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Straits Times
05-07-2025
- Business
- Straits Times
CPF's central philosophy of self-reliance remains as pertinent as ever: SM Lee
Sign up now: Get ST's newsletters delivered to your inbox Senior Minister Lee Hsien Loong delivering a speech at the launch of the CPF 70th Anniversary Commemorative Book on July 5. SINGAPORE - The Central Provident Fund's (CPF) central philosophy of self-reliance remains as pertinent as ever, with an emphasis on each generation funding its own retirement needs based on individual savings. With this approach, Singapore avoids burdening younger generations with older generations' retirement needs, said Senior Minister Lee Hsien Loong on July 5 at the launch of the CPF 70th anniversary commemorative book. 'The ethos of fairness and personal responsibility fosters the right attitudes towards work, retirement and active ageing. 'This is in sharp contrast to the countries which have adopted tax-based 'Pay-As-You-Go' (PAYG) pension systems,' said SM Lee at the event held Our Tampines Hub, which Minister for Manpower, Dr Tan See Leng attended. In the PAYG systems, people have no incentive to retire later. SM Lee said it is politically very difficult even to broach the topic of pension reform. 'Because in these systems, retirement benefits are entitlements, paid for not by themselves, but by the next generation of taxpayers,' he added. SM Lee said while self-reliance works well for the majority of the population, Singapore recognises its limits for lower-income workers and those who have not been in the workforce, such as housewives. He said the Government complements members' own savings with targeted state support to those who need it more. 'We have built this into structural components of our social safety nets, such as the Workfare Income Supplement scheme, the Silver Support Scheme, and tax incentives to encourage voluntary CPF contributions from family members,' he said. SM Lee added that the Government also provides additional support through packages for the Pioneer, Merdeka and Majulah generations, as well as periodic CPF top-ups in the annual Budgets whenever the economy does well. 'This ensures a certain degree of intergenerational equity, so that the older generations too share the fruits of the nation's progress, which was only possible because of their earlier hard work and sacrifices. 'But the basic principle remains: you must try your best to provide for your own future needs. If that is still not enough, the Government will be there to help you,' he added. In his speech, SM Lee recounted how he had once met the late Lord Paul Myners, a British financial expert and the UK City Minister, who said with people living longer, there were only three ways for them to still have enough for retirement: save more while working, spend less every month, or work longer and retire later. SM Lee said: 'There is no other painless way out... All countries are confronted with this trilemma, and neither can Singapore escape these choices.' While it is possible to make balanced, practical and politically workable arrangements to ensure Singapore's retirement adequacy, SM Lee said each decision and change to the CPF system must be carefully thought through as it affects the lives and plans of millions of people. He said the schemes must be patiently and clearly explained to win support. 'In the end, for the whole CPF system to function and to endure, Singaporeans must have faith that the system is sound, and that the rules ultimately serve their best interests,' added SM Lee. Noting that public trust in the CPF is very high, SM Lee said many members voluntarily top up their own and their family members' CPF accounts with cash. 'Last year, (CPF) members made 875,000 such tops-ups, totalling nearly $5 billion. Even when members reach 65, a significant minority do not make any withdrawals. 'They just leave the money in the CPF's good hands,' he said. 'They are confident that their money is safe, and they know that they are getting more than a fair deal,' he said, adding that this trust took a long time to build and must never be taken for granted. He said while the CPF is in a generally good state now, the savings scheme will have to be adapted and updated to keep it fit-for-purpose for new generations of Singaporeans. This calls for some very tough choices, said Mr Lee. SM Lee, who was first elected as MP in 1984, said the CPF contribution rate had risen from 10 per cent, when the scheme was introduced in 1955 - five per cent each from the employee and employer - to 50 per cent by 1985. When Singapore was hit by the global recession in 1985, the first since independence, the Government decided to cut employer's contribution rates by 15 percentage points, which meant a pay cut for workers. Despite it being a painful decision, SM Lee said it was the only quick way to revive the economy. This process was repeated twice: in the Asian Financial Crisis in 1997 to 1998, and again in the early 2000s after the September 11 terrorist attacks. Currently, the CPF contribution rate stands at 37 per cent, which SM Lee said is about the right level for the long term. Changes were also made to the withdrawal age, he noted. At first, CPF members could withdraw all their savings once they reached 55. SM Lee said this was not unreasonable for an era when life expectancy was only around 60. But as life expectancies lengthened into 70s and 80s, those who did not carefully steward their retirement sum could easily exhaust their savings early. The Government proposed a Minimum Sum to be kept in members' CPF, which would spread out monthly payments over a period of years. Members could withdraw only the balance beyond this sum. The Minimum Sum is now known as the Retirement Sum. It has been raised regularly to keep pace with rising incomes and cost of living, noted SM Lee. Another major improvement to the CPF scheme is the Lifelong Income for the Elderly (CPF LIFE), which converted members' CPF savings into annuities. Turning to the retirement age, SM Lee said the Government encountered pushback over delayed CPF payouts when they moved for people to work longer. Currently, the bulk of CPF payouts start from 65, to align with the re-employment age. As retirement and re-employment ages continued to rise, the Government decided not to correspondingly delay the payouts further. The Basic, Full and Enhanced Retirement Sums, as well as the CPF LIFE scheme ensured a baseline of retirement adequacy for everyone, said SM Lee. 'It is a great triumph of our CPF system, and the way we have designed the schemes and the incentives – that as Singaporeans live longer, they want to work longer, and to accumulate more CPF savings for themselves, for as long as they can,' he added. SM Lee said the CPF story is, at its heart, a Singapore story - one of self-reliance, ingenuity, and constant adaptation. He added: 'Singapore is internationally recognised as having one of the best national retirement systems in the world. So we can be justly proud of the CPF scheme.'
Business Times
28-04-2025
- Business
- Business Times
Tripartism key to safeguarding jobs, incomes amid global uncertainty: Tan See Leng
[SINGAPORE] Close tripartite relations are more important than ever amid unprecedented trade tensions and a weakening global order, said Manpower Minister Tan See Leng in his May Day message on Tuesday (Apr 29). The relationship between government, unions and employers is the foundation of Singapore's growth – and matters more than ever in the current uncertainty, he said. With major economies imposing tit-for-tat tariffs, Singapore – a small and open economy – will not be spared, he said. 'As disruptions to trade and investments grow, so will the pressure on jobs and incomes.' Supporting workers and employers Dr Tan gave an overview of how the government is supporting both workers and businesses, and creating better workplaces. He noted progress in uplifting lower-wage workers through initiatives such as the Progressive Wage Model and the Workfare Income Supplement scheme. Real wages for workers at the 20th percentile grew by 5.8 per cent between 2019 and 2024, outpacing median wage growth of 3.56 per cent. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Platform workers now get more protections, while the government is helping senior workers continue working if they wish to, with reviews of employment policies and initiatives to make workplaces more age-friendly. For companies, the government is helping them 'transform and thrive', said Dr Tan, acknowledging the pressures that employers face in a fast-changing world. He pointed to Budget 2025's S$400 million Enterprise Workforce Transformation Package and S$200 million top-up to the NTUC Company Training Committee programme. On building better workplaces, new Tripartite Guidelines on Flexible Work Arrangement Requests have set clearer ground rules for discussions between employers and workers. The Workplace Fairness Act was also passed earlier this year, in a major step in reinforcing Singapore's stand against discrimination, he added. As expectations change, 'the road ahead will be more complex', said Dr Tan. Sustaining tripartism will become increasingly challenging as work evolves and pressures from the tripartite partners' 'respective constituencies' grow. 'But true partnership is not measured in calm, but in how we hold on through the storm. We must sustain tripartism not because it is easy, but because it works.'
Business Times
28-04-2025
- Business
- Business Times
Singapore election 2025 Day 6: PAP, SDP, WP to hold rallies, including lunchtime rally at UOB Plaza
SINGAPORE – It's the sixth day of GE2025 campaigning on Monday (Apr 28), with the People's Action Party (PAP) having held the election's first lunchtime rally at the promenade near UOB Plaza. Traditionally known as the Fullerton rally, it drew a crowd of office workers to hear Prime Minister Lawrence Wong, alongside Minister in the Prime Minister's Office Indranee Rajah and seven PAP newcomers: Bernadette Giam David Hoe David Neo Goh Hanyan Hazlina Abdul Halim Jagathishwaran Rajo Syed Harun Alhabsyi, former Nominated Member of Parliament In case you missed it, here's our livestream of the rally to rewatch at your leisure. At the rally, PM Wong said that the vote for the opposition is not a 'free vote for more alternative voices', but a vote to weaken the PAP team. Opposition wins could cause the loss of three or four ministers, which would weaken not just the government but the country, at an already challenging time, he said. The current economic turbulence 'is not a passing storm', he warned. 'This storm will test us, and if we are not careful, we could lose everything that we have worked so hard to build here in Singapore.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up If the PAP earns a weak mandate in GE2025, bigger countries might be temped to push Singapore around, he added. Apart from economic pressures, here's what he said on other issues: On goods and services tax (GST) hikes: 'The opposition wants foreigners, tourists and higher-income families to pay a lower rate of GST. Would you? I wouldn't. I think it's fair and right of them to pay the full rate. But for lower and middle income Singaporeans – we protect you, we shield you, we give you permanent GST vouchers in cash, which means you pay an effectively lower GST rate.' On the opposition's idea of a minimum wage: ' It sounds good on paper. But if we implement this by law, companies will have to pay more for their workers. Your costs will go up. Companies can only recover it by raising prices on the goods and services they sell to Singaporeans. So how does this solve cost of living pressures?' Instead, there are existing policies such as the Workfare Income Supplement and Progressive Wage Model, he said. On opposition manifestos: 'Their manifestos have many details, (and are) a long wish list, but are they feasible, viable and sustainable? Will there be negative outcomes? Please think about it,' he said. 'If something sounds too good to be true, it probably is too good to be true. There is no such thing as a free lunch.' The PAP will also hold three rallies tonight, while the Singapore Democratic Party and Workers' Party will hold one each. See the lists below for their locations and timings, along livestream links if you'd rather watch online. Today's election rally sites: Today's rally livestreams: People's Action Party (Jalan Besar GRC) * lunchtime Fullerton rally People's Action Party (Jurong Central SMC) People's Action Party (Pasir Ris-Changi GRC) People's Action Party (Sembawang GRC) Singapore Democratic Party (Marsiling-Yew Tee GRC) Workers' Party (Punggol GRC) For more election coverage, visit our GE2025 microsite
Straits Times
26-04-2025
- Business
- Straits Times
PSP's minimum wage idea is ‘easy way out', says PAP's Gan Siow Huang
PAP candidate for Marymount SMC Gan Siow Huang greets residents at Bishan Park and along Bishan Street 22 on April 26. ST PHOTO: TARYN NG Follow our live coverage here. SINGAPORE - The PSP's proposal for a minimum monthly wage in Singapore 'sounds simple' and is an 'easy way out', said PAP's Gan Siow Huang, who is defending her Marymount seat in the general election. In an interview with The Sunday Times on April 26, she noted that the Progressive Wage Model (PWM) by the PAP's Government offers a more comprehensive and sustainable solution for lower-wage workers. 'I do not assume that a single wage, minimum wage, will be sufficient for all... The more difficult thing is how to have a more targeted minimum wage for each sector, and that takes a lot of hard work,' said Ms Gan, who is the Minister of State for Education and Manpower. 'Because in each sector, we have to get both the employers and unions to come together to a common landing on what is a reasonable, sustainable minimum wage for that sector.' Ms Gan, 50, spoke to ST after a walkabout in Bishan on April 26, when she was asked about the comments made by her opponent, Mr Jeffrey Khoo, during a PSP rally two days ago. PAP candidate for Marymount SMC Gan Siow Huang greets residents at Bishan Park and along Bishan Street 22 on April 26, 2025. ST PHOTO: TARYN NG Mr Khoo, the chief executive of a regional risk consulting firm, had called for a $2,250 minimum monthly wage and policies to prioritise Singaporeans in the workforce. The PWM, said Ms Gan, links wage increases to skills upgrading and productivity, and it is a more calibrated approach that takes into account industry needs. The Workfare Income Supplement scheme, a government initiative that provides cash and CPF top-ups for lower-wage workers, is another way to help workers, she added. Mr Khoo had also suggested implementing stronger 'Singaporean-first' policies in relation to the Government's Fair Consideration Framework, which sets out requirements for employers here to consider the workforce fairly for job opportunities. In response, Ms Gan said such comments do not take into account Singapore's size and lack of natural resources. Likening it to United States President Donald Trump's political slogan, she said: 'You look at the US' 'Make America great again'. Are they? 'Our market is very small... So if you want to compete for businesses, if you want to bring in investments, you must make sure we have talent and be humble. While we have very good talent here, we don't have enough.' PAP candidate for Marymount SMC Gan Siow Huang greets residents at Bishan Park and at a coffee shop along Bishan Street 22 on April 26. ST PHOTO: TARYN NG Instead of shutting others out, she added that Singapore should aim to build a strong and diverse workforce that includes local and global talent. The battle in the single-seat ward will see Ms Gan, who won 55.04 per cent of the vote against PSP's Ang Yong Guan's (44.96 per cent) in her first contest in 2020, facing a PSP opponent again. Mr Khoo was part of the PSP's best performing team at the last polls, which took 48.32 per cent of the vote in West Coast GRC. On her opponent, Ms Gan noted that though Mr Khoo has experience contesting in elections, his experience is in West Coast, not Marymount, where the needs of residents are different. 'For the last five years, I've been very active on the ground, and I am confident that by now most residents will know what I stand for, who I am, and I think I'm in a better position,' she added. In her time as Marymount MP, said Ms Gan, she brought several projects to fruition, including a new bus stop and bus service 162 along Sin Ming Road, sheltered linkways, and the redevelopment of Thomson Community Club. The club is expected to be completed in a few weeks after a delay – it was originally estimated to be completed by late 2021, but work stopped when the previous contractor encountered unforseen business challenges during the pandemic and could not continue. She added that plans are underway for three more Active Ageing Centres in the area and a new covered linkway across Bishan Street 22 which connects to Bishan North Shopping Mall. She said: 'This is a high demand, high-interest item by the residents. The last five years, many residents have been asking me to have this built so that it will be more convenient, rain or shine, for them to access the neighbourhood town.' Elisha Tushara is a correspondent at The Straits Times specialising in Singapore's education landscape. Join ST's WhatsApp Channel and get the latest news and must-reads.
