Say No to Compulsory Annuities

Please sign the online petition against Compulsory Annuity here.

There are many angles and perspectives to look at this compulsory annuity issue. One of the most direct criticism I have seen on the internet is that if the government is able to provide life long pensions for its PAP ministers, why would other civil servants be deprived of that? Or to extend the argument, if the government could afford such expensive pensions for ministers (some are getting both ministerial pay as well as pensions at the same time!), why couldn't it provide for those who have lived beyond 85 years old?

During the 2006 General Elections, I have made retirement financing one of my main campaigning issue and I have urged the PAP government to increase the interest return to CPF since they have claimed to make extraordinary return on GIC and Temersak Holdings investment. The extremely low return on CPF will cause a big problem in retirement financing in a rapidly aging population.

At first look, when Prime Minister Lee talks about increasing interest return to CPF, I thought finally PAP has responded to the urgent need of solving this time bomb. However, the subsequent revelations on the details is a big disappointment. It seems that the PAP government has decided to wash its hands off from taking care of our aging population. First of all, it seems that the increase of 1% is only for a limited $60K in special accounts and for the other funds in the CPF, it will face fluctuations which would naturally be facing a lower interests return. The truth is, nobody knows the net effect on the CPF.Most probably, they will give you some, but take back more. This is the most predictable methodology of PAP government.

Thus, my hope that the crucial part of solving retirement financing will not materialize at all. In return, PAP government come up with the Compulsory Annuity scheme which is in effect, a way of shifting the burden of social welfare in taking care of a rapid aging population to the citizens. Of course, they will "package" it as sweet as it could. The propaganda is on, showing many people are old and having long life. But they did not show you the statistics: only less than 1 in 4 or 5 (this is a very optimistic estimate) will live beyond 85 years old.

The first question I want to ask the PAP government, is there anything wrong to ask the government to take care of our aged? Why is the PAP government trying to wash its hands off such social responsibilities?

The second question is this: Since the PAP government has benefited most from the cheap funding provided by the citizens' compulsory savings (CPF), which in turn created a low return and deficiency for citizens' retirement funds, shouldn't it be a MORAL responsibility to make up for such contributions by the citizens by taking care of them when they live beyond 85?

I have never come across a World Class Government that would be so stingy in spending on its citizens. CPF has been used to lower government's subsidies in Healthcare and public housing (oh, please, stop the crap about "market subsidies"!). And now, here again, they are forcing citizens to take care of the aged so that they could wash their hands off from a potentially high social spending!

I have no problem if citizens like to buy annuities which have low expected returns. But to make it "Compulsory" is really taking a step too far off. Imagine if anyone of us know that we have cancer or some terminal illness that would not allow us to live beyond 60, least 85 years old, would it be logical to force us to buy the annuity that we know we would not be benefiting from it at all? Put it simply, if you want to buy an insurance policy, the insurance company has the right to demand a medical report on you or even refuse to sell you the insurance if they have found out that you have high medical risk! On what rational should the government force an annuity down our throat?

The last question I have for PAP government, why didn't it bring up such "brilliant" policy up as their main election campaign issue back in 2006? It is really unbelievable that they have kept TWO "brilliant" policies (increase GST to 7% to help poor and compulsory annuity) from voters!

I believe that Singaporeans are generally very peace loving people but I think PAP government should not take Singaporeans for granted. The social contract is very simple, take care of Singaporeans and we could do with less democracy, rights or others. But if touch on OUR MONEY and force us to buy something that we may not want, then I think Singaporeans will not be that forgiving nor forgetful in the coming General Elections.

There are many technicalities involved in annuity scheme which I would reserve for future postings as the final details on PAP's master plan of shifting the social burden of taking care of the aging population are not out yet. But the key message is simple, PAP government has the SOCIAL as well as MORAL responsibilities in taking care of our aged. And it is totally illogical to FORCE us to buy anything against our will with our own money or share the whole responsibilities of government in taking care of the aged.

Goh Meng Seng