CPF RAT­ING: NEEDS IM­PROVE­MENT

Singapore Business Review - - FIRST -

Sin­ga­pore’s pen­sion sys­tem is the best in Asia, ac­cord­ing to the ninth edi­tion of the Mel­bourne Mercer Global Pen­sion In­dex re­leased in Oc­to­ber. It scored a B rat­ing with an over­all in­dex value of 69.4, ris­ing 2.4 points from 2016. The city-state beat out China which had an over­all in­dex value of 46.5, In­dia (44.9), In­done­sia (49.9), Ja­pan (43.5), and Korea (47.1), which are the five other Asian na­tions cov­ered by the in­dex.

De­spite its stel­lar rat­ing, the Sin­ga­pore pen­sion sys­tem still needs some im­prove­ment, said Garry Hawker, Asia zone wealth busi­ness co­or­di­na­tor, di­rec­tor of strate­gic re­search, growth mar­kets at Mercer. “As one of the most de­vel­oped pen­sion schemes in Asia, Sin­ga­pore has con­tin­ued to make im­prove­ments through CPF in pro­vid­ing more flex­i­bil­ity to its mem­bers,” he said. “The over­all in­dex value for the Sin­ga­porean sys­tem could be fur­ther in­creased by re­duc­ing the bar­ri­ers to es­tab­lish­ing tax-ap­proved group cor­po­rate re­tire­ment plans; open­ing CPF to non-res­i­dents who com­prise more than one-third of the labour force; and in­creas­ing the labour force par­tic­i­pa­tion rate at older ages as life ex­pectan­cies rise,” Hawker noted. Sin­ga­pore scored high­est in the in­tegrity sub-in­dex at 80.7.

Quest for sus­tain­abil­ity

Glob­ally, Sin­ga­pore ranked sev­enth out of the 30 coun­tries cov­ered by the in­dex. Den­mark topped the rank­ings for the sixth straight year. Jacques Goulet, pres­i­dent of health and wealth at Mercer, stressed that coun­tries should ad­dress sus­tain­abil­ity when con­sid­er­ing pen­sion re­form. “in­creas­ing life ex­pectan­cies and low in­vest­ment re­turns are hav­ing sig­nif­i­cant long-term im­pacts on the abil­ity of many sys­tems around the world to de­liver ad­e­quate re­tire­ment ben­e­fits both now and into the fu­ture,” Goulet said. “These pres­sures have alerted pol­i­cy­mak­ers to the grow­ing im­por­tance of in­ter­gen­er­a­tional eq­uity is­sues.”

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