave for a start and get more and more self-employed to contribute. Mr Chiam asked about joint account for a married couple. What happens when they are divorced? What happens to the Minimum Sum Scheme? I have already said, in my statement, that to obtain the concession of setting aside 1(r) times of the Minimum Sum for a married couple, they have to irrevocably nominate the spouse as the beneficiary. But if, for whatever reason, there is a divorce, then of course the settlement will have to depend on the court. How they decide on the assets to be distributed, that will be dependent on the court's decision.”
“This is because the yearly increase of $5,000 will include inflationary increases. However, after the year 2003, we will make annual adjustment to the Minimum Sum amount to take into account inflation. Sir, Dr Soin has asked whether we will consider raising the CPF contribution rate for those who are aged 55 to 60. The reason for lowering the CPF contribution rate for those who are aged 55 to 60 was to ensure that people in that age group will be able to remain gainfully employed. Employers are of course concerned with the high cost of wages. And in Singapore, in the context of our time-based wage scale, the older workers invariably will cost employers more. When we raise the retirement age from 55 to 60, we have decided that it is necessary to provide an incentive to employers so that they will not try to release or find some ways of retiring their older workers. So we have granted them a 5% reduction in the CPF contribution for older workers. I do not think we should go back, or turn the clock back, so to speak. We will remain with this level of CPF contribution for those who are aged 55 to 60. Sir, in the case of a wife who is not a CPF member, then of course the question of the Minimum Sum for the wife does not arise at all. The Minimum Sum Scheme works only for CPF members, as I explained earlier on. She also asked when will the retirement age be raised to 67 years. We have already said that we will do so over a period of 10 years. We have just raised the retirement age to 60 years last year. We do not intend to make any adjustment this year but we will be reviewing, and we will be increasing it gradually. I think I have addressed Dr John Chen's point about giving the lower income group some extra assistance.”
“The Member has also asked whether we could consider extending MediShield. I think this would be studied by the Ministry of Health. And on the possibility of using the Minimum Sum monthly payments to pay the MediShield premiums, this is something worth studying. I will now deal with the points raised by the other Members. Mr Low has asked what is the basis for the Government's calculation of setting the Minimum Sum at $80,000 in 10 years' time. The original Minimum Sum of $30,000 was introduced in 1986 and was meant just to provide support for CPF members at the subsistence level. The original $30,000 would be able to provide members with $230 a month from the age of 60 years over a 20-year period. This monthly payment of $230 was estimated by the Ministry based on a study conducted by the Singapore Council of Social Services on what a person living alone would need for subsistence. Sir, the intention now is to have CPF members set aside enough savings to maintain a modest standard of living, slightly higher than the subsistence level. As a benchmark, we have used the average monthly expenditure of a person living in a 2-person household in the lower 50th percentile of total households, in other words, the lower half of the income groups in Singapore. We want to reach this standard in 10 years' time. This works out to about $450 a month in the year 2003. The Minimum Sum amount that is required to support this monthly payment of $450 a month from the age of 60 years, for a 20-year period, is $80,000. It should be noted that the targeted Minimum Sum is still less than double the present Minimum Sum of $34,600. Sir, there will be no separate adjustment for inflation between 1995 and 2003 when the Minimum Sum is being raised by $5,000 a year.”
“Yes, may I beg your indulgence, Mr Speaker? This is a very important matter and Members have raised many queries.”
“The Minister for Finance has already assured Dr John Chen that since it is a new idea, it needs to be studied and it will be studied carefully to see whether we should do such a top-up directly for the purpose of helping the low income group to meet their Minimum Sum requirement. Mr Othman Haron Eusofe has also asked whether the Government would consider working together with the banks to improve the returns that are available under the Minimum Sum Scheme. We have already taken the first step in that direction. As the Minister for Finance had announced during his Budget Statement, to give better returns to CPF members who have opted to leave their Minimum Sum amount with the CPF Board, the Government will, from 1st July 1995, pay a higher interest to the savings in the Special Account and the Retirement Account of CPF members. We have also decided to pay this higher interest rate for savings in the Special Account because it would help the lower income group and the younger workers to accumulate more savings by the time they reach the age of 55 and be in a better position to meet the Minimum Sum requirement. Apart from leaving the Minimum Sum amount with the CPF Board, the member can always deposit the Minimum Sum in an approved bank, or use the Minimum Sum to purchase an annuity which will give him a steady monthly income which is equal to or better than that which the CPF Board can give to him. We are actively encouraging CPF members to purchase such annuity. And on the point about receiving payment on a lifetime basis, this is one solution for more CPF members to use their CPF saving at age 55 to buy an annuity which would give them a lifetime monthly payment.”
“We will have to study whether life expectancy in fact is going up progressively as we are raising retirement age, perhaps not on the same scale but, nevertheless, still going up, and a significant number of people, because of good health and a very healthy lifestyle, may well live longer than the current average lifespan. Mr Othman Haron Eusofe has also asked whether we could make special concession to help members, particularly those who are in the lower income group and do not have much CPF savings. I think the same point was made by Dr John Chen. The point is taken that for the lower income group, they need some extra assistance to meet their Minimum Sum requirement and, in a sense, last year's implementation of the CPF Share Ownership Top-up Scheme was a very good start. It was a timely introduction of a concept to help the low income Singaporeans. The Share Ownership Top-up Scheme will certainly help CPF members to build up their Minimum Sum amount. The cash grant of $200 was credited to every citizen CPF member last year. And next year, the cash grant to be given to CPF members who are citizens will be $300. This will certainly help them to build up the savings in their CPF accounts and to meet their Minimum Sum requirement. In fact, the members who have bought Telecom shares under the Share Ownership Top-up Scheme will also have enhanced their asset in the CPF because they would have enjoyed capital gains. Government's policy is to continue with such share ownership top-up scheme. Dr John Chen has suggested during the Budget debate, and he repeated earlier today, whether we can have a direct top-up for the purpose of helping the low income group to meet their Minimum Sum requirement. This idea is new.”
“And we have therefore taken this approach because the amount that has been set aside at age 55 and the interest earned will be used to commence the payment once the person reaches the age of 60, based on today's retirement age. We have calculated that the monthly payment should go on for a period of 20 years. So we are unable to provide payment to the CPF member for life because the Minimum Sum Scheme, as we operate it, does not have the insurance component. There is no provision in it for those who have a shorter lifespan to subsidise those who have a longer lifespan. So there is no insurance component in this sense. Each person maintains his own Minimum Sum amount and his own Retirement Account, and he will withdraw from it a monthly amount that has already been calculated on the basis of 20 years. He asked whether the monthly withdrawal amount will be adjusted to take into account for inflation. Yes, this will be done. We have already been doing so with the current Minimum Sum Scheme and we will continue to take this adjustment to take into account inflation. He has also asked that when the retirement age is raised from the current level of 60 to 63 or more, will the monthly withdrawal amount be increased? Let me first point out that the monthly withdrawal amount will now be dependent on the Minimum Sum amount that a person sets aside. While the possibility exists that as a person works for a longer period, he should have more money in his Minimum Sum and his Retirement Account, he should be able to withdraw a bigger amount. We will have to study, as Dr Soin pointed out, what are the changes in the life expectancy of Singaporeans in the next 10 to 30 years.”
“Mr Speaker, Sir, first of all, may I thank the Chairman of the GPC for Labour and other MPs who have spoken up in support of the changes. I will address the questions as they were raised by each of the Members. The Chairman of the GPC for Labour sought a few clarifications. First, he wants to know what will happen if a member dies just a few years after his retirement. What will happen to the remaining money in his Retirement Account? There are two possible scenarios. If the surviving spouse is not a CPF member, then obviously the surviving spouse is not covered by the Minimum Sum requirement. In that case, all the money that is remaining in the deceased member's Retirement Account will go to the surviving spouse or to the nominees that he has appointed during his lifetime. On the other hand, if the surviving spouse is a CPF member, and the surviving spouse and the deceased had jointly set aside one-and-a-half times of the Minimum Sum requirement for married couples, then we will take the remaining money in the deceased's Retirement Account and use it to top up the surviving spouse's Minimum Sum account to the full amount. Thereafter, whatever money that is still left in the deceased's Retirement Account will be paid out to the spouse or to his nominees that he has appointed in his lifetime. Sir, he has also asked whether the withdrawal amount of $450 per month will be paid during a CPF member's entire lifetime. We have structured the Minimum Sum on the basis of ensuring that a retiree will have a stream of income which will support him for a period of 20 years because that is the expected retirement period based on current life expectancy.”
“About 90% of active CPF members will have more than double the $4,000 cash component of the Minimum Sum after 1st July 1995. If you refer to of Table 6, you will see the figures there. of Table 6 also shows that more than 80% of active CPF members reaching the age of 55 in the year 2003, will have total CPF savings which exceed the Minimum Sum requirement of $80,000. Table 6 - PROJECTED NET AND REGROSSED BALANCE (IN ORDINARY AND SPECIAL ACCOUNTS) OF ACTIVE CPF MEMBERS (NRIC) WHO REACH AGE 55 IN 1995 AND 2003 (Cols. 965 - 966) In conclusion, Sir, the revised Minimum Sum Scheme will better prepare our population for a longer retirement. The $80,000 Minimum Sum amount will support retirees at a modest standard of living. It will enable them to remain self-reliant and not suffer the indignity of having to depend on the State for public assistance.”