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Government may make buying annuity compulsory: Lim Boon
Heng
By Julia Ng, Channel NewsAsia | Posted: 14 August 2007 1745
hrs
SINGAPORE : The government may make buying annuity compulsory, said
Mr Lim Boon Heng, Minister-in-Charge of ageing issues.
Speaking to reporters after a National Day Observance ceremony at
the Mitsuboshi Overseas Headquarters on Tuesday, Mr Lim said the
government is looking to build the annuity component into
Singapore's plan for the ageing population.
With longer life expectancy, Singaporeans will have to work longer,
beyond the present retirement age of 62.
The government is considering a law on re-employment, to get
employers to guarantee their employees a job once they reach
62.
But it may not necessarily be the same job or the same
salary.
Mr Lim urged employers and employees to start preparing for the
re-employment law as soon as possible.
This is because the law would provide only a framework and not
spell out how re-employment should be done.
Besides working longer, another way to prepare for old age is to
have a form of insurance that caters to a longer lifespan.
And one way to do this is by buying an annuity.
Said Mr Lim: "If you have a full minimum sum in CPF, when you
withdraw the CPF, CPF will pay you $700 over a month. But it's for
20 years. At the end of 20 years, you'll have nothing to
withdraw.
"If you buy an annuity, the insurance company will pay you less -
$500 a month. But the insurance company will have to pay you for as
long as you live. And if you live to 100 (years old), they'll have
to continue paying you till you're 100. Therefore it's a lesser
monthly sum but you're insured a little longer.
"We may have to make it compulsory for everyone, but I think for
now, we should explain to people what annuities are and how people
can benefit, to get people to understand it." - CNA /ls
