'No perfect' CPF system exists, but its self-reliance principle is still pertinent: SM Lee
He added that while there is "no perfect CPF system", Singaporeans are generally in a good state now.
As society's needs and working patterns change, and life expectancies lengthen further, the government will have to adapt and update the CPF scheme to keep it "fit-for-purpose" for new generations, he said.
"This will be a perpetual process of innovation and adaptation. But that's the nature of many public policy issues," he said, adding that there is never a "once-for-all final solution".
The CPF scheme is one such government policy that will always evolve and improve, but the same can be said of many others, including housing, healthcare, education and security, he added.
SM Lee was speaking at the launch of a commemorative book by CPF to mark its 70th anniversary at Our Tampines Hub. The launch was also joined by Minister for Manpower, Dr Tan See Leng.
At the launch, CPF also introduced a new one-stop financial guidance platform, Plan Life Ahead, Now! (PLAN), where members can access a personalised dashboard of financial planners.
In Singapore, each generation funds its own retirement needs, SM Lee said.
'While self-reliance works well for the majority of the population, we recognise its limits for lower-income workers and for those who have not been in the workforce, such as housewives,' he added.
In these cases, the government complements members' savings with targeted state support, such as the Workfare Income Supplement scheme, Silver Support Scheme and tax incentives to encourage voluntary CPF contributions from family members, he said.
The government also provides additional support through packages for the Pioneer, Merdeka and Majulah generations, and periodic top-ups, which ensures a certain degree of intergenerational equity.
'But the basic principle remains: You must try your best to provide for your own future needs. And if that is still not enough, the government will be there to help you,' he said.
Looking back at the past 70 years of CPF's history, SM Lee said "some very tough choices" were made in adjusting CPF rules and schemes.
For example, the government had to cut employers' contribution rates by 15 per cent in 1985, after the total CPF contribution rate of 50 per cent from both employees and employers proved too high to sustain.
The government also had to repeat the process of cutting CPF contribution rates during the Asian Financial Crisis in 1997, and in the early 2000s after the 9/11 terrorist attacks in the United States.
It took them until 2015 to finally reach the total contribution rate of 37 per cent, which is about the "right level for the long term", SM Lee said.
"NO OTHER PAINLESS WAY OUT"
In his speech, SM Lee recalled meeting the late Lord Paul Myners, a British financial expert and UK city minister, who had done a comprehensive review of institutional investments made by UK insurance companies and pension funds.
"He explained to me bluntly that with people living longer, there were basically only three ways for them to still have enough for retirement: One, save more while working. Two, spend less every month, to make their retirement savings last longer; or three, work longer and retire later," he said.
"There is no other painless way out."
All countries are confronted with this trilemma, and Singapore is no exception.
"But that doesn't mean there is no way forward. It is still possible to make balanced, practical and politically workable arrangements in these three dimensions, to ensure Singaporeans' retirement adequacy," he said.
The delinking of the CPF withdrawal age from retirement age has made it easier to raise retirement and re-employment ages to encourage workers to work longer, he said.
While the national retirement age is 63, many choose to continue working, perhaps in a lighter job, beyond that, he added.
SM Lee said that every change to the CPF system must be "carefully thought through".
"In the end, for the whole CPF system to function and endure, Singaporeans must have faith that the scheme is sound and that the rules ultimately serve their best interests," he said.
Today, public trust in the CPF is "very high", SM Lee added.
People "faithfully" make their contributions every month, and many members voluntarily top up their own and their family members' CPF accounts with cash.
Even when members reach 65 years old - when CPF payouts start - about 30 per cent do not make any withdrawals.
"They are confident their money is safe, and they know that they are getting more than a fair deal," SM Lee said.
NEW FINANCIAL PLANNING TOOL
SM Lee penned the forward of the new book, called Save & Sound: 70 Years of CPF, which can be downloaded at CPF's website. The book chronicles the organisation's journey over the past seven decades and documents how the CPF system has evolved over the years.
Through its new one-stop financial guidance platform, CPF members can access a personalised dashboard which consolidates digital CPF planners, such as the retirement payout planner, home purchase planner and the health insurance planner.
The dashboard also pools together curated educational resources and features a new financial fitness questionnaire, where members can conduct self-assessments on their overall financial health.
Announcing the launch of PLAN with CPF, CPF Board CEO Melissa Khoo said the dashboard seeks to enable members to make more informed financial decisions across different life stages.
'As we mark our 70th anniversary, we want to build on the CPF Board's legacy of service and innovation, and strengthen our commitment to support members through life's milestones, she said.
CPF will also hold a CPF70 and Life's Supermarket exhibitions at Our Tampines Hub, which runs until Jul 10.
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CPF at 70 – the evolution of a do-it-all social security scheme that still finds it impossible to please everyone
Twelve years ago, Mr Francis Tan and his spouse sat across from a Housing and Development Board (HDB) officer, preparing to sign the deed for their first home. The money they had in their Central Provident Fund (CPF) accounts was enough to pay off in full their selected four-room flat in Woodlands. 'I felt so proud inside,' Mr Tan, 47, recalled. By then, he had already spent over a decade working in the Singapore Air Force. 'I was only 35 and I could own my very own flat with no debt at all.' His wife was a low-level logistics worker in the supply chain industry at the time. A dozen years before that, Mr Tan's friend had had to fork out close to S$60,000 for an emergency operation for a premature baby – a sum the friend would not have been able to afford without the money he had accumulated in his CPF account, Mr Tan recounted. 'Those CPF savings were our saving grace,' he said of both his home purchase and his friend's family medical emergency. 'It was an answer to a question we don't have yet.' These incidents anchor Mr Tan's belief in Singapore's unique social security scheme, which has led him to volunteer for the CPF since 2021. In this role, he helps others improve their understanding of its various schemes at roadshows and self-help lobbies, despite his busy schedule as a financial adviser and small business owner. On the other hand, bring up the topic of CPF to younger workers such as 27-year-old software engineer Saranya Thiru and a number of reservations might surface. For starters, she believes that the current system gives a disproportionate advantage to higher-income earners, who gain more from the compounding effects of interest on their CPF savings over time. For Singaporeans in lower income brackets, the CPF, which requires those 55 years old and under to contribute 20 per cent of their monthly salary, can feel more like a constraint than a safety net. Ms Saranya said: 'It forces me to save for something in the future, but what if I don't even have enough for a rainy period today? If I have family members who I need money to care for now, what do I do about that?' She also has doubts about relying solely on CPF for retirement. 'I think many in my generation don't see CPF as their be-all and end-all,' she said. 'I don't know if the rules are going to be the same by the time I get older. What if I can only withdraw my funds when I turn 70, but I want to retire by 55?' Seven decades since its inception on July 1, 1955, through the launch of many new schemes and iterations, the relevance and the adequacy of the CPF as a pillar of Singaporeans' retirement continues to spark debate and divide public opinion. The ups and downs of this 70-year journey from a colonial creation to an all-encompassing social security system are chronicled in a new commemorative book released by CPF Board on Saturday (Jul 5). Titled Save and Sound, it is written by Singapore-based content and communications agency The Nutgraf. Senior Minister Lee Hsien Loong, who launched the book, wrote in its foreword that the CPF was a 'bold, forward-looking decision' and that 'few institutions have impacted Singapore society more profoundly'. He added: 'Over 70 years, a simple retirement savings scheme has been transformed into an indispensable pillar of our social security system, and become internationally recognised as one of the most effective and sustainable social security systems in the world." Yet as the fund expanded and became deeply embedded in key milestones of Singaporeans' lives, scepticism grew alongside it. These were voiced quietly at times by figures within the establishment, the labour movement and business circles, and loudly at other times by activists and members of the public. Looking back, CPF Board's chief executive officer Melissa Khoo told CNA TODAY that the most significant turning point was how the tide of public sentiment had changed since the CPF protests in Hong Lim Park back in 2014. It has 'taken years' of public engagement to nurture the wide range of trusted partnerships that the CPF Board has today, she said. 'The CPF started as a simple savings scheme for old age. However, with Singapore's changing demographic trends, it was imperative that the CPF system evolve. Today, the CPF has evolved into a comprehensive social security system, supporting Singaporeans not just in retirement, but housing and healthcare, too,' she added. 'There is no universal model of social security that works for everyone. For us, it is social security, Singapore-style.' THE BIRTH OF AN IDEA During postwar Singapore, saving money for retirement was a luxury most workers could not afford. Only a few employers and the civil service provided their workers with retirement benefits. The question at the time was not whether workers deserved state protection during retirement, but who should pay for it. In March 1949, then opposition backbencher Lim Yew Hock from the Progressive Party persuaded the Legislative Council to study 'medical care, unemployment benefits and old‑age pensions' for labourers . When discussions turned into drafting, British administrators issued a reminder that any scheme had to be financially sound. 'Everything you get has got to be paid for', Colonial Secretary PAB McKerron said. The colonial government at the time did not want to replicate British welfarism in its Southeast Asian colonies, which would be paid for by the British taxpayer. It sought a self‑financing scheme – a provident fund – that kept colonial expenditures off Westminster's books. Some sources said David Marshall, who would later become the first Chief Minister of Singapore, wired £20 of his own money to a Queen's Counsel in London for advice on how to structure a provident fund for Singapore that the Singapore Progressive Party was looking into at the time. The party's president Tan Chye Cheng later tabled the CPF Bill in May 1951, proposing a self‑funded, defined‑contribution plan that split a 5 per cent wage deduction equally between employer and employee until age 55. A government-appointed Retirement Benefits Commission recommended a different approach – a social pension that paid S$30 a month for life, financed by a 60‑cent weekly employer levy and smaller worker co‑payments. It took two years of debate before legislators rejected the pension as fiscally open‑ended and opted for a fully funded provident fund, enshrining self‑provision as the system's creed. The CPF ordinance was passed in 1953 and Singapore's first social security scheme was set to start on Labour Day – May 1, 1955. Three days before its launch, the start date was postponed by two months in the midst of street‑level anger that a 5 per cent CPF contribution would slash the average worker's already meagre pay. Discontent over wages, union grievances and anxiety over the new CPF scheme led to the Hock Lee bus riots of April 1955, which led to four deaths and 31 people injured. To calm the ground, legislators exempted workers earning under S$200 a month from the CPF scheme and rescheduled it for Jul 1 that year. Thus, from day one, CPF embodied a tension that would echo for decades: state‑mandated thrift versus reduced monthly take‑home pay. Yet, the insistence on a self‑funded individual ledger also birthed what founding Prime Minister Lee Kuan Yew would later hail as the lynchpin of Singapore's social compact – that 'every worker should accumulate his own savings in the CPF for old age', as he wrote in his memoir From Third World to First: The Singapore Story. FROM PIGGY BANK TO POLICY ENGINE At its launch, the CPF system was almost immediately under threat of termination, as colonial legislators picked on the main exclusions of large parts of the population as a key concern – non-workers, including women who did not have formal employment, and those earning under S$200 monthly were not covered by the scheme. There were also early calls for the savings to be used by members for a variety of purposes, from unemployment assistance to healthcare, but the CPF management roundly rejected such calls. Mr RK Malcolm, CPF's first general manager, was quoted as saying: 'The question of unemployment and sickness benefits is important but it is not related to the purpose of the Provident Fund.' By 1957, the colonial government was already seeking an alternative system that went beyond retirement adequacy and also addressed these social goals. It appointed the Caine Committee, named after British economist Sydney Caine, which saw the need for a 'comprehensive review of the whole social security system' to include unemployment insurance and minimum wages, on top of a pension scheme that would replace the CPF and was said to be more redistributive in nature. To do so, CPF balances would need to be returned to members and the fund would have to be wound up, with CPF Board staff members redeployed to a new social security department. The legislative work to put this new system in place began in early 1959 but by then, Singapore was about to enter a new era of internal self-governance, with the People's Action Party (PAP) winning that year's General Election for the first time and forming the government. Drawn by how welfarism in Western nations created a 'crutch mentality' among their populaces, founding Prime Minister Lee Kuan Yew wanted a different approach: to create a 'fair society' instead of one based on welfare, his memoirs stated. The newly formed PAP government inherited the CPF system from the British and continued refining a conservative nest-egg approach to retirement savings. This was known as a defined-contributions pension system that used individualised accounts, in which the amount that members enjoyed in retirement wholly depended on how much they had contributed over a lifetime of earnings. Contributions were legally mandated and withdrawals were not allowed until the person turns 55. However, by decade's end, the nest egg was reshaped over the next quarter of a century into the main engine of Singapore's housing push and the ballast for its healthcare financing. In 1968, while the newly independent nation mulled the consequences of the British decision to pull its troops out from Singapore and Malaysia by 1971, Lee Kuan Yew called upon all Singaporeans to put in 'improvement and effort'. For the first time, Singaporeans could tap their CPF savings for the down payments on their HDB flats, a move that became key to driving Singapore's homeownership rates upwards and giving people a stake in the country's future. At the same time, contribution rates from CPF members and their employers were raised from a total of 10 per cent to 13 per cent. 'I want to stress that nobody is getting less; in fact, everybody is getting more. What we have the right to expect is that everybody puts in more,' Lee Kuan Yew said in a July 1968 parliamentary sitting. The new scheme to open up the use of CPF funds for home purchases proved 'extremely popular', CPF Board's Save and Sound book stated. About a week after the changes, the daily newspaper The Straits Times reported that there was a rush for HDB flats. Around 900 flat applications were made over nine days, or 100 a day, which is far higher than the 40 daily applications previously. In 1969 alone, around 8,000 people registered to buy HDB flats, comparable to the total of 8,500 flat applications made in the five years after HDB flats were first launched from 1964 to 1968. A third of Singaporeans lived in public homes by the end of the decade. In these early years, the CPF was seen as a 'choice architect', using policy to nudge Singaporeans towards decisions that aligned with state objectives. However, these schemes also saw a fair share of criticism, including from people within the establishment. Former labour chief and Cabinet minister Lim Boon Heng told the authors of Save and Sound that the proportion of CPF savings allowed to be used for housing was 'way too high' and had the effect of pushing up home prices while depressing retirement funds. 'When people have more money they can deploy, the demand for housing and the type of housing rises; so prices rise. It is the fundamental law of economics. So people are happy when they see the value of their homes rise," he was quoted in the book as saying. 'But when people retire, they find themselves asset-rich but cash-poor. It is a social problem today.' As for healthcare, the government later established the national medical savings scheme Medisave in 1984, allowing Singapore workers to save for their own and their family's medical needs. PAP old guard Toh Chin Chye, who was previously health minister and deputy prime minister, believed deeply in free healthcare and clashed with Lee Kuan Yew over the concept of people self-funding their healthcare. His successor in the health portfolio Goh Chok Tong, when introducing Medisave to fellow parliamentarians, stated: 'Healthcare must be the social responsibility not solely, but primarily, of any government. But it does not mean that you discharge your social responsibility by dispensing free medicine or heavily subsidised medicine.' Abstaining from the Medisave vote, Toh later also deeply disagreed with a recommended move to raise the CPF's drawdown age from 55 to 60 or 65, which he said was 'a breach of the CPF's fundamental principle', The Straits Times reported during another parliamentary debate that year. The debate came about after the government released a report on the problems of the aged, commonly referred to as the Howe Yoon Chong report, named after the health minister at the time. Longer lifespans meant that many CPF members, after taking out their funds at the original drawdown age of 55 set by the British, would run out of savings in their later years. The report thus suggested raising the drawdown age, but this was met with strong opposition. The report had, in Toh's words, 'stirred the hornet's nest' – the PAP saw a 12 percentage point drop in votes in the 1984 General Election with many attributing this result to the report. Heated discussions about retirement adequacy eventually led to the creation of the Minimum Sum Scheme, proposed by then Second Labour Minister S Jayakumar as an alternative to the report's suggestions, and then introduced in 1987 by Mr Goh who had become the deputy prime minister. Under the scheme, people could withdraw part of their savings at 55, while the remainder could be taken out in stages. Even then, this issue of longevity risk would continue in the ensuing decades and put further strain on the CPF. Current Manpower Minister Tan See Leng said to CNA TODAY: 'Since its inception in 1955, our CPF system has been enhanced over many decades. Back then, life expectancy was much lower and the system's main focus was saving for retirement. 'But as Singapore transformed, so did the CPF. Today, it not only supports retirement but also helps with housing and healthcare needs, giving Singaporeans more confidence in their financial future.' ECONOMIC SHOCKS, CPF CUTS Even as the CPF emerged as a cornerstone of social security, its strength as a policy lever also meant that it became a tempting tool for macroeconomic adjustments during times of crisis. In the 1970s, Singapore's economy was in the midst of transitioning from labour-intensive work to capital-heavy, higher-value manufacturing. In tandem with this, the government embarked on a three-year wage restructuring effort starting in 1979, which featured large hikes to the CPF contribution rates as well as corrective wage increases to compel employers to focus on higher-value work. These repeated cost increases for businesses came to a head in 1985. That year, Singapore experienced its first recession since gaining independence, with a significant increase in unemployment and companies going bankrupt. Owing to weak global economic growth, a construction slump and slowing demand for exports from Singapore, among other reasons, the nation's economy shrunk for the first time, by 1.4 per cent, in the second quarter of 1985. To cushion employers from mounting costs and to help stave off further retrenchments, the government drastically reduced employers' CPF contribution rates from 25 per cent to just 10 per cent. This extreme measure drew immediate criticism. Mr K Karthikeyan, who had worked in the petroleum industry in the 1980s before becoming a union leader, recalled the palpable sense of injustice among his peer group. 'Many of them were not happy and asked why we needed to cut it,' he said. One particular group – workers with young families who were either planning to use their CPF savings to pay for a flat under the 1968 Public Housing Scheme or relied on the CPF to service their housing loans – had gone into a 'panic', Mr Karthikeyan added. By 1987, though, economic growth bounced back to 10.8 per cent, owing partly to the cut. In his 1987 New Year message, then Prime Minister Lee Kuan Yew said that Singaporeans 'have spared themselves higher inflation and a longer recession' by 'not flinching from painful policies'. Employers' CPF contribution rates eventually rose back to 20 per cent in 1994, with employees contributing the same rate. Following the 1985 recession, the government sought to move away from using CPF rate cuts as a wage-cutting tool. It embarked on wage reforms, and annual bonuses became pegged to business profitability. Wages could include monthly variable components that could be quickly adjusted in times of need. Barely a decade later, however, another storm in the form of the 1997 Asian Financial Crisis once again forced the nation into defensive economic posturing. This time, with regional currencies and stock markets in freefall, the government took the controversial step of cutting employers' CPF contribution rates from 20 per cent to 10 per cent. Singaporeans questioned the rationale behind repeatedly tapping their hard-earned savings to mitigate economic shocks, which seemed to undermine the CPF's promise as a secure savings scheme. Mr Karthikeyan, who by this point had been the secretary-general for the United Workers of Petroleum Industry (UWPI) for around 10 years, said there were some workers who were optimistic that the employer contribution rates would increase in time to come. 'But there were a majority of people who felt that the government was just cutting (the employers' contribution rates) – and that it didn't understand our pain.' Behind closed doors, many union leaders were also reluctant to accept the cut, Ms K Thanaletchimi told CNA TODAY. President of the National Trades Union Congress (NTUC) now, she was the general treasurer of the National University Hospital Employees Union at the time, and she recalled multiple political office-holders engaging unionists in numerous 'pressing discussions'. 'Some felt very strongly about the government reducing some of the other costs that would impede the growth of companies instead, like the cost of rental and utilities. 'Many had asked if we could do other things other than reduce CPF contribution rates, which was a blunt instrument that cut across all sectors, whether you did well or you did badly,' she said. Ultimately, union leaders understood the 'gravity' of the financial crisis and the need to move fast, and that manpower costs were by and large the biggest expense firms had to cough up, Ms Thanaletchimi said. 'I remember having to speak 'broken' (colloquial) Malay and Hokkien to try and convince my members,' she added. 'What made them trust the union instead of protesting was honesty and transparency – we did not hide anything from them. Whatever the ministers had assured us of, we translated that in simple terms.' Fellow unionist, Mr Karthikeyan, said it was somewhat easier to appease workers that the move was a temporary measure in 1999 than it was in 1985 – as employer contribution rates were raised back up slowly after being cut in the 1980s. Alas, that did not happen this time around. The turning point came in 2003, when then Prime Minister Goh Chok Tong announced that employer CPF contributions would not be restored to pre-1985 rates. The CPF salary ceiling – the maximum portion of one's monthly wage that is eligible for CPF contributions – would also be progressively reduced from S$6,000 to S$4,500 over two years. The priority at the time was to save jobs amid growing low-cost competition overseas: The lowered salary ceiling was expected to save businesses about S$400 million in wage costs yearly. At his National Day Rally speech that year, Mr Goh outlined the need to make Singapore workers an attractive prospect for businesses. 'From this social perspective, the higher the CPF contribution rate, the better. But from the viewpoint of keeping our economy competitive, the CPF should be as light a burden as possible,' he said. 'High CPF contributions increase employers' wage costs. To them, the CPF is a statutory burden, unrelated to the performance of the company or the worker.' Just a few weeks later, Mr Goh reiterated in a ministerial statement in parliament that the move to reduce CPF contributions was crucial because the low cost of doing business in countries such as China and India had made them 'extremely attractive to investors'. 'Therefore, from the economic perspective, we should keep the CPF contribution rate as low as possible,' he said. 'The lower we go, the less the pressure on companies to move out because of high wage costs.' The Asian Financial Crisis in the 1990s marked the last time CPF contribution rates had to be lowered to control wages during a crisis. CPF rates were not changed during the 2003 severe acute respiratory syndrome outbreak in Singapore, the 2008 global financial crisis or the 2021 COVID-19 pandemic. Instead, the rates have continued to climb over the years. This year, total contribution rates for members under the age of 50 is 37 per cent – nearing the 40 per cent target set previously – with 20 per cent of contributions coming from the employee and 17 per cent from the employer. Just as rate cuts affect businesses across the board regardless of their performance, rate increases also apply uniformly across industries. Singapore National Employers Federation president Tan Hee Teck said that for small- and medium-sized enterprises as well as food-and-beverage businesses 'facing cost pressures on multiple fronts', this can be especially challenging. He told CNA TODAY that there is a constant need to find a balance between workers' retirement adequacy and employers' economic sustainability, as well as between the short- and long-term interests of society. 'For example, during uncertain or weak economic conditions, we must moderate cost pressures on employers and allow time for business prospects to improve and labour productivity to grow. Only by growing the economic pie can we support a sustainable growth of both businesses and wages,' he said. BACK TO THE LIFE EXPECTANCY PROBLEM With Singapore managing to weather the economic crises at the turn of the millennium, policymakers turned their attention to the longer-term hot potato of funding an adequate pension scheme. By then, many Singaporeans were living past the age of 80, burdening a CPF system that was meant to cater for life spans of around 60 when it first started in 1955. People were also having fewer children, which meant that they could not rely as much on familial support in their old age. During this period before pension reforms could happen, the government repeatedly saw the need to increase the minimum sum, delay the drawdown age – now known as the payout eligibility age – and impose stricter withdrawal limits so that CPF members had enough savings for retirement. All of these measures gradually added to the anxieties of Singaporeans who were accustomed to the idea of having a large sum of their savings suddenly available to them when they turned 55. Dr Ng Eng Hen, who was manpower minister from 2004 to 2008, said that this longevity issue was not a problem unique to Singapore. 'The need for pension reforms is universal. Countries can either admit it or not. If they don't admit it, it doesn't change the fact that they are underfunded. And when the needs come a-calling and if your pension system is underfunded, it breaks down,' he told CNA TODAY in an interview. For Singapore, the big change arrived during the 2007 National Day Rally, when then Prime Minister Lee Hsien Loong announced a new national longevity insurance scheme called the CPF Lifelong Income For the Elderly, or CPF Life in short. CPF Life, a compulsory annuity scheme that provides lifelong payouts to retired members, is unique in the world for its funding structure. While it still maintains the concept of the minimum sum (now known as the retirement sum) from defined-contributions systems such as the original CPF scheme, it borrows actuarial elements from defined-benefits pension schemes elsewhere by pooling together the interest earned from CPF savings. This way, CPF members are still responsible for their own retirement savings by saving enough to meet their retirement sum, but their longevity risks are efficiently 'pooled' across the population, so that those who lead longer lives continue to get supported in their later years. On paper, this was an idea that made a lot of sense. However, in reality, selling the idea of an annuity scheme to Singaporeans who could not opt out of it required plenty of explanations and persuasion. Mr Willie Tan, chief executive officer of the CPF Board from 2002 to 2005, told CNA TODAY: 'The challenge was to persuade CPF members that participation in an annuities scheme was logical when no one can determine with any certainty how long he or she will live after retirement. 'We needed to give some assurance that those who pass on early would not lose their CPF savings entirely.' Dr Ng, who delivered the ministerial statement on CPF Life in 2007, said convincing Singaporeans required more than just logical arguments. 'It doesn't take two hours to convince somebody of all this … But at the end of it, after you speak to them, they say, 'Yah, but I'm going to die early'. There is no answer to that.' People were also used to an incumbent system where they could withdraw a large bulk of their CPF savings at a certain age, he added. 'They wouldn't say it, but the implication was that when I run out of savings for my retirement, if my family doesn't support me, then the state should help me. That was the emotional argument that was difficult to sell,' Dr Ng said. He also said that it was 'politically very difficult' for the government to institute these reforms, but Singapore was 'very fortunate' in that it could be done anyway. 'But just think – if we didn't do it, if we're stuck to the old system, which was … a drawdown at age 55. It's unthinkable now.' Owing in part to a lack of understanding of CPF policies at the time, the anxieties over the CPF system gave rise to conspiracy theories that the government sought to hoard wealth and cover sovereign fund losses from poor investments, and that CPF savings would disappear if members died too early to reap the benefits of the lifelong monthly payouts. A few people also insinuated corruption by Singapore's leaders. As a result, public support for CPF dipped and on Jun 7, 2014, more than 2,000 people gathered at Speakers' Corner in Hong Lim Park holding up 'Return Our CPF' placards to voice their unhappiness over a perceived lack of transparency in how CPF monies were handled. People also turned on the scheme's custodian CPF Board, with staff members recalling how they would avoid telling taxi drivers where they worked. They would get off a distance from their CPF offices and walk the rest of the way, Save and Sound stated. Speaking to CNA TODAY, Mr Ong Chian Fuh, 41, a senior manager at the CPF Board at the time, recalled how hostile some CPF public outreach sessions became, with audiences applauding those who took to the microphone to openly cast doubt and question the policies that he was trying to explain. 'My personal take then was that the government wasn't very forthcoming to address all these allegations at the start. It gave citizens the feeling that the government was trying to hide something,' Mr Ong said. He started working at the CPF Board 15 years ago. 'The root cause was that people didn't understand the CPF system and that was why when someone tried to stoke negative emotions, people started to buy in ... When nobody understood anything, they just believed the one who was loudest.' The incident highlighted to the CPF Board the need for better public communications. Mr Ong recalled how the CPF Board, under the leadership of then CEO Ng Chee Peng, eventually moved away from its passive stance towards public education and started to actively work with commercial partners such as banks, private insurers and even real estate companies to spread the word about the merits of the CPF system. The CPF Board did not do so before because it had feared that these private entities would use CPF's branding as a 'marketing hook' to convince people to sign up for their products, Mr Ong said. However, after the 'Return Our CPF' protests, it realised that it had to adopt a new mindset. Continuing on the efforts of his predecessor, Mr Augustin Lee, who took the reins in 2019, sought to firmly rebut viral and inaccurate stories on social media that mischaracterised the CPF, including by sharing details of specific cases with the news media. 'The public deserves to hear both sides of the story. When we put out the full facts, those posts lost their sting. If those posts were left unclarified, public confidence in the CPF would be eroded,' Mr Augustin Lee said. He is presently the second permanent secretary in the Prime Minister's Office and the Ministry of Education. 'But more than this, we had to rethink how we step up public engagement. For example, in situations where there were memes on the CPF, we had to counter those as well with some of our own and do it with humour,' he added. The CPF Board's website was also revamped. Now, it no longer merely states what the CPF rules are but also explains why they benefit its members. Speaking to CNA TODAY, Dr Tan the manpower minister said he saw how the CPF had helped Singaporeans in their healthcare expenses when he was a medical doctor. Later, as a business owner – he was previously managing director of private healthcare provider IHH Healthcare – he understood the challenges of running a business. So, when he first joined the Ministry of Manpower (MOM) in 2021, his aim was to make the CPF system more intuitive and simple, and make it easier for members to top up their retirement nest egg and to receive payouts during retirement. 'This goal has not changed and we will continue working towards it,' he said. WHAT'S NEXT IN THE CPF STORY? Now in its 70th year, the CPF system still remains a relevant and critical pillar in Singapore's social security system. The Mercer CFA Institute Global Pension Index, which evaluates and scores pension systems worldwide, ranked CPF fifth in the world in 2024. Ms Khoo, the CPF Board's current CEO, said: 'This may be our highest ranking yet, but it does not mean we will rest on our laurels. With over four million members today, we are constantly striving to improve our policies and schemes to do better for them.' "While we cannot predict exactly how CPF will change 30 years down the road, we know our system must evolve to meet changing needs.' Demographic changes, new modes of work and technological advances will force the CPF to adapt, as will the expanding diversity of people's retirement needs. For example, nowadays, there is a greater desire among financially savvy Singaporeans who want to earn an interest rate above that offered by CPF, while being willing to take on risks that come with such investments. The government had started to liberalise the system for CPF money to be used for investment purposes in the late 1970s. Back then, members were allowed to withdraw their CPF savings to buy shares in the national bus firm Singapore Bus Service Limited, which is now SBS Transit. Over the years, there were other moves to allow CPF members access to their savings for investments in the Singapore bourse and other nationalised companies. This effort led to the creation of the CPF Investment Scheme (CPFIS), which granted members more choice in deciding which equities to invest in, should they have enough stipulated funds to do so. As of the first quarter of 2025, there are around S$21.3 billion in holdings in the CPFIS Ordinary Account, while CPF members have withdrawn around S$4.9 billion from the Special Account to invest in lower-risk financial instruments. These moves to unlock CPF funds for investment uses came with limits, because the flipside to greater flexibility was that an economic downturn would put these investments, and thus people's retirement savings, at risk. Over a five-year period from 2020 to 2024, around 43 per cent of members who invested their Ordinary Account funds either made profits below the 2.5 per cent base interest rate that they would have earned if they had just left their funds untouched, or they lost money. Pointing out the fact that longer-term CPF accounts earned an interest rate floor of 4 per cent regardless of market conditions, Mr Augustin Lee the former CEO of the CPF Board said that this was a 'major strength of our CPF system'. 'CPF members don't have to worry about whether a recession coincides with the year they retire … This is possible only because the full balance sheet of the government is standing behind CPF.' Commenting on this desire for people to manage their own finances, Dr Tan said: 'It is a delicate balance that we have to strike. I know Singaporeans sometimes ask, 'Why can't I do this? It is my CPF money, I should be able to use it for my own needs and wants'. 'For sure, your CPF money is your hard-earned savings, but we must remember that it is not an individual savings account. The CPF is a social security system that works because of collective participation, risk-sharing and prudent management.' To him, it is not a matter of whether the CPF system should be more rigid or more flexible in the years ahead. 'What is more important is how we can help Singaporeans make the right decisions to support their desired retirement lifestyle, while giving them some flexibility.' The goal to help Singaporeans retire with greater confidence, by growing their hard-earned savings in order to receive lifelong CPF Life payouts in their retirement, remains the mission of the CPF system, Dr Tan added. To cater for platform workers who were not in formal employment, the government introduced the Platform Workers' Act last year, mandating CPF contributions for gig workers such as delivery riders and private-hire drivers. Dr Tan said the government recognises that the work landscape is changing and that there are more people in favour of platform work or flexi-hour jobs. 'This group of people would also have the same aspirations as regular employees – they also want to own a home, have financial adequacy when it comes to their retirement in their golden years and have the means to take care of their own healthcare needs,' the minister told CNA TODAY. Hence, it is key to help this group start building their CPF savings, whether through mandatory contributions or by encouraging them to make voluntary top-ups, he added. However, the move faced pushback – platform companies expressed concerns about increased operational costs leading to higher consumer prices, while workers worried about reduced take-home pay at a time when earnings were already falling. In response to CNA TODAY's queries, NTUC's assistant-secretary Yeo Wan Ling said that the labour movement and the nation's three platform work associations (PWAs) acknowledged the concerns of platform workers. The varying monthly earnings of these workers may also make it more complex to calculate and verify their CPF contributions compared with salaried employees, she noted. To help platform workers better understand CPF contributions, Ms Yeo said NTUC has organised outreach events, created detailed infographics explaining the scheme and partnered with MOM and CPF on digital campaign displays put up at HDB lift panels, with online links to CPF information. 'Our goal is to help platform workers feel confident about taking steps towards their long-term financial security,' she added. Separately, medical breakthroughs that dramatically extend lifespan may be a boon for humanity, but such developments could also put immense pressure on pension systems and their financing models in the near future. Dr Ng, former defence minister who was a surgeon before entering politics, pointed to recent discoveries in cellular regeneration and scientific advances in preventing apoptosis, or cell death. 'Suppose you had a pill that could increase the average lifespan by 20 years for everybody, then obviously you will need to have a reset,' he said. Even without such a pill, the human lifespan is already increasing year by year, he added. When CPF Life was introduced in 2007, the life expectancy at birth for females and males was 82.9 and 78.1 respectively. Today, it is 85.6 for females and 81.2 for males. Dr Ng, who is now a retiree himself, said that should such a scientific breakthrough become reality, the government is able to devise new solutions because the CPF system is 'fundamentally strong'. 'The pillars are there ... I think we have among the strongest systems (in the world), but the most important is the trust between the government and the (people),' he added. 'If that continues, then you can find solutions. You know, it's not rocket science, it's what we need to do and how we do it, and I think we will have to patiently, gently explain the problem to people.'
CNA
an hour ago
- CNA
Driven to put Singapore on the world map, ex-GIC scholar co-founded business with Zuckerberg's sister
When Debbie Soon arrived in Los Angeles at the start of 2021, the COVID-19 pandemic had brought the world to a standstill. While family and friends were hunkering down in Singapore, Ms Soon had other plans. Leaving behind a stable role at mixed martial arts organisation ONE Championship – where she worked after completing her scholarship bond and also at Singapore's sovereign wealth fund GIC – she packed her bags and moved halfway across the world to the United States without a job waiting for her on the other side. The 36-year-old: 'I'd always wanted to experience living and working in the US ... I was just, like, 'You know what? I'm going to take a leap of faith and I'm just going to move and I'll see what happens'.' That seemed to be her approach to most things – just take the plunge and see where it would lead. I stumbled upon Ms Soon's profile online and was struck by her varied curriculum vitae and unconventional career trajectory. Curious to learn more, I spoke with her to find out how a Singaporean who once followed the traditional academic track ended up forging such a unique path. While clocking full-time hours at GIC, she opened one of the first boutique spin studios in Singapore. After GIC, she pivoted to the world of mixed martial arts before moving to the US and diving headfirst into the uncharted waters of Web3, a blockchain-based internet that uses decentralised technology to operate. While cooped up in Los Angeles during the pandemic, a chance online meeting with Meta founder Mark Zuckerberg's older sister Randi led to the duo launching HUG, a social marketplace for artists to showcase and sell their digital and physical work. Today, she is the marketing head at Privy, a cryptocurrency wallet provider and startup recently acquired by payment technology firm Stripe. Speaking to me over a video call from her home in New York City on Jul 2, where she's now in the midst of relocating, Ms Soon immediately struck me as a spirited and determined go-getter who doesn't let ideas remain mere ideas. Asked how she would describe herself, she said she was 'definitely ambitious' and 'kind of unconventional'. 'I think I always look to do things a little bit differently from other people. And deep down, I'm pretty optimistic. Even if, in the moment, I feel like things are really bad, at the back of my mind, I (still) believe in a better future and a better outcome.' A combination of these traits and her appetite for risk – which she tells me is 'more calculated than people think' – has shaped every chapter of her life. GROWING UP IN THE LITTLE RED DOT The younger of two children and the daughter of a civil servant and lecturer, Ms Soon spent most of her childhood living in Clementi. Throughout her schooling years at Raffles Girls' School and Hwa Chong Institution, she picked up several co-curricular activities and hobbies, from robotics to choir, being a librarian to building her own websites. She also played football and was in the drama club. As she spoke candidly about the various things she had dabbled in or pursued, it soon became clear to me – over two hour-long conversations on separate days – that she was immensely curious about many things and this likely underpinned her career choices after her scholarship. Despite her interest in the arts in school and technology outside of it, Ms Soon decided to take up a GIC scholarship to study economics at England's University of Cambridge, followed by a postgraduate degree in financial engineering at Columbia University in New York. 'I think it's quite common in Singapore, and just in Asian upbringing, to always pick the practical path. So even though my favourite subjects in school were history and literature, I think I ended up picking the most practical thing to study, which was economics, and then, became a GIC scholar.' While at GIC, Ms Soon worked as a portfolio manager on the global equities team covering consumer brands including luxury goods conglomerate LVMH, fast-food chain McDonald's, sporting goods company Nike, as well as e-commerce giant Amazon. Her interest in entrepreneurship, she said, came from her work at GIC after spending time speaking to the higher management of various companies. Her role involved gathering as much information as possible from stakeholders in order to assess how their businesses were performing. 'And while I think I was decent at stock picking and pretty good at making calls, there was definitely a part of me that felt a bit like a fraud. What made me think that I, as a 20-something-year-old, can have a better idea of how to run a company than (these) very senior executives, and I've never even run a company myself?' FIRST TASTE OF ENTREPRENEURSHIP A few years into the job, Ms Soon still felt unfulfilled despite doing 'all the right things' to do well at GIC. So midway through her bond, she opened 7Cycle with a colleague. The pair rented a three-storey shophouse along Boon Tat Street – a five-minute walk from her office. 'Back in the day, I had no idea what I was doing. I didn't know all of the things that I didn't know … I was just so young and had so much bravado that I was, like, 'Oh, this is so easy, I'm sure anyone can do it, right?',' she said. 'But I mean, that ended up being probably the best experience of my life.' Besides running the operations of the indoor cycling salon, she also doubled up as an instructor. 'I was originally not planning to be one of the instructors, but ... I thought, 'this seems really fun, I feel I could do it and I think I'd be pretty good at it',' she said, punctuating that sentence with her signature laugh. Her optimism and can-do attitude were infectious. I often feel self-conscious about being bad at new hobbies, but listening to her, I found myself inspired to adopt the same mindset to simply give things a go. Even with her go-getter spirit, Ms Soon knew she had to call it quits on the spin studio in 2015 – which she sold off – when it was too difficult to juggle her full-time job and side hustle. Somehow, she could not shake the feeling that something was still missing at work despite ticking 'starting a business' off her list. 'For the first 20-plus years of my life, everything was very extrinsically motivated in terms of needing to check every single box and doing the sensible and realistic thing,' she said. With that lingering sense of dissatisfaction, Ms Soon eventually left GIC to become chief of staff at ONE Championship – a move she saw as a 'great opportunity' to learn from its chief executive officer Chatri Sityodtong. Over three years, she led multiple projects, including helming the company's expansion into e-sports, overseeing its consumer merchandise arm and setting up its e-commerce store, which later thrived during the pandemic. CHANCE MEETING WITH A ZUCKERBERG When the pandemic struck and live sports events were put on hold, Ms Soon said she had the time to reflect on what she really wanted out of life. She recalled how much she had enjoyed living in the US when she was in university and realised she still wanted to work there. With just two suitcases and her dog Guinness, she took a one-way flight to Los Angeles. She had set aside six months of savings, fully prepared to go without employment for that period. Asked what her family thought of her move, she said: 'I think they would definitely think that I take risks.' Although she would deem herself a risk-taker, the risks she takes are 'calculated' and she's 'totally prepared for the downside', she said. Although she had already had her first taste of entrepreneurship, Ms Soon was determined to push this even further. In the US, she was accepted into a Founder in Residence programme, an initiative by a venture capital firm aimed at supporting early-stage entrepreneurs by providing resources to develop and scale their businesses. This opened doors to potential investors and business mentors. One such mentor she met there introduced her to the world of cryptocurrency and sparked her interest in the emerging field because it was a refreshing change from the traditional finance background she had. 'The thing that made me really excited about crypto was that people were really open to meeting people on the internet, because it's still a very native internet community type of thing, which was reminiscent of those days when I was in secondary school and I had my websites and I was meeting all these strangers on the internet,' she said. At the same time, unable to meet people in real life because of lockdowns, she began to get active in online communities. It was also in one of these communities with an interest in Non-fungible tokens (NFTs) on the Discord platform that Ms Soon first got acquainted with Ms Randi Zuckerberg. Ms Soon had published a post sharing that she was keen to move into working full-time in crypto. She included a summary of her background and appealed to the community, asking if anyone was looking for a collaborator or knew of any openings. Ms Zuckerberg responded to her post and the pair quickly hit it off over a Zoom call. 'I think we were both really excited by crypto at the time it was taking off,' Ms Soon said. 'Obviously ... now we know it is a much more volatile industry. But at the time that we met, crypto prices were soaring and it was like a bull market,' she continued, adding that they saw the potential to build a profitable business. The two of them discovered a shared passion for the intersection of art and technology. Ms Zuckerberg had already spent about seven years working on Broadway since leaving Facebook and they both agreed that NFTs seemed like the 'perfect' way to blend art and technology. This led to the birth of HUG, a consolidated social marketplace allowing creators to showcase and sell both physical and digital works, including NFTs, through a single storefront – a business Ms Soon described as 'Facebook meets Etsy'. Things swiftly picked up momentum. Together, the pair ran the business for about three years until it was acquired at the start of this year. They no longer run a business together now but they are still in touch. Around a year ago while working on HUG, Ms Soon relocated from Los Angeles to Miami to live in her then-boyfriend's hometown. PUTTING SINGAPORE ON THE WORLD MAP In the meantime, Ms Soon's active presence on social media platform X posting about crypto caught the attention of publishing house Wiley, which approached her about writing a book on the subject. Titled Digital Mavericks, her book was published earlier this year and serves as both a guide to the crypto industry and a collection of interviews with people in the space. Outside of work, Ms Soon developed a keen interest in 'vibe coding', a practice where technology powered by artificial intelligence generates code that is based on user prompts. She used this to create an online personality quiz promoting her book. In an almost serendipitous turn of events, Ms Soon said she built the quiz using Privy, a crypto startup specialising in e-wallet infrastructure that was recently acquired by digital payments giant Stripe. This initial connection eventually led to her joining Privy earlier this year, shortly after she and Ms Zuckerberg sold HUG. Today, Ms Soon is preparing for her next move to New York City, where she will work in person at the Privy office. It is a move that brings her almost full circle, back to the city where she once studied as a postgraduate, and a dream she has held onto ever since then. On what motivates her to continue making her mark in the digital and crypto space, Ms Soon said she remembered how during her college years, there were people who did not even know where Singapore was. 'In some ways, that always motivated me to want to do something bigger. It also made me hungrier for working on things on a global scale,' she added. 'Growing up in this small, (often) overlooked country, the little red dot ... it's always been the underdog. 'And I feel very motivated to put Singapore on the world map ... I think (that) could mean different things to different people. To me, I definitely feel like I'm working in an industry where there is the opportunity to really shape things. 'I don't know what the end state looks like, but I think at the end of the day, I want to be working on meaningful things.' Ms Soon also loves hearing people 'say nice things about Singapore' while she is in the US. Admittedly, she once felt slightly self-conscious about being a Singaporean, but she now begins every self-introduction by proudly stating that she is 'Singapore-born and raised'. 'At the end of the day, Singapore for me will always be home. My parents are there, my brother is there, my two young nephews are there. 'As I've grown older, my perspective has changed a lot. I'm very proud to be Singaporean and I will talk about it any chance that I get.'
Independent Singapore
2 hours ago
- Independent Singapore
Is earning S$6.8K at 23 in Singapore impressive or just average? Young foreigner asks
SINGAPORE: For most young professionals, the chance to live and work in a foreign country is as exciting as it is unnerving. That's precisely where one 23-year-old finds himself as he equips himself to transfer to Singapore for a two-year contract, prepared with a newly issued job offer and a monthly remuneration of S$6,800. With a Reddit post, he put his inquiries to the international online community: Is this a decent compensation for someone just starting? Can I afford rent at S$2,500/month? And significantly, how relaxed and sustainable will my lifestyle be? The response from experienced locals and fellow expatriates was instantaneous and perceptive, offering clarification on both the financial truths and prospects that come with living in the Lion City. Impressive for his age Redditors agreed that S$6,800 is a good beginning salary, specifically for a 23-year-old. 'Many people at that age can only dream of having this type of pay,' one user wrote. 'Heck, you might even be making more than someone with 10 years more experience.' While background, like education, industry, and work experience, is missing, their shared opinion is that he's doing well based on local standards. Singapore's median monthly salary (as of 2024) floats around S$5,000, so this income already puts him securely elevated. See also Zhang Ziyi's daughter has a crush on Wang Leehom Rent: How far will S$2,500 go? One of the poster's major worries was housing, whether a S$2,500/month house rental is realistic. The short answer: it depends on what he's looking for and where. For that amount, choices include a one-bedroom condo unit in an outlying city location or a more expansive flat in a residential area. However, leasing an entire apartment in central areas such as Orchard, Tanjong Pagar, or Marina Bay will be stretching the budget. Redditors provided some viewpoint here, too: 'If you choose to rent a room (and not a whole flat) a bit further from the centre, cook at home or eat at hawker centres, and take mostly public transport, you can save up at least S$3,000 a month.' So, even though S$2,500 could get a desirable flat on a respectable site, it might come at the cost of savings, except if lifestyle choices are consequently fine-tuned. Comfort vs. savings A major theme that can be gleaned from the Reddit conversation is balance. Yes, one can likely live very contentedly on a S$6.8K pay, but living huge could mean saving little. Singapore offers a variety of lifestyle choices like Michelin-starred hawker kiosks and expensive bistros, glossy MRT trains and always-available ride-hailing apps, luxurious fitness centres in the CBD and ActiveSG public sports services in the heartlands. The trick, as one Redditor put it, is making concessions and striking a balance: 'Don't stay at Orchard, don't spend $15 for every meal, and don't take Grab everywhere—but also don't feel bad for treating yourself to a nice croissant if you feel like it.' Eventually, it comes down to one's priorities. Do you want to take trips often, live alone, or eat out? One can, comfortably even. But then, savings will have to be relegated to the background. Or are you the type who prefers to store up a substantial chunk of money every month? Sharing a condo flat, using public transportation, and eating at hawker centres can go a long way. Other costs to consider The young expat also inquired regarding monthly expenditures outside of rent. Healthcare, for instance, is costly, specifically if you're depending exclusively on private care. 'S$800 for medical expenses isn't great,' one Redditor cautioned. 'One ultrasound at a private clinic can already cost more than S$100; an MRI, a few hundred.' This cautioned him that even in an extremely technologically advanced system, quality care has a steep price, particularly when there's no all-inclusive insurance. A promising start with room to grow For a young adult starting on a global exploration, S$6,800/month in Singapore is a solid foothold. It offers comfort, a decent lifestyle, and—if managed well—an excellent savings rate too. But like in any other place, lifestyle choices are the real game changers. As the Reddit crowd astutely emphasised, 'The question is, do you prefer to save money or live as comfortably as possible?'
