Special Issue: A Fifty-Year Retrospective on the Singapore Economy; Guest Editor: Linda Y. C Lim, University of MichiganNo Access

ADDING A BASIC PILLAR TO THE CENTRAL PROVIDENT FUND SYSTEM: AN ACTUARIAL ANALYSIS

NGEE-CHOON CHIA

NGEE-CHOON CHIA

Department of Economics, National University of Singapore, Singapore

Search for more papers by this author

https://doi.org/10.1142/S021759081550037XCited by:2 (Source: Crossref)

Abstract

The Central Provident Fund (CPF) system has worked well for majority of Singaporeans who are able to work consistently over their life cycle and have made prudent housing choices. However, the inherent structure of CPF, which is based purely on contributions, is unable to address retirement adequacy for its vulnerable members. Adding a means-tested non-contributory basic pillar to the system will make the system more inclusive. This paper studies the pension cost of a targeted old-age income support system for needy elderly to help meet their basic living expenses. A Lee–Carter stochastic model is used to forecast the elderly population. Pension costs depend on coverage and benefit levels and the cost of living adjustments. The viability of a basic retirement support scheme would also depend on the speed of ageing and the rate of economic growth.

Keywords:

References

Brocklehurst, GJ (1957). Report to the government of Singapore on social security measures. International Labor Office ILO/TAP/Singapore/R.3.Government Printing Office, Singapore . Google Scholar
Caine, S (1957). Report of the committee on minimum standards of livelihood, Chairman S. Caine. Government Printing Office, Singapore . Google Scholar
N. C. Chia, Singapore Economic Review 59(3), 1 (2014). Link, Web of Science, Google Scholar
Chia, NC (2015). The CPF Story: Reflecting the social and economic history of Singapore. Manuscript . Google Scholar
Chia, NC and A Tsui (2009). Monetizing housing equity to generate retirement incomes. SCAPE Working Paper No. 2009/01.NUS Economics: Singapore Center for Applied Policy and Economics . Google Scholar
Department of Statistics (DOS), Singapore (2014a). Report on the household expenditure survey, 2012/2013 . Google Scholar
Department of Statistics (DOS), Singapore (2014b). Complete Life Tables 2008–2013 for Singapore Resident Population . Google Scholar
Gillespie, RD (1959). Committee of officials established to examine the recommendations of the Brocklehurst and Caine committee reports, Singapore. Interim Report by R. D. Gillespie. Government Printing Office, Office . Google Scholar
International Labor Office (1959). Report to the government of Singapore on a proposed social security scheme, ILO/TAP/Singapore/R.5. International Labor Office, Geneva . Google Scholar
Kang, SH, ES Tan and MT Yap (2013). National survey of senior citizens 2011. Available at http://app.msf.gov.sg/Publications/National-Survey-of-Senior-Citizens-2011 [Accessed on 16 January 2015] . Google Scholar
K. Y. Lee , The Wit and Wisdom of Lee Kuan Yew ( Didier Millet Pte , 2013 ) . Google Scholar
R. D. Lee and L. R. Carter, Journal of the American Statistical Association 87(419), 659 (1992). Crossref, Web of Science, Google Scholar
McFadzean, FS (1952). Report of the retirement benefits commission. Singapore, Government Printer, Singapore . Google Scholar
Housing Development Board (HDB), Singapore (2010). Public housing in Singapore: Well-being of communities, families and the elderly. HDB Sample household survey 2008. HDB Research and planning department, March . Google Scholar
Ministry of Community Development, Youth and Sports (MCYS), Singapore (2005). The national survey of senior citizens in Singapore, 1995 and 2005. Available at http://app.msf.gov.sg/Research-Room/Research-Statistics/National-Survey-of-Senior-Citizens [Accessed on 15 January 2015] . Google Scholar
Ministry of Finance (MOF), Singapore (1961). State of Singapore Development Plan, 1961–1964. Government Publication Bureau . Google Scholar
Ministry of Health (MOH), Singapore (1984). [Howe Report] Report of the Committee on the Problems of the Aged . Google Scholar
Ministry of Social and Family Development (MSF), Singapore (2014). ComCare annual report for financial year 2013 . Google Scholar
Ministry of Trade and Industry (MTI), Singapore (2010). Report of the economic strategies committee, February . Google Scholar
National Population and Talent Division (NPTD), Singapore (2012). Projection of foreign manpower demand for healthcare sector, construction workers and foreign domestic workers . Google Scholar
National Population and Talent Division (NPTD), Singapore (2013). A sustainable population for a dynamic Singapore: Population white paper, Singapore, January. Available at http://population.sg/whitepaper/resource-files/population-white-paper.pdf . Google Scholar
National Population and Talent Division (NPTD), Singapore (2014). 2014 Population in Brief. September . Google Scholar
Shanmugaratnam, T (2015). Deputy Prime Minister and Minister for Finance. Budget 2015 Debate Round-up Speech, 5 March 2015, Singapore . Google Scholar
Thaler, RH (2011). The Annuity Puzzle. The New York Times, 4 June 2011 . Google Scholar