Singapore 2011

Singapore’s retirement income system is based on the Central Provident Fund which covers all workers, including most public servants. Some benefits are available to be withdrawn at any time for specified housing and medical expenses with other benefits preserved for retirement.  A prescribed minimum amount is required to be drawn down at retirement age to buy a lifetime income stream.

The following table shows Singapore’s position when compared to the 15 other countries and some of the indicators that either scored relatively well or poorly.

The overall index value for the Singaporean system could be increased by:

• raising the minimum level of support available to the poorest pensioners
• continuing to increase the prescribed minimum that must be set aside for retirement purposes
• increasing the percentage of contributions required to be saved for retirement
• reducing the barriers to establishing tax-approved group corporate retirement plans
• increasing the labour force participation rate amongst older workers
• investing a portion of the Central Provident Fund in growth assets

The Singaporean index value fell from 59.6 in 2010 to 56.7 in 2011 due to a reduction in each of the three sub-indexes.  The reasons included a lower net household saving rate, reduced pension coverage as it is now based on population and the effect of some new investment rules.