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Source:
www.mom.gov.sg |
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Remarks by Dr Ng Eng Hen,
Minister for Manpower and Second Minister for Defence at the Press
Briefing on CPF Reforms and Other Measures to Help Older
Singaporeans Improve Retirement Adequacy and Work Longer, 21
August 2007, 11am |
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Introduction |
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Many significant changes to the CPF system
have been announced. Today, I will reiterate and clarify changes and
answer queries but more importantly, I wish to explain how the changes
will help elderly Singaporeans. |
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The MOM and CPFB will continue to reach out
to members to explain these changes in simple and understandable ways. |
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We will use public ads, set up call lines,
and work with the grassroot advisors and MPs. I will also make a
Ministerial Statement in Parliament in September. |
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Five key changes were announced by PM Lee in
his National Day Rally Speech on 19 August 2007. |
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The sum effect of the changes will
have a big impact on all Singaporeans to better prepare us for an
ageing population: |
(i) The changes will tilt the playing field to
benefit older workers 每 for employers to hire them and for older
workers to work longer.
(ii) Over the medium and long term, these changes will ensure
that CPF members will not outlive their retirement sums.
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Need for changes |
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The cumulative impact of three
fundamental shifts 每 falling fertility, increasing longevity and
smaller family size 每 will mean that individual members will have
to rely on their own savings and for longer to fund their
retirement periods. |
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We have to update our CPF to adjust to
these changes. Life expectancy was 61 when CPF was introduced in
1957 每 it is now 80. |
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Total fertility rate is currently
1.26, among the lowest in the world. In 1960, there were 23
residents aged 15 to 64 (economically active) to support one
resident above 65 years. |
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There are now only 9 residents. In
2020 it will drop to 5 and 2030 to 3. This means there will be
fewer young to support the old. It also means that each of us has
to work and save for our own retirement. |
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Other countries are changing also 每
extending work and delaying retirement and pensions. |
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For instance, Italy's state pension
fund will shortly have to pay out to retirees more than it
receives each year in contributions from an ever decreasing
national workforce. Last month (July), they decided to raise the
official retirement age (55 for women and 57 for men)
progressively each year until 2014. |
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In March, the German parliament voted
to raise the retirement age from 65 to 67 as part of a reform
programme aimed at tackling rapid population ageing and spiralling
pension costs. |
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In Denmark, there is broad political
consensus that the retirement age must be raised. An ageing Danish
population and the rise in life expectancy means there will be
more elderly who need care and fewer hands to give it. Last year,
the Danish Parliament decided to raise the retirement age from 65
to 67. |
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Spain's pension system is currently
studying incentives to encourage people to work beyond the current
retirement age of 65. (Source: BBC News, Guide to Europe's pension
woes, 17 August 2007) |
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Five key changes along two thrusts
were announced by PM Lee in his National Day Rally Speech on 19
August 2007. Let me elaborate on them. |
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First and most important, helping
Singaporeans work longer 每 the major focus of our efforts |
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Our previous efforts to help older
workers are working - the employment rate for residents aged 55-64
stood at a record high of 53.7% in 2006, a significant 6.7%-points
higher than that in 2004. See Annex A for details. |
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However, the employment rate for
residents declines sharply after age 55 and we need to do better. |
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Table 1: Resident
Employment Rate (%) by Age |
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Employment
rate (%) |
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Age |
2003 |
2004 |
2006 |
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55 - 59
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54.5 |
55.9 |
60.6 |
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60 - 64
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33.1 |
33.6 |
41.9 |
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55 - 64 |
45.2 |
47.0 |
53.7 |
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Source: Labour
Force Survey, MOM |
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Since the employment rate for women
has been lower traditionally, I will use data for men to
illustrate. |
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Now, 8 out of 10 men are working at
age 55 to 59, but only 6 out of 10 at age 60 to 64, and 3 out of
10 at age 65 to 69. |
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Put simply, our first challenge is to
stop those two men from dropping out of the workforce after age
60. |
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This means 21,000 males currently aged
55-59 who stop working when they turn 60-64 in 5 years' time. |
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Within the next 5 years, we will work
hard to keep at least half of them still working. This means that
we will add 10,000 residents to the workforce but if our economy
continues to grow and create about 180,000 jobs last - as it did
last year - we can absorb them. |
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For women, the base is lower, but more
effort will be needed to keep them in employment and to attract
them to rejoin the labour force. |
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More..... |
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Source:
www.mom.gov.sg Press Release
21 Aug 2007 |
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FrontPage Edition: Wed 22 August 2007
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