Thursday, September 20, 2007

NSP - Compulsory Annuity is a Raw Deal

Press Release - The Compulsory Annuity Scheme By Any Name Is A Raw Deal
Wed, Sep 19, 2007

The National Solidarity Party (NSP) noted the Parliamentary speech by Dr Ng Eng Hen, and would like to ‘thank’ the government for “being very brave in tackling” the long overdue social issue concerning the financing of the aged. Although this issue was not born yesterday, this ‘First World’ government has nevertheless taken just over 20 years to act on the abundance of statistical information derived from the regular national censuses.

We would thus like to mark this momentous occasion with a stern condemnation of the government for their myopic vision and arthritic reaction to the urgency. The situation is aggravated by the government’s careless policies on the use of the CPF money for both the purchase of expensive public housing (asset enhancement) and as a tool for their economic fiscal manipulation (contribution rate cut), ultimately reducing the retirement fund due to the people. The government has no defence against the people’s right to refuse to foot the bill of a problem created by the bungled management of the government.

It is pathetically meaningless for the government to chatter on and on about the details of the compulsory annuity scheme. The NSP strongly reminds this government that the people are the backbone of society, and the people have laboured to build the success story of this society in collaboration with the policies of the government. As the caretaker and ‘child’ of society, the government is two-faced to harp on the value of filial piety on the one hand, and then act in contrary by readily abandoning the people at the first sign of burden, much like children discarding their aged parents who had toiled to raise them up.

The NSP would like to state that we do not support the compulsory annuity scheme as we believe that there are better and fairer alternatives which do not unfairly dispossess people of their life savings. However, we foresee the habit of the government to ignore sound advices and bulldoze the compulsory nature of the policy through, come what may to future generations. In view of this recognition, the NSP, on behalf of the people, demands the government’s attention on the following points:

* We insist that the government co-fund the premiums for the compulsory national annuity. The amount of co-funding from the government must be no less than half the sum of the premiums, and the government must do so without raising taxes in fulfilment of their basic social responsibility as caretaker of society.

* The policy must have the provision which allows people (policy holders) the right to recover their entire co-paid portion of their core premiums should they pass away before the first payout kicks in at the stipulated effective age (e.g., 85). Under the circumstance, the government’s co-paid portion is retained in the pool of funds. This provision allow for the possibility of policy holders passing on something to their heirs.

* In place of the private sector, we assert that a public state body should instead be formed to handle the annuity policy. Unlike private firms, the gains and dividends from the pool of funds of annuity policy holders are not diverted to private benefits and hence contained within this public body, allowing the benefits to be channelled back to people. There is no sensible reason why private entities should gain from a profitable undertaking at the expense of the people’s retirement fund.

The government might think that losing one’s retirement money to a bad scheme constitute a part of the “major accomplishments” for Singapore. The NSP would like to sensibilise the government that the people are not getting a “bargain” from the scheme.

Central Executive Council
National Solidarity Party

1 comment:

Anonymous said...

"believe that there are better and fairer alternatives which do not unfairly dispossess people of their life savings."

so wat r the alternatives/solutions to this seemingly unpopulary policy?