Excerpts from Straits Times:
SINGAPOREANS are at the bottom of a ranking of retirement income from pensions in the Asia-Pacific region, says the Organisation for Economic Cooperation and Development (OECD).
And this is true at all income levels, according to the study, which covered 19 locations including Hong Kong, Taipei and Japan, The Business Times reported on Friday.
The Pensions at a Glance study, which also involved the World Bank, found that Singapore’s average gross replacement rate – the value of the pension as a percentage of earnings when working – is just 13.1 per cent.
Taipei has the highest gross replacement rate of 70 per cent, the report said.
‘This means that the gross pension income for average earners in Taipei is over two-thirds of their previous earnings level, whereas pensioners in Singapore receive less than one-seventh the amount of their earnings,’ says the study.
Singapore’s pension is provided by the Central Provident Fund (CPF).
See OECD’s report here.
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‘Singapore’s pension is provided by the Central Provident Fund (CPF).’
this last sentence in the above report is WRONG! singapore’s pension is provided by the savings of the worker himself/herself, not by the CPF. and it is not all that can be taken back during his life time.
I’m not surprised.
Firstly, CPF (which redbean pointed out is employee’s own savings plus employer’s contributions with only a wee bit top-ups by our beloved gahmen) is used for non-retirement related purposes:
a) Housing
b) Medical
c) Education
It’s has moved far away from its original purpose of providing retirement income for workers.
Secondly, the gahmen’s use of CPF rate cuts as a means to reduce wage costs for businesses during economic downturns have also reduced CPF even for those whose jobs were “saved” by the foresight of the gahmen.
Thirdly, gahmen has introduced income caps progressively for higher income earners, currently $4,500 monthly income. So employers don’t have to contribute CPF for ordinary wages exceeding $4,500.
Bottom line, if you are depending on your CPF as the ONLY means of retirement funding, you’d need to seriously downgrade your lifestyle when you retire. But then, now PM Lee is encouraging us to work till we reach the status of MM type of position in our organisations, of course, at much much lower wage levels.
Poorest pensioners in Asia…..another world class statistic we have again due to the efforts of our world class elite ministers.
I urge all Singaporeans to please wake up!
The rot has to stop.
It is not surprising that S’poreans ranked last in terms of retirement income from pensions in the Asia-Pacific.
We have been screwed by the the cut in employer CPF contribution rate, which was not fully restored even when we were in what LKY called a “golden era”. Singapoor-eans have to make do with the crappy CPF system whilst our highly paid mini-stars enjoy tax-payers funded pension from age 55!!!
the only retirement qualifications
is only granted to exMINISTERs who used whatever terms they called it
2 terms/3 term blah blah blah
most of the workin class civil servants no longer have pensions
if you all have notice
an ex-poor saf major have to take the treasuries to court
not court the cabinet seller) for him to get his belated overdued 1 time payment pension……
our cpf is not a pensions
is OUR money
even that
we cannot have it intact………
Oh dear!
As Redbean and Panzer have pointed out, in Singapore, WHERE GOT PENSION !
Apart from a minority who are still under old pension scheme, we only have our CPF to rely on.
I read somewhere that MM and SM, are also getting large pension, in addition to their MM and SM pays… interesting… Can anyone confirm….
No no no, OECD has it all wrong.
The CPF is used as a source of cheap financing for Temasek Holdings and GIC to enrich the reserves of the Govt of the day.
At the end of the day, the CPF is used to subsidise the salaries of workers in Temasek holdings and GIC, when they claim that they have earned XX percent on their investments.
These reserves never ever go back to the retirees. Where got? WE never allow the reserves to serve the people, only the people employed in GIC and Temasek.
OECD got it all wrong.
much of the people’s money have been “invested’ to make singapore looking “first class” or to make our elites look “successful”.
the successful are actually living at the expense of the not so successful – no shame really.
call it whatever name you want but some will say this is….EVIL planning.
I retired recently and my monthy annuity payment bought with my CPF money is only $348 per month. How to survive with this amount in SIN today. Lucky, I have my other savings and insurance money to depend on at least for the present moment. But how long it will last will depend on how long more can I live.
No wonder, we are ranked the lowest.
Based on the fact that the govt doesn’t give a pension, shouldn’t our rate by 0%?
But whatever the case, the PAP will come out and say “At least you’re not like Myanmar, Somalia, Nigeria…etc. So be thankful.”
“I retired recently and my monthy annuity payment bought with my CPF money is only $348 per month.”
Do not worry. Just wait for awhile and you may start to get top-class explanation from those fire-fighters telling you that this $348/- is defintely enough.
This same team of fire-fighers may also explain it to you why $50,000/- per month for those high flying creatures is not enough but $150,000/- + per month is with pension to go by also if they reach a certain age limit.
Singaporeans have been told half-truths, led by the nose and hit on the head by the government they voted for. Now the truth is out that we are ranked the lowest for retirement income.
The only solution is to VOTE OUT THE PAP government in the next coming election. Unless some of the PAP ministers are voted out, they will still lead you by the nose and take out for a ride. Many promises will be made to citizens but at the end you get nothing but empty promises.
aiyoyo
own hard work $ still need to be managed by ELITEs, why like that huh?
cant we manage ourselves?
not sure the logic leh…
aiyoyo
There are no qualified Retirement Planners available in Singapore. Retirement planning is done by half past six insurance agents and so called wealth managers who masqueraded as retirement planners. In US retirement planner is a specialist..They are certified and they are required to pass subjects like investment, financial planning, estate planning, and to know all the retirement saving schemes like 401k, keogh etc.
In Singapore the agents are screwed up salespeople at the best. What do they know about investment and financial and retirement planning?. What they passed is only good to get a license to cheat and bullshit. They, the insurance agents screwed up CPF members’ balance since 2001 and till today their accounts are reeling from heavy losses. Only about 17% of the accounts are earning ABOVE 2.5% rate of return. How many really earned decent return above the 2.5% ,there is no info. The truth is the insurance agents are planning their own retirement by selling expensive funds, charging high expenses to the funds and rubbish insurance single premium endowments that give marginally above 2.5%. In some cases, shocking to know, that insurance agents made CPF members use their SA account to invest in endowments that pay a projected return a fraction of a percentage higher than CPF and taking a lot of risk that they might not get what CPF gives.No wonder someone mentioned that it is better to leave it in CPF and get to see it every month.
It was timely that CPF imposed the $60K restriction on smrt accounts otherwise they would have gone up in smoke. Hopefully the time will come when CPF will realise and their eyes opened and big enough to see that it is safer to stop the insurance agents from touching CPF members’ account and revive the idea of private pension fund.
MAS should regulate and impose a minimum qualification for adviser s who can advise on this area. especailly the CPF account.
wow st say CPF is our pension?
wow, like this no can cut cpf or not can can?
I tot sg very the financial financial wan?
can u smell your retirement already?
i dun mean KFC or McDonalds aroma hor.
OECD is wrong, when I look at my Cpf statement every month, I will feel rich and happy and I should thank Pap govt for this happiness due to golden era, more good years, swisss standard of living. Pap is the best party to govt Spore. One party rule is good for Spore. We all are very very rich!! No beggars in Spore , no poor people !!! Nia Mah!!!!
”
much of the people’s money have been “invested’ to make singapore looking “first class” or to make our elites look “successful”.”
do you refer to this headline? “Temasek’s Merrill losses could exceed $2bn ”
look stupid or look successful? lol.
17) kenna boinked by looooongi ba lookoo on January 9th, 2009 7.34 pm
“what does this ranking mean to commoners and layman like me?”
This means that you better be prepared to work till you die and pray very hard that you have a quick death from the stress of working and don’t fall sick instead.
Your children won’t be able to help you much at all if they are paying for expensive pigeon holes that in turn will suck up their own retirement funds.
Unless of course they themselves make it and become elites, then maybe they might be able to bring you to Paris for cooking lessons.
actually OECD is right. singapore’s pension is provided by CPF.
OECD has cleverly seen thru the smoke screen that when singaporeans make deposits into CPF, their money has really passed out from their hands. in reality, it doesn’t belong to the depositors, but the CPF board.
21) pigscanfly on January 9th, 2009 10.27 pm
how can u say like that when the majority people do not mind the current cpf system ?
get what i mean?
agree with #8 agree
pap is the the ‘madoff of asia’, orchestrating greatest ponzi scheme
they are good at robbing peter (own citizens) to pay pauk (their own salary & stupid investments)
wake for fellow citizens……the cpf is not yours but pap cheap funding….
Pension?Retirement?These are alien things in Singapore.
I had a rude awakening this morning reading the Shitty Times. It appears that PM assisted by his advertising media is telling us not to retire(like his father? Therefore why talk about pension.Work until you drop dead on the job.
ARE WE ROBOTS?
I asked the old woman selling tissue paper today why she is selling. She said no money. I asked her what about her children. She said they are unfilial, left her to find for herself. Then I remembered sometime back about all the brohuha that the children should support the old folks. The reality is – sometimes you get bad children like the tiisue paper seller’s kids. It is the duty of the state to ensure the old folks have a miniumum sum of money to live on, eat at hawker centre but no at restaurants, cook in their kitchen but not in Paris, to survive WITHOUT HAVING TO WORK if they choose to.
I think the problem with CPF is not just due to the employer contribution cuts and the withdrawal for other purposes. IMHO, CPF is a cheap source of funds for the Temasek and GIC to anyhow invest. According to past news, these govt-investments supposedly bring back 18% p.a. returns to our treasury. Yet CPF contributors only get a miserly 2.5% p.a. (for OA) or 4% (cannot see $ SA or RA) which cannot even match the inflation rate e.g. typical 3% to last year’s 7%.
So Singaporeans contributing to CPF provides the govt with cheap funding, only to see it shrinking in “real value” (i.e. purchasing power). Is it any surprise why people try whatever means they can to get the CPF $ out, even if it lands into poor investments? IMHO, one benefit of giving up one’s Singaporean citizenship is getting back one’s hard-earned CPF $.
In addition, the 2.5% p.a. and the 4% p.a. CPF returns are set to be changed again (likely reduce due to the floating rate in poor economic conditions) in 2010. See http://mycpf.cpf.gov.sg/Members/Gen-Info/Int-Rates/Int-Rates.htm for details.
singaporeans should expect world record performance .
i urge that this ranking be improved, pronto.
who say singpore has one of the lowest personal tax rate in the world?
cpf is a form of implicit personal tax!
our effective tax rate = your personal tax rates + cpf % (cap at 4.5k)!!
the $$ locked in there is as good as sunk cost, we can only expect meagre return in the form of monthly withdrawal & most prob you will die before drawing all $$$
i m pretty confidence that once the cpf annuity pool is formalised, you can expect upon death, the $$$ will not be part of your estate BUT TO GO BACK TO CPF POOL TO FUND THE OTHERS STILL ALIVE…
na beh….
#25. “Then I remembered sometime back about all the brohuha that the children should support the old folks.”
It is becoming like a dog-eat-dog society. How to support old folks if own children folks also got problems on their own lah.
If children folks are capable & talented ones & filial, stil ok lah. What if children not so capable ones like those having many many problems and they also have to compete in the low-income kind of work where you can easily replace them with equally low-cost foreign type because employers must also survive also and earn money.
Low cost children folks and employers also got to earn more money for what. To survive lah and to pay TAX lah. A lot of people will always be confused what is hitting them lah if they keep on believing excuses as good reasons lah.
I am not a member of SDP nor any opposition party.
And I don’t work and live in Singapore though I am borned in KK hospital in Singapore, that is, born singaporean.
You will find in this book the public savings and how our CPF has been cut and divided by many different purposes but primarily deviate from its original purposes. One main usage is the highly priced HDB flat which a lot of Singaporeans thought (and still thought) was highly subsidised.
It explains why we were with lowest retirement fund to depend upon.
Actually, we don’t have pension to a certain sense. All these are our part of our total compensation package, ie, remuneration, over the span of our working period.
18) Tew NS on January 9th, 2009 7.54 pm
OECD is wrong, when I look at my Cpf statement every month, I will feel rich and happy and I should thank Pap govt for this happiness due to golden era, more good years, swisss standard of living. Pap is the best party to govt Spore. One party rule is good for Spore. We all are very very rich!! No beggars in Spore , no poor people !!! Nia Mah!!!!
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i agree with both hands and legs.
no wonder they are paid the highest salary for politicians in the entire world , past and present. i suspect the future also.
sg’reans so lucky.
#31) seah suay lian in resort on January 11th, 2009 9.43 am
#18) Tew NS on January 9th, 2009 7.54 pm
Actually Singaporeans are the richest people on earth if the Republic is voluntary dissolved and our foreign reserves are distributed to every citizen.
We have the highest reserves per capita in the world because over the past 49 years of PAP’s rule the govt has siphoned off a big portion of our wages and lock them up in the CPF which was also a source of cheap fund for the govt to use for national and for comercial purposes. (This ‘cheap fund’ term was acknowledged by one green-horned PAP candidate during the 2006 GE but was told to withdraw the statement.)
Another trick the govt used to soak up your excess CPF fund is to raise the prices of HDB flats so that you cannot be too rich or else you cannot be easily controlled. If those bankrupt opposition party members and critics have plenty of money the PAP would be in trouble. Of course if you serve them well you will be highly rewarded.
It is very sad that Singapore is ranked the lowest among the Asian Pacific nations.
Singapore’s CPF system used to be a shining example of what a good provident fund should be. At one time, the contribution rate was 50 percent. Many Singaporeans were supposed to have a hefty sum on retirement at age 55.
Today, the savings at 55 or 62 is not adequate. We are even ranked the lowest among the countries.
Lesson? We need to have a new approach. The CPF system was created 50 years ago, and had been following just one direction. Although there were some discussions about how to make a change, the outcome is usually the same. The basic structure remained the same. With unfavourable trends, it has now become a sad example of inadequate savings.
Not surpirsing, majoritiries are getting a 3rd world salary,competed with huge cheap labours. Just walk around heartlander or Library, guys u will know how many truely born singaporeans are out of jobs. Government claimed they have created plenty of jobs. But then suddenly we got 1.2mils++ cheap foreign labours flooded here (if included S-Pass & SP guess around 2mils++, sad to say, 3rd salary to sustain with high cost of living (after deducted transport, utilities – singapore ranked 2nd high charge after Londan, S&C, insurances, CPF, phone bill, children and old parents left what to retire – no wonder singaporeans are the world lower saving nation left nothing for retirement so work till die if still able body but suject to employers want.) Shame on them demanded world highest salary but majories singaporeans are still getting extremely low wages, no job, can’t retire, wait to die, then now most of the resale HDB are taken by PR (can’t imaging another 5 years).
with pap as king, migration is key