"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.
