A protest held over the weekend has further highlighted Singaporeans’ growing concerns over the transparency and flexibility of the Central Provident Fund (CPF).
The demonstration on Saturday – which drew in a crowd of more than 2,000 people at Hong Lim Park – followed the latest introduction of a new minimum sum for CPF, stating $155,000 is required to be set aside in retirement funds for Singaporeans turning 55 between July 1 this year and June 30 next year.
The move has unsettled a number of lower and middle-income Singaporeans, who are afraid they won’t be able to save enough to meet the new requirement.
While the Ministry of Manpower (MOM) stated this sum was “to better meet Singaporeans’ expectations of basic standard of living in retirement”, protest organiser and activist Han Hui Hui said in a press release that “the CPF is akin to an additional tax on our income”.
“There is no transparency and accountability towards how the government is using our CPF monies, or the returns derived from CPF funds.
“All these despite MPs calling for higher rates, improvements to our CPF system practically every year.”
According to the protest’s Facebook page, the demonstration included speeches from reform party member Prabu Ramachandran and former Singapore Democratic Party member Vincent Wijeysingha.
Singapore Democratic Party chief Chee Soon Juan also voiced his sentiments in a message read out by 17-year-old representative Ariffin Sha.
“It is undesirable that after working till the age of 55, Singaporeans are unable to take out their CPF and retire with many elderly resorting to collecting cardboards or selling tissues papers to sustain their daily needs,” Han had stated earlier.
“As such, this event aims to highlight the inadequate measures in place to protect the retirement needs of Singaporeans.”
The CPF issue was discussed in Parliament last month, and the government said it is looking at ways to improve the scheme. Manpower Minister Tan Chuan-Jin previously said that while the scheme may not be perfect, it provides ” more sustainable system than most other retirement schemes”.
However, the slow wage growth and rising living costs have complicated what was originally designed as a retirement scheme, as the CPF system is used to help lift Singapore’s homeownership rates to one of the highest in the world. This has potentially curbed Singaporeans’ ability to save for retirement, some analyists argue.
Recent surveys, such as this one, suggests the fear of not being able to save for retirement is very real.
This study found Singaporeans feel the need to continue working past the country’s minimum retirement age in order to manage their finances, with 58% of respondents over 40 planning to carry on working when they reach retirement and 12% wanting to extend their tenure with their current employer.