Each one should prepare for own retirement: MOS Tan Chuan-Jin

Helping Singaporeans Work Longer
Firstly, we are helping Singaporeans to work longer, specifically, facilitating re-employment beyond the statutory retirement age of 62. The employment rate of older residents aged 55-64 has increased over the years, from 38.2% in 1991 to 59.0% in 2010. This is a positive sign, as it shows that our older workers are becoming more employable. We want to help older workers who are willing and able to continue working to do so beyond retirement, so they can be more financially secure in their old age. The Retirement and Re-employment Act passed earlier this year will provide more opportunities for older workers to do so. Under this legislation, from January 2012, employers will be required to re-employ older workers beyond the statutory minimum retirement age of 62, up to age 65, if they are eligible for re-employment. Re-employment need not be for the same job or on the same terms. The employer and the worker have the flexibility to make changes to the existing job arrangements to suit their needs. So, this is what we are doing on the re-employment front.

Making Savings Last for Life
Secondly, we are enhancing the CPF system to make CPF savings last longer for members. In 2009, we introduced CPF LIFE, which will provide members with a monthly income in their retirement years for as long as they live. This means an income for life. CPF LIFE is an improvement over the existing CPF Minimum Sum scheme which provides monthly payouts but for a finite period of about 20 years. The implementation of CPF LIFE thus marks a significant milestone in our journey to enhance Singaporean's retirement adequacy. As at June 2011, more than 60,000 members have signed up voluntarily for CPF LIFE. From 2013 onwards, we will be making CPF LIFE mandatory for members turning 55 who have more than $40,000 in their Retirement Account thus enabling them to receive an income for life.

Helping Those in Need
Thirdly, we are providing help to those who are in need. We recognise that there will be older low-wage workers who may not be able to save enough even if they work longer. Various initiatives have been introduced to help them. The Workfare Income Supplement, or WIS, is one of them. Through the WIS, the Government provides top-ups to the wages of older low-wage workers to encourage them to stay in employment and to help them increase their retirement savings. We also have the Workfare Training Support Scheme which provides more opportunities for older low-wage workers to train and upgrade their skills so that they stand a chance to earn higher wages. This year, the Government also provided a one-off Special Employment Credit to encourage employers to attract and retain their older low-wage workers. We are also in the midst of exploring more ways to help low-income workers.

From time to time, the Government also tops up CPF savings, such as the Medisave top-up from this year's Budget. 1.3 million Singaporeans aged 45 and above each received top-ups of between $300 and $800 in their Medisave – this amounted to about half a billion dollars.

The Government also pays an extra 1% interest on the first $60,000 of a member's combined balances, with up to $20,000 from the CPF Ordinary Account. Members with lower balances benefit more from the extra interest as they earn a higher effective interest.

Encouraging Family support
Fourthly, but no less importantly, family support continues to play an important role in retirement adequacy. This is especially true for those who have not been economically active or those who had intermittent or irregular employment, for whom the CPF may not cover or cover adequately. A recent study by the International Longevity Centre Singapore (ILC-Singapore) revealed that the majority of our elderly today turn to their children for support. This is good and we encourage such family support. In addition, we have schemes such as the Minimum Sum Topping-Up Scheme, for members to voluntarily top up the CPF accounts of their family members, especially those who are not working or unable to work. I am heartened that about 17,600 MSTU top-ups, totalling around $110 million, were made for parents and grandparents in cash and CPF last year. I encourage Singaporeans to continue to make use of the MSTU Scheme to help their loved ones achieve a financially secure retirement.