Longevity insurance plan to top manpower's agenda in
2008
By S Ramesh, Channel NewsAsia | Posted: 19 December 2007 1630
hrs
SINGAPORE : With more Singaporeans expected to live longer, the
Manpower Ministry has focused its attention on helping Singaporeans
grow their CPF savings.
The aim is also to ensure that Singaporeans have enough money to
see them through their old age.
And to do this, Prime Minister Lee Hsien Loong announced several
schemes during this year's National Day Rally.
Singapore's job market is seeing its best ever performance in
years.
And riding on this sentiment, older workers are being hired by more
companies.
The Manpower Ministry said 44 percent of those aged 60 to 64 are
being employed, compared to just 33 percent in 2004.
But the better figures don't tell the full story and employers have
another concern.
"If it is the tight labour market that's pushing the participation
up, then when the tight labour market goes, will companies then
push out older workers? And the older workers will again be in the
same situation as in a couple of years ago," questioned Stephen
Lee, president of the Singapore National Employers' Federation
(SNEF).
"Our job really is to use these few years to try and change some
fundamental practices of companies, to anchor the older workers as
part and parcel of their everyday employment policy," he
said.
This is why the proposed re-employment legislation, which will kick
in by 2012, is crucial.
Said Heng Chee How, NTUC's Deputy Secretary-General: "We have
started collecting information on cases and examples from our union
ground, examples of extension of retirement, is it a simple
extension or have there been work arrangements adjusted in
different industries to facilitate.
"So we are now documenting carefully all these cases in order for
us to better understand what are the tactics that would work,
generally or in given industries and to see how to promote and
scale up.
"We certainly cannot (rely on) the law as the cure. What we need to
do is get all these examples and get the first movers, to
illustrate that you are not asking companies to do national
service. You are actually making a business case."
Helping Singaporeans work longer is only one part of the solution;
ensuring their CPF savings last as long as possible is the other
challenge.
For this reason, Prime Minister Lee announced a delayed drawdown
age of the CPF Minimum Sum, starting in 2012. This will then be
raised every year.
A tripartite committee was also set up to study the National
Longevity Insurance Plan or better known as an annuities
scheme.
Chaired by Professor Lim Pin, the committee has had six dialogue
sessions with various stakeholders, among them trade unionists,
employers groups and insurance companies.
"The few important things people continue to talk about is, can I
believe that there is a 50 percent chance of living beyond 85.
That's one of the most fundamental issue, because once they don't
believe that, the whole scheme is nonsense. So that is the very
important part of our work - how to let people know that this is a
fact and not a fiction," explained Professor Lim, who chairs the
National Longevity Insurance Committee.
"Suppose I am the one who doesn't get to live that long, do I get
the money back and what is the arrangement? Those will be the kind
of feedback from the ground," said Mr Heng.
While details of the scheme have yet to be confirmed, Professor Lim
feels that the longevity insurance must benefit the target group,
so premiums have to be kept affordable.
"It's for the low income group, they are the ones who really need
it and they will be excluded if you keep on raising the costs. This
is the kind of balance you have strike," said Professor Lim.
Professor Lim hopes to wrap up his committee's work with one more
meeting. The final report will be submitted to the Manpower
Minister by March 2008. - CNA /ls