Financing old age in a rapidly ageing high income city state: The case of Singapore / Prof. Dr. Mukul G.Asher

Asher, Mukul G. (2012) Financing old age in a rapidly ageing high income city state: The case of Singapore / Prof. Dr. Mukul G.Asher. In: International Conference On Population Ageing: Issues and Challenges, 11 July 2012, Faculty of Economics and Administration, University of Malaya, Kuala Lumpur. (Unpublished)

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Singapore, an affluent city state, is among the most rapidly ageing society globally. This is due to low fertility rate (TFR of 1.2 in 2011); and increasing life expectancy (18.3 years for men and 21.8 years for women at age 65 in 2011). Its support ratio (working age persons/elderly) is projected to decline from 7.9 in 2011 to 2.2 by 2030, representing a steep decline. It primarily relies on a mandatory savings tier to finance old age. This tier is administered by a statutory Board called Central Provident Fund (CPF) under the Ministry of Manpower. The CPF has over the years been used not just for retirement, but for housing health care, and other purposes. Its wide scope and mandate has resulted in considerable complexity. This paper provides an assessment of the extent to which the current old age financing arrangements are likely to address longevity, inflation, and survivors’ risks faced by individuals in their old age. Not only each person will need support for a longer period in old age, but societal and individual expectations about old age support are also changing, reflecting the affluent society. This paper argues that the current old age financing arrangements require substantive, not ad-hoc marginal reforms, including introduction of non-contributory budget financed social pensions. The paper suggests that such reforms are well within the capacities of Singapore’s institutional and fiscal capacities. The key constraint has been the unwillingness by the policymakers to revisit premises underlying current arrangements when demographic trends and economic and social structures have undergone a profound change.

Item Type: Conference or Workshop Item (Paper)
Keywords: CPF system, supplementary retirement system, Singapore
Subjects: 300 Social sciences > 303 Social processes
Division/Agency/State: LPPKN - National Population and Family Development Board, Malaysia > Division of Population
Deposited By: Mrs Nor Azaian Abdullah
Deposited On: 14 Jan 2013 03:49
Last Modified: 14 Jan 2013 03:49

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