Government may make buying annuity compulsory
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When wealth is lost, nothing is lost,
When health is lost, something is lost,
When character is lost, all is lost.
Billy Graham -
REad this quite long ago. I like the it. How true.Originally posted by Daddy!!:When wealth is lost, nothing is lost,
When health is lost, something is lost,
When character is lost, all is lost.
Billy Graham -
May be they will be allowed to bring over, they must be thinking they go there with lots of money hoping to continue to be MM, PM, DPM and so on.Originally posted by drawer:This fuking PAP leaders only think about money n nothing else.As if after their death,they can bring their money to the afterlife world......Dream on man. -
Hell will be better managed then...Originally posted by qlqq9:May be they will be allowed to bring over, they must be thinking they go there with lots of money hoping to continue to be MM, PM, DPM and so on.
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Oh no. Then if I have the chance I will tell those residing there to start saving now. When they take over, these people will have a choice to migrate elsewhere. ha haOriginally posted by HyperFocal:Hell will be better managed then... 
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Government may make buying annuity compulsory: Lim Boon Heng
By Julia Ng, Channel NewsAsia | Posted: 14 August 2007 1745 hrs
SINGAPORE : The government may make buying annuity compulsory, said Mr Lim Boon Heng, Minister-in-Charge of ageing issues.
Speaking to reporters after a National Day Observance ceremony at the Mitsuboshi Overseas Headquarters on Tuesday, Mr Lim said the government is looking to build the annuity component into Singapore's plan for the ageing population.
With longer life expectancy, Singaporeans will have to work longer, beyond the present retirement age of 62.
The government is considering a law on re-employment, to get employers to guarantee their employees a job once they reach 62.
But it may not necessarily be the same job or the same salary.
Mr Lim urged employers and employees to start preparing for the re-employment law as soon as possible.
This is because the law would provide only a framework and not spell out how re-employment should be done.
Besides working longer, another way to prepare for old age is to have a form of insurance that caters to a longer lifespan.
And one way to do this is by buying an annuity.
Said Mr Lim: "If you have a full minimum sum in CPF, when you withdraw the CPF, CPF will pay you $700 over a month. But it's for 20 years. At the end of 20 years, you'll have nothing to withdraw.
"If you buy an annuity, the insurance company will pay you less - $500 a month. But the insurance company will have to pay you for as long as you live. And if you live to 100 (years old), they'll have to continue paying you till you're 100. Therefore it's a lesser monthly sum but you're insured a little longer.
"We may have to make it compulsory for everyone, but I think for now, we should explain to people what annuities are and how people can benefit, to get people to understand it." - CNA /ls -
I wonder this what this consultant would think, if he knows the annuity that we are going to be forced to buy is like the one Lim boon Heng said.
Annuities: It's risk-sharing among all
By Christopher Tan | Posted: 31 August 2007 0728 hrs
Over the past week, every newspaper and financial periodical in town has been talking about one thing: The changes in the Central Provident Fund (CPF) and, in particular, the introduction of the compulsory annuities scheme.
The gist of the scheme is: To ensure that payouts from the Minimum Sum last throughout the life expectancy of CPF members, the Government has recently proposed delaying the Minimum Sum draw-down age progressively from 62 to 65.
To give a stream of life-long income to those who may live beyond 85, the Government is also planning to set aside a sum of money from each individual's minimum sum to buy into a compulsory annuity for all CPF members. If one dies before age 85, the amount goes into the pool and the payouts for those who are still living.
Then the unhappiness arrived, in all forms — articles, commentaries, forums, online chat, and so on. Singaporeans felt they have been denied the choice of deciding whether they want to buy the annuity, or leave the money in their CPF to pass on to their loved ones if they die early. It is their own money, after all.
As I read the remarks and sensed the unhappiness of fellow Singaporeans, I thought for a really long time to try and see what was wrong with this scheme.
The intentions of the scheme are clear. Singaporeans are ageing and we are living longer. A large proportion of Singaporeans, especially the poorer and less educated ones, may not know how to plan for themselves, and could invest unwisely. And although financial awareness talks are being organised to help people understand the importance of planning, many people may still not do it well. They could run out of money. The annuities scheme will at least provide them with subsistence living. Otherwise, the Government will have to take care of them with taxpayers' money. This means less tax money for other important areas such as infrastructure, defence, education and so on. Poverty may also create social problems. The overall effect for all of us will be bad.
As chief executive of an independent private wealth management firm that serves top-end, affluent and high-net-worth individuals, as well as a trainer and consultant in retirement planning to the general masses, I meet people from all walks of life. As I speak to hundreds of retirees each month, I know that most are not financially ready for retirement. The people who are really ready are those like our clients — who are wealthy and have sufficient income, and wealth, to plan for themselves.
I scrutinised the scheme for a long while and my conclusion is that this is indeed a well thought-out programme. Based on our calculation, CPF members may only need to set aside $4,000 to $7,000 from the minimum sum for the compulsory annuity. This is a very small amount relative to the current minimum sum of $99,600 or $120,000 in 2013. Thus, the monthly drawdown from the minimum sum from age 65 will not be greatly reduced. If the CPF Board manages this annuity, it is likely to do better than an insurance company as it has the economies of scale and lower expenses.
So what exactly are we unhappy with? After much thinking, I concluded that it is due to a matter of perception, lack of knowledge and discontentment.
Singaporeans are unhappy because we feel that the Government is often high-handed. In this case, we feel that the Government has already decided on forcing everyone to participate in a scheme that does not give us flexibility to do what we want with our own money.
In Singapore, once an intention is announced, feedback sessions and consultations are perceived as mere motions — the belief is that it will be implemented anyway. Whether this is a fact or perception remains to be debated. Even good policies will be rejected once such a perception is formed.
The unhappiness is also partly caused by lack of knowledge. Many do not understand how the scheme works. As an example, many may not know that the estimated monthly payout amount at age 85 from the annuity scheme would probably have taken into consideration the number of those who may not have lived to that age, and have contributed their share into the pool. This probably explains why many doubt whether those who survive beyond age 85 will benefit.
There are comments that the Government is looking to benefit itself financially. But many do not understand that the Government is not a private enterprise. It is like a trustee to a pool of funds of which every Singaporean is a beneficiary.
Finally, the greatest cause of unhappiness is discontentment. Humans, including myself, are a discontented lot. -
http://www.channelnewsasia.com/stories/singaporebusinessnews/view/295348/1/.html
Said a group manager from Great Eastern Life: "This compulsory scheme is a chance for insurance companies to 'wake up their ideas'. Annuities are big in the west, but have never taken off in Singapore. The returns on annuities are now averaging just 2.3 per cent... The take-up was poor. Companies should now take advantage of the upcoming demand for annuities and come up with good products with better returns, say, 5 per cent." -
Sooner or later, Singaporeans r gonna grow sick of this system n get their butts off e chairs n start protesting. Which will most probably be e starting of e end as e country crashes n fades into obscurity.
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Is the govt turning its back on its people? Boasts of 18% p.a. returns by Temasek over the last 30 years but unwilling to spend 0.044% of the returns from the $200 billion reserves on its elderly.
From Sg_Review:
Kaye Poh wrote:
22 Aug 2007
Further to my email below, with stats taken from the government website:
As of 2006, there were 8,300 males and 16,300 females (24,600) above 85 years old out of a total of 3,608,400 Singaporeans (about 0.7% of Singaporeans are above 85 years old). Source: http://www.singstat.gov.sg/pubn/reference/yos/statsT-demography.pdf.
Using the upper end of the expected annuity payout (S$300 per month) upon reaching the age of 85, these 24,600 who live beyond 85 years old are expected to withdraw some S$88,560,000 per year from the annuity pool.
Putting this $88m in perspective, all the government needs is to earn 0.044% p.a on its estimated $200 billion in reserves to finance this group of octogenarians. Compare this minuscule 0.044% with the reported 18% p.a. returns by Temasek over the last 30 years.
Can the government afford to do it for its needy elderly citizens? Definitely. But will it? No!