Top pension scheme in Asia, but … ?

We refer to the article “CPF rated ‘top pension scheme in Asia” (Straits Times,  Oct 19).

Adequacy score dropped?

It states that “A lack of adequacy in Singapore’s retirement system, which takes into account factors like benefits, savings, tax support and growth assets, was the main reason for the dip in its score.Singapore’s adequacy sub-index score was at 56.4, down from 59 last year and also below this year’s global average of 63.”

Despite highest contribution rate in the world?

– The above is an embarrassment considering that our pension contribution rate of 37% is the highest in the world.

Despite this, we are ranked 8 out of the 25 countries for adequacy.

HDB asset enhancement included?

(Note: “The adequacy sub-index considers the benefits provided to both the poor and the median-income earner, as well as several design features and characteristics (including asset allocation) which enhance the efficacy of the overall retirement income system.

The net household saving rate and home ownership rate are also included as non-pension savings can represent an important source of financial security during retirement’)

Zero growth assets?

According to the report – “The level of growth assets ranges from virtually zero in Singapore to approximately 70 percent in Australia.”

Lowest real rate of return?

– This underscores what is arguably the biggest problem of our CPF system – resulting in historically, the lowest real rate of return of all national pension schemes in the world.

No Government profits from pensions?

We are also the only scheme in the world whereby the Government kept about 3% of the annual  pension returns to itself , at the expense of the members.

S Y Lee and Leong Sze Hian

P.S. Come with your family and friends to the 5th Return Our CPF protest on 25 October 4 pm at Speakers’ Corner https://www.facebook.com/events/446619505476438/