CPF and Longevity Insurance

"Our families are getting smaller. We are working out support systems to help families raise their children. Ageing is a growing issue, those over 65 is increasing.

We have to have more of the over 60’s at work. The CPF drawdown age or retirement age will have to move up to life expectancy minus 20 years so that CPF need last for only 20 years. Legal age for retirement will have to go up from 62 to 65 and to 67. Eventually all those healthy and able to work, should be able to work regardless of age."

~~ Lee Kuan Yew, at the Tanjong Pagar 42nd National day celebration Dinner, 17 Aug 2007, 8.15 pm.

According to fellow blogger Goh Meng Seng, one motivation to defer the people from drawing out their saving funds from CPF is the increasing pressure of payout as more and more people reaching their draw-down eligibility age from 10 years time.

Let's check some statistic figures.

Here is the distribution of Singapore residents population by age group from the Singapore Department of Statistics :




We have a snapshot of similar data from the CPF site:



It seem to make sense but it would be exaggerating to expect similar scene below at the CPF buildings island wide:

Recent talk of the town about longevity insurance, which was previously called annuity, was hotly debated in the Parliament.

The SingaporeDaily did a good aggregator job and gave us a glimpse of what goes round in the House with those YouTube videos.

Came across a comment from Rock^Star at SGForum which prompted me to look up some statistics to support their argument.

Cue population prospect from UN Population division. This is the projection of life expectancy at birth during different period of time.

Singapore
Life expectancy at birth by sex (years)
Medium variant
1950-2050

Period	Both sexes combined	Male	Female
1950-1955	60.4	58.8	62.1
1955-1960	63.2	61.5	64.9
1960-1965	65.8	64.1	67.6
1965-1970	67.9	66.0	70.0
1970-1975	69.5	67.4	71.8
1975-1980	70.8	68.6	73.1
1980-1985	71.8	69.2	74.6
1985-1990	73.6	71.1	76.2
1990-1995	75.8	73.9	78.3
1995-2000	77.2	75.1	79.3
2000-2005	78.8	76.8	80.8
2005-2010	80.0	78.0	81.9
2010-2015	80.6	78.6	82.6
2015-2020	81.2	79.2	83.2
2020-2025	81.8	79.8	83.8
2025-2030	82.4	80.4	84.4
2030-2035	83.0	80.9	85.0
2035-2040	83.5	81.5	85.6
2040-2045	84.1	82.0	86.1
2045-2050	84.6	82.6	86.7

This is how I interpret the table: if you are born around the time 1950 to 1955, your life expectancy is 58.5 for male and 62.1 for female.

Similarly if you are the same age with our young nation, your life expectancy is 66 for male and 70 for female. Hence most of your peers will live till around the life expectancy age. While you may outlive them, if you are consider lucky/unlucky.

There is one flaw in the projection. That is the decreasing of mortality rate due to better medical care or healthier living through the years.

Nevertheless, our leaders liked to plan ahead. Hiking GST (medicine to help the poor and fund Workfare, infrastructure costs pertaining to an ageing population) while the economy is good; And proposing annuity payout beginning from age 85 is another good example.

While an ex Chief of an local insurance firm has proposed a more acceptable plan which may worth a look by the government.

Finally, it is interesting to note that NMP Siew Kum Hong's arguments on annuity proposal rang more sense than majority during Parliament.

Perhaps our expectation is a tad higher since the annoucement of civil service pay raise. And we hope FreeMan's perception is further from the truth.

We do not need sweet talk and we believe we can handle the plain truth.

Potemkin Village

"..You have one man, one vote, and it's not working in the Philippines, because you can't get rid of a president who is corrupt, because he's had more than one half of the senators unwilling to impeach him, despite all the evidence. And even in jail, he's got supporters outside. You need a certain standard of literacy, moral and ethical values, to be able to run a one man, one vote system."

~~ Lee Kuan Yew, during an interview with PBS.

Our country is not invited to the Community of Democracies Ministerial in Bamako on mid November 2007 as reported by Singabloodypore

Despite our country's affluence and efficiency, we are still considered not democratic enough by the western world.

Maybe they do not know about the free press being widely circulated over here, the likes of 我报 and Today.

So how does the international community see our prosperous, democratic society?
To get some insight, maybe we have to read some of the reports from them:

1. International Advisory Committee country report
2. Freedom house country report
3. Amnesty International news

If you can find money to kill people, you can find money to help people.

"What democracy did is to give the poor a vote. And it moves power from the market place to the polling station; from the wallet to the ballot."

~~ Tony Benn, former UK MP and minister.

Kudos to both Decentguy1 and Disgruntled for sharing these interesting clips.

There we watched a Taiwanese talk show (in mandarin cum hokkien dialect) commenting our democracy system. You are unlikely to find that being telecast in our national TV.

You may be more familiar with some of the arguments presented in the show if you regularly surf around the local socio-political blogosphere.

The next video is pretty enlightening about the history of democracy:

Part 1
Part 2
Part 3
Part 4
Part 5

While we savour the show, we have to ask ourselves this question: what is the price of democracy?

Le HongYi Fracas

"..the term ‘white horse’ was used to identify sons of influential persons to ensure that such enlistees were not given preferential treatment, and that medical classification and vocational assignment are scrupulously fair."

~~ Cedric Foo, ex Minister of State for Defence, 12th Nov 2003, explaining the classification for national servicemen in the Singapore Armed Forces, alleged for according certain special privileges to.

A junior Singapore Armed Forces (SAF) officer mass-mailed his letter of complaint to the top management in SAF, not forgetting to copy almost everyone else in some of the organization's internal mailing lists and was reprimanded for breaking the chain of command.

This caused an outbreak of discussions, be it online or around coffee tables recently.

He was touted as a self-less whistle blower. It is admirable he has the guts to speak up against the behemoth and escalate his grievance to the people up there.

But one little thing proves unfavorable against our princely hero.
He is the son of our leader.
He is supposed to be one of the elites.
That distant him a little bit from the common mass.

Then there were the critics of the young conscript, whom was considered brash and haughty for his action.

I would like to highlight some interesting points, beside the heavy local accent, found in come-back-kid, Rockster's blog .

It amazed me how careless and reckless some of our SAF officers are and was prompted to cast some doubt on them holding up the plots of our nation's defence.

To end this with a note of lighter mood, please enjoy Mr Brown's podcast.

Somber Irony

手术很成功,不过病人已经死了。

~~ 电影 《流氓医生》 (梁朝伟饰) 的一句台词。


I was filled with a sense of injustice after viewing Channel 8 News video about a mother losing her life after giving birth recently.

Is this a case of bureaucracy directly or indirectly causing harm to the common people?

According to our leader, we have an efficient health care service, albeit one which is not free, that is expected to be top class in the world.
Why would saving a person's life be obstructed by red tape?

However there are always two sides to every coin.

The concerned hospital has shed some light on the tragic event from their perspective in the official press and it is suggested the mother was suffering from complications after giving birth and the medical staff had put in their best effort to save her.

The official news reports can be found in CNA and TodayOnline.

Thoughts during a sleepless night

"The cure for all this talk is really a good dose of incompetent government... your asset values will disappear, your apartments will be worth a fraction of what it is, your jobs will be in peril, your security will be at risk and our women will become maids in other persons' countries - foreign workers."

~~ Minister Mentor Lee Kuan Yew in Sydney 04 Apr 2007 [1], referring to argument about justification for ministerial pay hike.



Recently the name Steve Chia was back in the limelight, being mentioned among netizens' discussion on ministerial pay raise issue. [2]

It seems that he was putting in good effort as a Nominated Member of Parliament (NMP) during the period 2001 to 2006, raising interesting issues in the House for the people after all.

His brushes in his personal life might have brought him down to earth and cost him some support in the 2006 General Election (GE).

It was ironical that some of us remembered more of the man's bottom than his heart.


****************

After reading Mr Wang's heartfelt posting [3] , names like James Gomez, TT Durai and Chee Soon Juan somehow flashed across my mind.

Gomez, seemingly prone to error, is back working in Sweden after the GE 2006. I supposed he can be considered as a foreign talent by the Swedes.
Will he come back and face the fire again?

Facing legal prosecution for an offense under the Prevention of Corruption Act certainly did not do any harm to Durai 's ability to provide marketing consultancy services to several firms [3] .

Similarly, Chee with a reputation for political deviance, should have no problem finding a stable job and good living abroad or perhaps locally.
Why put yourself through the trouble and create a scene barking at the Iron Tree?


****************

I came across an articel [5] by blogger, Pandemonium. It gives an insightful read about minister selection process and a way to regulate popular behavior towards unpopular policy.

Some sacrifices are more equal than others.

"The mystery of where the milk went to was soon cleared up. It was mixed every day into the pigs' mash. The early apples were now ripening, and the grass of the orchard was littered with windfalls. The animals had assumed as a matter of course that these would be shared out equally; one day, however, the order went forth that all the windfalls were to be collected and brought to the harness-room for the use of the pigs. At this some of the other animals murmured, but it was no use. All the pigs were in full agreement on this point.. ..Squealer was sent to make the necessary explanations to the others.

‘Comrades!’ he cried. ‘You do not imagine, I hope, that we pigs are doing this in a spirit of selfishness and privilege? Many of us actually dislike milk and apples. I dislike them myself. Our sole object in taking these things is to preserve our health. Milk and apples (this has been proved by Science, comrades) contain substances absolutely necessary to the well-being of a pig. We pigs are brainworkers. The whole management and organisation of this farm depend on us. Day and night we are watching over your welfare. It is for your sake that we drink that milk and eat those apples. Do you know what would happen if we pigs failed in our duty? Jones would come back! Yes, Jones would come back! Surely, comrades,’ cried Squealer almost pleadingly, skipping from side to side and whisking his tail, ‘surely there is no one among you who wants to see Jones come back?’

~~ Excerpt from Animal Farm: A Fairy Story, a novel by George Orwell, released in 1945.


Prime MinisterLee Hsien Loong mentioned one of the reasons for raising the Goods and Services Tax (GST) from 5% to 7% (starting from Jul 2007) was to have extra resources to fund social programs like Workfare later on. The aim was to strengthen the safety nets and tilt the balance in favour of the lower-income groups and the elderly, not to increase their burdens.

Are we neglecting the resources required for the ministerial pay hike?


Term I learnt today:

Molon Labe (mo-lone lah-veh)

Greek for "come and take it". It was the response of King Leonidas I of Sparta to Xerxes I of Persia at the onset of the Battle of Thermopylae, asking if they would lay down their arms.

Ministers' Pay: An International Issue

"Low salaries will draw in the hypocrites who sweet talk their way into power in the name of public service, but once in charge will show their true colour, and ruin the country."

~~ Minister Mentor, Lee Kuan Yew.




I flipped through the Transparency International Corruption Perceptions Index and noticed that 4 countries have consistently fared above us each time from 2001 through 2006.

They are Denmark, Finland, Iceland and New Zealand.

Comparing in-corruptible official to another in the apple-to-apple sense, will be a logical direction to head when dealing with their remuneration package.

How about our ministers should be paid 2/3 of their counterparts’ salaries in Denmark, Finland, Iceland and New Zealand?

I presumed the income tax rate in European countries (3/4 of countries above us in CPI ranking) are much higher than ours here.

I have not research on the salaries of government ministers in those countries.

I hope someone can enlighten me.



Reference:

1. Transparency International CPI
http://www.transparency.org/policy_research/surveys_indices/cpi

2. MM Lee speach to the National Trade Union Congress July 19 1996
http://www.fcpp.org/main/publication_detail_print.php?PubID=693

3. The picture on top is courtesy from Anonymous
Blogger Comment

4. Minister Pay benchmark 1994
SG Democrat
hkchital webby