Dear Sir,
I am a researcher working in National Taiwan University. I am working on a project analysing impacts of pension integration in East Asia. I just found your blog article entitled "civil servants and pension scheme" (24/4/2001). This is the only article I have found so far discussing this issue.
Here are his questions and my answers.
1.What's the rationale behind the Singapore government's decision to merge civil servants pension scheme into CPF in 1973?
The government wanted every worker, including civil servants, to join the CPF scheme. They can use their CPF savings to purchase a house and to be used for medical treatment and other approved purposes.
Although they did not expressly state this reason, I personally guess that they did not like to have the unknown liability of paying pensions for a lifetime, when life expectancy is improving. They also did not like the liability of lifetime medical benefits which were provided to all civil servants at that time. When the civil servants convert to the CPF scheme, they lose their right to the lifetime medical benefits.
2.How did the government convince civil servants to accept the change? Had there been any substantial resistance?
If I remembered correctly, the government gave generous terms of conversion. Many civil servants found the CPF scheme to be more attractive. This option was given to the civil servants who joined prior to the cutoff date. Civil servants recruited after the cutoff date were given CPF benefits. They did not have the option of getting a pension.
3.Does the change has any impact on the recruitment, retaining, morale and performance of public sector workers?
The government pays the top civil servants extremely well. There was no problem in recruiting people into these top layers. For the lower levels, they were generally quite happy to receive the CPF benefits, as they perceived that they could get a lump sum at age 55. However, the government has now implemented a hold back a large portion of the CPF savings until age 65 and later. This deferral of the withdrawal of CPF savings is extremely unpopular. But it applies to all workers, and not just the civil servants.
4.How did people in general saw the change? Did they support or oppose the change?
Many workers are now unhappy with the CPF scheme as the interest rate is quite low, at 2.5% on the ordinary account and 4% on the other accounts and they have to keep a large part of the CPF savings to be withdrawn as a life annuity. Many of them prefer to take out their CPF savings at age 55, as they need to use it for other purposes.
Note - I am giving my views out of memory. So, I could make some mistakes.
I am a researcher working in National Taiwan University. I am working on a project analysing impacts of pension integration in East Asia. I just found your blog article entitled "civil servants and pension scheme" (24/4/2001). This is the only article I have found so far discussing this issue.
Here are his questions and my answers.
1.What's the rationale behind the Singapore government's decision to merge civil servants pension scheme into CPF in 1973?
The government wanted every worker, including civil servants, to join the CPF scheme. They can use their CPF savings to purchase a house and to be used for medical treatment and other approved purposes.
Although they did not expressly state this reason, I personally guess that they did not like to have the unknown liability of paying pensions for a lifetime, when life expectancy is improving. They also did not like the liability of lifetime medical benefits which were provided to all civil servants at that time. When the civil servants convert to the CPF scheme, they lose their right to the lifetime medical benefits.
2.How did the government convince civil servants to accept the change? Had there been any substantial resistance?
If I remembered correctly, the government gave generous terms of conversion. Many civil servants found the CPF scheme to be more attractive. This option was given to the civil servants who joined prior to the cutoff date. Civil servants recruited after the cutoff date were given CPF benefits. They did not have the option of getting a pension.
3.Does the change has any impact on the recruitment, retaining, morale and performance of public sector workers?
The government pays the top civil servants extremely well. There was no problem in recruiting people into these top layers. For the lower levels, they were generally quite happy to receive the CPF benefits, as they perceived that they could get a lump sum at age 55. However, the government has now implemented a hold back a large portion of the CPF savings until age 65 and later. This deferral of the withdrawal of CPF savings is extremely unpopular. But it applies to all workers, and not just the civil servants.
4.How did people in general saw the change? Did they support or oppose the change?
Many workers are now unhappy with the CPF scheme as the interest rate is quite low, at 2.5% on the ordinary account and 4% on the other accounts and they have to keep a large part of the CPF savings to be withdrawn as a life annuity. Many of them prefer to take out their CPF savings at age 55, as they need to use it for other purposes.
Note - I am giving my views out of memory. So, I could make some mistakes.
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