Media Relations Division, Ministry of Information,
Communications and the Arts,
Tel: 6837-9666
TRANSCRIPT OF
PRIME MINISTER LEE HSIEN LOONG’S
NATIONAL DAY
RALLY ENGLISH SPEECH ON
AT NUS
UNIVERSITY CULTURAL CENTRE
City of
Introduction
Friends and fellow Singaporeans,
Asean countries benefit from a strong
Singaporeans are all over
To do that, we have to adapt and change. Not just once, but again and
again as the world around us changes. We
have to change to make our economy more vibrant and competitive, which is what
we have been doing, restructuring the economy, reforming the taxes, lowering
income taxes, pushing up GST, developing the Integrated Resorts, remaking our
city – all to make Singapore grow. We
need changes to strengthen our social cohesion, to draw us closer together
despite the tidal pull of external forces which threaten to pull us apart along
race and religion, along rich and poor, between winners and losers. We must
never let this happen. If we can stay
together, then we make
Income Gap – leaving no one behind
Tonight, I will focus on one major challenge for
So, the premium on education has gone up sharply. Somebody did a study in
So, the result is winner takes all. The top incomes are zooming up, and
the gap between the top and the second highest incomes is widening. So, it’s not just between the top and the
middle but even at the top, it’s stretching out. Tiger Woods earns US$100
million a year -- prizes and endorsements.
The Number Two player in the world -- most people here won’t know who’s
the Number Two player in the world, which is the point -- he’s Jim Furyk. He earns much less. And the Number Two earner
in the world, who’s Phil Mickleson, he earns about half of Tiger Woods. So, even at the top, between Number One and Number
Two, the gap widens -- the best and the rest.
So, at the bottom, in the middle, at the top, incomes are stretching out,
but there’s one more reason why income gap worries us and that is the ageing
population. Many of the poor people are
likely to be elderly and even working people who are not poor, if they’ve not
provided enough for their old age, when they retire and they have no source of
income, when their savings run out, they will become poor and will face
difficulties.
So, this is what’s happening to us.
It’s happening all over the world to developed economies. What can we do about it? The first overall strategy is to grow our
economy, generate the resources to tackle these problems to help those in
need. Without resources, you can talk,
you can sympathise, you can feel the pain, you can’t solve the problem. Ageing is a very difficult problem to solve. There are no easy solutions, but I’ll talk
about this later at length. For the
income distribution, at the lower end, we emphasize training, skills upgrading,
job redesign, so as to raise the productivity of low-income workers, get them
to be able to do better paying jobs, help them to earn more and this is what
NTUC is doing through job redesign. In
addition to this, we have programmes like Workfare where we transfer to the low
income, but not without conditions, as a hongbao. On
condition you work, you make the effort, well, I am prepared to match you and I
will help to top up your savings a little bit towards your take-home pay. If
you make the effort, we will help make your life better.
So, at the bottom we have a strategy.
At the top, it’s good that people are doing well. The incomes may look large, but we cannot
hold these incomes down. Nor can we levy higher income taxes to tax them away
because if you try to do that, particularly in a small and open country like
But although we can’t force the incomes down or tax them away, those who
have succeeded have to show that they care for their fellow citizens, for
example, through philanthropy. It’s
happening in the
So, Singaporeans have been making these donations, small ones and a few
big ones, too. Sometimes, we have
buildings and faculties named after the donors or after the foundations. So, we have the
In the middle of the income distribution, for the vast majority of
Singaporeans, our policies must enable them to do well and provide them with
many opportunities to move ahead along many paths. One major strategy is home ownership through the
HDB. It’s the best form of social
welfare for citizens because it gives every Singaporean a stake in
Upgrading Education – levelling up society
Another major strategy is education.
I told you just now how the payoff on education is going up and,
therefore, this is the best way to level up our society. Our aim is to give every child a top-rate education. Therefore, our emphasis is on the quality of
all our schools in
MOE has worked hard at this. I
would say they have given you four “more” things. First “more’ -- freedom for principals and
teachers to experiment. So, you can try
out new ideas. Second “more” -- resources
for schools with good ideas, so that if you succeed, well, we will help you
build on that success. Third “more” -- opportunities
for needy students through the Opportunity Funds. And fourth “more” is more learning, less
teaching.
When we first talked about more learning, less teaching, or teach less,
learn more, skeptics asked, “I’m sure you will teach less, are you sure they
will learn more?” But we can see it
happening now because there’s tremendous energy and enthusiasm in many schools.
I talked to Tharman, and I visited some of these schools recently to see for
myself. I’ll tell you about two of
them.
One is
Then, I went to a primary school,
The teachers are full of spirit and passion. They’re committed to teaching every
child. They have conviction and pride in
what they’re doing. How do I know? Because several of them have school-age
children and they’ve put their children into
They put up a full-scale musical, “Our Time To Shine”. I saw them rehearsing. I didn’t watch the musical, but Seng Han Tong
attended the musical just before National Day and he emailed me. It moved him to email me because I’ve said in
my message that we will have a new
Many more exciting things are happening in schools all over
Before I move on, I’d like to talk about just one aspect of our school
education and that is language skills.
Many older Singaporeans can understand and speak Malay and Bahasa
Indonesia, including many older non-Malays, but in the younger generation, there
are too few. It’s because we’ve made
English the lingua franca and don’t
live in kampongs. We live in HDB flats and our mingling is in English. But we need more people to be familiar with
the languages, maybe not totally fluent, but to chit-chat, and understand the
gist without translation. So, you can
“cakap-cakap”, a bit more advanced, “bual-bual”. If you’re in
We’re not changing our mother tongue policy, but we must encourage more non-Malays
to learn Malay in addition to their mother tongue. Therefore, we’re going to have two new initiatives
in our secondary schools. First, the
Malay Special Programme to study Malay as a third language. It’s there already in all the schools, but
it’s not very popular. So, we’re going
to introduce incentives to encourage more students to do the Malay Special
Programme. Singaporeans like incentives,
so we’re going to have small incentives -- two bonus points for JC admission
and a few more things. Similarly, we’ll have the incentives for non-Chinese
students who are doing the Chinese Special Programme, in other words, Chinese
as a third language, and hopefully, more non-Chinese will take that up,
too.
We will also introduce a Regional Studies Programme in a few secondary
schools, that means probably three or four of them; good schools. We will offer scholarships for this
programme, probably about 100 a year.
So, what will be in the Regional Studies Programme? First, the Malay Special Programme -- learn
Malay as a third language. Secondly, also learn about Southeast Asian
neighbours and you can have immersion visits, exchanges and so on. It would be good if one of the schools can
offer Bahasa Indonesia instead of Malay and from our preliminary soundings, it
looks like there will be one school which is interested.
Beyond the schools, we aim to get every student into post-secondary
education and as many as possible into tertiary institutions. We’ve invested very heavily in our ITE, in
our polytechnics, in our universities.
I’ve shown you some of the things they’ve been doing. I’ll give you a little more this evening. Because
of our investments, we’ve increased the intakes year by year and we’ve
increased the upgrading -- more students progressing from ITE to poly, more
students going from poly to university, more students going into the entire
post-secondary and tertiary sector. And
with good schools, more and more students want to go up and want to go to
university. So, this year, particularly,
if you’ve been reading the newspapers, you will see that many parents and many
students fretted about their university admission. They’ve got reasonable grades, maybe even
above average, but not quite good enough to get into the subjects in the
university which they wanted to. So, they
blamed it on dragon babies, but it’s not because of dragon babies. Firstly, the dragon was very small; secondly,
even with more dragon babies, we actually expanded the university intake more
than proportionately so that a bigger proportion go to university this year
than last year. But, of course, an even
bigger proportion wants to go, who couldn’t get into the places they want and
so, the anxieties are still there.
I think there are also many polytechnic graduates who hope to go on to get
degrees. Right now, about 15 per cent of
the poly graduates go on to NUS or NTU
or SMU and there are many more who are getting degrees by other routes,
including many who go abroad. Our
estimate is maybe half the poly students eventually get a degree, in fact, quite
soon after graduation and some of them go abroad because we don’t have enough
places in
We have to be careful because some countries have produced large numbers
of graduates without regard for either the quality or the employment
opportunities. Lots of universities,
some of them paper printing machines and so, they face big problems -- graduates
unemployed or under-employed. It’s
better not to have graduated but to have a good job than to have graduated with
a skill which is not useful and then you spend your time feeling unhappy.
Today, in
We may not limit ourselves to just one new institution. We could open more than one route. I’ve asked Lui Tuck Yew to chair a committee
to study how we can expand the university sector. I’ve also found him an adviser to the
committee, who is Dr Tony Tan, and we will decide within a year on the best way
to proceed. With these changes in our
schools and higher education, Singaporeans can look forward to more
opportunities to receiving a first-class education -- more pathways to
success.
Ageing Population – living active lives
Another factor in our widening income gap is our ageing population. We have one of the fastest ageing populations
in the world. Why? Reason number one - not
enough babies. I’m not discussing
this anymore tonight. Nike says, “Just
Do It”. But the second reason is
Singaporeans are living longer. I had a
conversation sometime ago with Father Michael Arro. He’s a Roman Catholic priest in the
So, I looked up some more statistics -- 90 and above, do you know how
many people? 9,000 in
The CNA programme, “The New Old”, also showed Professor Anne Wee, aged
81. She’s here with us this evening. I
invited her here because of something she said.
She says, “I describe myself as an OPWA -- an Old Person With
Attitude. I drive, I work, I go to see
students, I take care of my garden, my life, I’m fully alive to the
world”. And she said she aimed for a
rectangular life and she explained -- a happy and meaningful life for as long
as you live and when the time comes, let it be fast and painless. So, the aim is not to live forever but to
have a good life and a good death -- what the Hokkiens
in
The Japanese have the same philosophy.
They look for three major components of a happy life -- ample eating,
leisurely sleeping and a quick death
-- and they have special temples where people go to pray for this. It’s called “pokkuri dera” -- temples which bless longevity
and painless death and these “pokkuri
dera” are very popular in
What will
Sam Tan organized and just started a Project Golden Service because he
found all these old folks and wanted to help them to pick up skills, to do
something useful and earn some pocket money.
So, they did very interesting things – calligraphy, others doing
haircuts. This one, a very fancy ketupat
and the next one, two old ladies stitching quilts in their 70s. I asked them, “Where
do you do this?” They said, go down to the old folks centre, they speak Cantonese. So, I said, “You go down to sew the quilts?” So, they said, “No, no, we go down. First, we “keng-gai, keng-gai”, that
means chit-chat with our friends, socialize, then afterwards, we can sew a
quilt. They don’t really need to make
the quilt, but it’s something productive and useful for them to do
together.
I also met a few and talked with a few other ladies. Two of them are here. The one in the middle, this one in black and
red, is an old resident of mine from Teck Ghee.
I had helped her. So, when I went
down, she came down to say hello to me. She had had a rough time. She had been unwell,
she’d had back problems, spinal operation, wheelchair-bound. Then, when she moved to Radin Mas, she joined
a religious group, she made friends, chants and meditates daily, exercises,
regained her strength. Now, she’s walking
again with a walking stick, as you can see. But she’s active again and she
said, “I have something to look forward to, chatting with my friends, thinking
of new things to do, all the time getting stronger”. But she asked me one very sharp
question. She said, “My CPF runs out
this year. What happens after that?” She’s 68 years old. So, I told her “man man lei” -- slowly,
we are working on this problem, which we will talk about later.
The other lady, you will not believe, Madam Lee Siew Lan. How old is she? She’s 91.
She’s still working as a cleaner in Redhill Market. How did she get the job? She was friends with the hawkers, and hawkers
introduced her to the cleaning contractor.
So, courtesy of NTUC’s job redesign programme, proper equipment,
trolleys, garments and so on. So, she is
productive. So, she told us, she says --
she didn’t tell me this, she told Sam Tan this -- she says officially, she
earns $800, but actually, she moonlights a little bit, helping out hawkers cut
vegetables, jaga the stalls, and she’s fiercely independent. She says, “When people give me free things, I
don’t accept. Why, when I can afford to
pay? But if they say, “Okay, you’re a
friend, we give you a discount”, then I think okay, friends can accept kindness”. So, this is the spirit you want to, not just
in 91-year-olds, but in 51-year-olds and 31-year-olds and 21-year-olds, too.
I also met Madam Loke Tai Hoe, the samsui lady. She’s chatting here with Lui Tuck Yew, who
dressed to match! She came to
As Singaporeans grow older, we need to give them more help. In Radin Mas, the flats are fitted out for
elderly living. So, you have the panic
buttons and cables to call for help, flat floors, handle bars and so on and downstairs,
there’s a VWO. So, social workers and RC
volunteers will visit the old folks regularly, help them, look after them and
all the old folks are very grateful. So,
I talked to them individually and I asked them, “How do you manage?” and they
all said, “Tak Kao, Tak Kao” because many of them are Cantonese. So, “Tak Kao” is “De Jiao” (德教). It means “Thye
Hua Kwan Moral Society”, which is the VWO which is looking after them. So, it’s a tremendous sense of gratitude and
obligation and sense that somebody cares and is looking after them. I was very happy to see that they’re active,
healthy, cared for by the community, but I was also worried that more and more
elderly are living by themselves because the best solution is still the
family. Stay with your children or at
least have children staying nearby who can visit regularly and who can help you
with something if you need some help.
Radin Mas is a glimpse of our future.
All wards have senior citizens like this. In fact, Radin Mas is not the oldest
one. The oldest one is Kreta Ayer-Kim
Seng, Lily Neo’s ward in Jalan Besar GRC and it has one in four residents above
65. Now, by 2020, all of us will have
quite a lot more white hair and our whole society will have to make
adjustments. The Government is very seized
with this issue. Boon Heng is working on
it full-time. I talked about this
earlier in Chinese and covered several aspects, but there’s one more important
aspect, which is savings for old age.
REACH -- Amy Khor is now Chairman -- did a consultation exercise on
active ageing. They did many forums and
they got lots of feedback and she distilled it down and sent me the
report. Amongst all the different
feedback, two thorny issues consistently came up. One was employment opportunities for older
workers, in other words, working longer and, two, having sufficient funds for
old age and that means CPF savings and I want to focus on these issues
next.
Working Longer – more savings for old age
The best way to be alright in old age and to have enough savings is to
stay employed and to work longer because with longer life spans, you cannot
retire at 55 and live until 80 or 85 or 90.
As life spans go up, you have to work longer and then have not too long
a period of retirement at the end of your life.
Countries around the world, US,
We also have to make this adjustment.
We don’t expect Singaporeans all to work till their 80s and 90s, like
Madam Lee and Madam Loke, but to retire at 55 or even at 62 is too early. Lim Swee Say told us this story – he’s not
here tonight, he’s rushing home from America and his flights got disrupted
because of bad weather, so he sends his apologies, but he told us this story
and, like Jurong Secondary School, I made a little script out of it. So, I will read this. Lim Swee Say on a walkabout, he said, “I
talked to a resident at the market. He
was healthy-looking”. So, Lim Swee Say
says, “How old are you?” Resident says,
“72.” So, Lim Swee Say says, “Wow,
you’re looking healthy for your age. Are
you still working?” So, Resident says,
“No, I retired a long time ago when I was 55.”
So, Lim Swee Say says, “55! Why
did you retire so young?” and the Resident says, “Because I didn’t know I was
going to live so long!”
So, our challenge is how to get more people in their 60s working. I discussed this with the union leaders and
this is also their foremost concern, how to get more people working because
they tell me the workers themselves want to continue working and are putting
pressure on the union leaders to work out arrangements with the employers and I
think this is a tremendous plus, that they do want to work, but we need to
enable them to do this and to enable more of them to do this. But how do we do that? I think that in
Well, let me start about education, just briefly because I’ve talked a
lot about this before. We have to change
mindsets for both the employers and the workers. We’ve got to get the employers
to recognize the value of older workers, deploy them effectively and make the
most of their abilities and strengths. Enlightened employers are starting to do
this, like SBS Transit is hiring back some retired bus drivers as service mentors
to guide the new drivers. The workers
also have to adjust and they have to be prepared to change gears after 62, to accept
lower pay and lighter work, to accept lower appointments so that younger ones
can move up because otherwise, if you have the oldest ones at the most senior
jobs, then our whole system will be like a mountain with greyer and greyer hair
at the top of the mountain and that’s not the way to be full of dynamism and
vibrancy. So, companies like SingPower
-- they have Senior Technicians, they retire, they’re re-employed as Technicians,
so somebody else can be promoted to be Senior Technicians, can move up. So, education is the first step.
The second step is legislation, to send a clear signal to employers and
to the public and to the workers that we’re serious about this that this is a
major problem for us and we have to do something about it. People often ask, “Why don’t we just pass the
law, raise the retirement age? Just straightforward,
you just pass a law. What the Government
says will happen”. But our experience
shows us that what the Government says, if you say it unwisely, may not happen
and just raising the retirement age may not solve the problem and may even make
it worse.
Today, the legal retirement age is 62, but not everybody works till
62. Among the women, many have left the
workforce much earlier -- 30s and 40s when they had children; when they set up
their households, they dropped out of the workforce. Among the men, only two-thirds are working at
62. Two-thirds is not bad, but even
then, one-third have retired before reaching 62 despite the legal retirement
age. So, if we just raise the retirement
age beyond 62, either it doesn’t work and people drop out anyway, or employers
say, “This is going to be a burden to me.
If I’m looking at an older worker, I better not take the risk of
employing him and then I may be stuck with him till he’s 65”. So, I think we cannot just push the
retirement age up.
The better approach which we are pursuing is to legislate for
re-employment -- retire at 62, but re-employ, continue working beyond 62, year
to year, but continue working as long as you can. It’s more flexible for both the employers and
the employees; not necessarily the same job, not necessarily the same pay. It doesn’t mean that you will definitely get
a job, but employer has to make an offer and you take into account the worker’s
performance, his health, his preferences and the company’s needs and both sides
work out a win-win arrangement, usually year to year. This is what the Japanese have done, but they
only took this step after a very long period of preparation and this is what
we’re going to do also.
So, we’re going to pass a Re-Employment Act to take effect by 2012, in
fact,
So, that’s legislation, but to buttress the legislation, we’ll have
incentives and the incentive should be to encourage older people to work and to
encourage employers to hire older people, both sides. One tool which we now have to achieve this is
Workfare -- Workfare Income Supplement, which we introduced this year. With Workfare,
there is a subsidy. So, if a person
wants to work, and the employer wants to hire him, he gets the grant from the
Government. We’ve already tilted Workfare
in favour of older workers. When we
designed it, we did it so that at 35 years old, you start getting something,
and at 45 years old, you get the full rate.
But we can go further than that and we can have further higher tiers for
the older workers in their 50s and 60s to strengthen the incentive so that when
the employer looks at the worker, he calculates, between the older man and the
younger man, I think the older man has this extra little edge and between an
older worker and a foreign worker -- foreign worker, you pay levy, older worker,
he gets Workfare. So, that’s an
additional leg up for the older worker.
We had planned to introduce these additional tiers for the older workers
when we review the Workfare scheme after a few years, after it has been
implemented and we get some experience with it.
But I think this year we’re making major changes, legislation, CPF --
better not wait, let’s move now. So, we
will push the Workfare up to have higher tiers for the older workers, starting
above 55, up to double the payout for the younger workers. So, for example, a worker who’s 60 years old,
earning $1,000 a month today, he will get $100 a month from Workfare today,
same as a 45-year-old. It’s $1,200 a year, so $100 a month, ten per cent of the
salary in Workfare. When we revise the
scheme, we will double this to give him $200 a month. If he’s earning $1,000, it’s $200 a month,
which is 20 per cent of his salary; not all in cash, some in CPF, but it will
make a big difference because it will mean more take-home pay and more CPF
contributions. It will encourage the
employer to hire him and it will encourage him to go and work. These are good proposals which came up from
the unions and which were recommended by the Tripartite Committee on the Employability
of Older Workers which Gan Kim Yong chaired.
We’re implementing them now. I think it will raise the employment rate
for the older Singaporeans and help them to save more for old age and this is a
core part of our programme to help old people take care of themselves.
Improving CPF – building a nest egg
Now, I come to CPF. The CPF
system underpins our whole social security arrangements. It’s a very good system which has served us
well. It’s funded by contributions from
workers and from employers, fully funded and not paid for out of taxes, like
social security in
The first question is how to increase the returns on the CPF savings? CPF pays interest. Right now, it’s 2.5 per cent
on the Ordinary Account, four per cent on the rest -- Special Account, Medisave
Account, Retirement Account. Its
interest rate is like a savings account in the bank, only it’s better. Interest rate is higher and it’s safer. It’s totally risk-free, balances guaranteed
by the Government. Sometimes, the
returns are lower than buying shares, but sometimes, shares can lose you a lot
of money and on shares, you make big, you lose big and like recently, in one
week you can see your value go down 10, 15 per cent. If all our CPF members were on the stock
market, I think a lot of hearts will go “gedebok, gedebok” every
night. So, it’s not part of our system. Those who want higher returns can accept
higher risks, you can invest your CPF money yourself. We have a scheme,
it’s called the CPF Investment Scheme. But although it’s called the CPF Investment
Scheme, it means you invest your own money and take the risks.
I think we
must improve the returns on the CPF and I think our main focus should be to
help the lower- and the middle-income groups.
In other words, the people who don’t have so much money in the CPF. How much money do they have? Well, if you look at the active accounts, people
who are working and contributing regularly - half of the active accounts have
$45,000 or less. It’s not a huge amount,
but it does include younger workers just starting to save. So, understandably, they will have less. If we look at just the older workers, they
have a bit more, but still, if you have $45,000 you are not poor. But I would
not think it is wise to strongly encourage you to go and play the stock market. Why?
First, you don’t have enough savings; secondly, you may not have the
expertise; thirdly, you should not expose yourself to excessive risks and, in
fact, quite a number of the people who have invested on their own and bought
shares have not done so very well and probably would have done better if they had
left the money in the CPF.
So, what should
we do? I think the solution should be to
enhance the existing risk-free framework for the CPF balances. We will have the CPF Board pay higher
interest, but up to a cap. How much
higher interest? One percentage point more.
Where should we set the cap? We’ve studied this carefully. I think what we should do is to up to $20,000
in your Ordinary Account, but taking all your accounts together, up to
$60,000. Combined – Ordinary, Special,
Medisave, Retirement altogether – we will pay higher interest on $60,000. But
not more than $20,000 of that should be in your Ordinary Account because the
Ordinary Account is more liquid – you can use it for housing and so on. So, this way, more than half of the active
members will get full benefit, one percentage point more on all of their
balances. And you have these higher
returns. You can still use your money
for housing, you can still use your Medisave for medical expenses, but we will
put one restriction. There has to be a
catch there and the catch is you will not take out this part of the money to
invest in the CPF Investment Scheme because this is long-term money and you
leave it with us and we will treat it like retirement funds and we will give
you the higher interest rate.
Beyond the
$60,000, we keep the status quo. For the
Ordinary Account, it’s the same formula as now.
So, for the HDB loan rate, which I think all of you will be interested
to know, will also be the same formula as now.
For the Special Account, we are making adjustment to change the basis of
the Special Account from the present one to a long-term rate. It will mean a little bit less now but
probably more on average over the long term.
But these are details which we will explain fully later. The main message is one percentage point more
on up to $60,000.
If you have
more than 60K, what do I say to you? I
say if you have more than 60K, you should be able to look after yourself because
you have accumulated this, and you should be able to invest your money beyond
the first 60K. The CPFIS is there. Have a care, take good advice, invest it for
the long term, but you have enough so that if it goes up a bit, down a bit from
day to day, you don’t have to panic and if you take it over 5, 10, 15 years,
well, you may be able to do a little bit better.
Now, one
percentage point may not sound like a lot of money, but it makes a big
difference. If you take a young men who
starts to work today, 21-years-old, earning $1,700 a month and then over the
years, he buys a four-room flat, so he draws down some of his CPF. But meanwhile, all the money in his CPF is
accumulating higher interests, year by year, one per cent more, then compounded.over 35 years, by the time he retires at 55,
that will mean he has $20,000 more interest than he would have earned under the
present system. That means one-quarter more interest than before. It’s a lot of money. It’s going to cost the Government a lot of
money. It’s going to cost the Government
$700 million a year just for starters and over the next probably 10, 15 years,
as the CPF balances increase, members save more, I think the balances
attracting this high interest will grow and the cost for the Government will
grow.
How much is
this? $700 million year after year? Today,
our HDB subsidy - Ministry of Finance pays HDB every year for that whole
building programme is $750 million. So,
this is like one more HDB scheme. But we’ve
done our sums carefully to make sure that this is a reasonable rate to pay on
CPF balances and it is a rate which the Government can afford because it’s most
important. You cannot just suka-suka
write any number. It must be properly
justified and must pass muster and inspection by the Elected President, which
is the way we have done it and we’ve briefed the President. It is the right thing to do, to help lower
and middle-income Singaporeans to save enough for old age. And it’s a reassurance to everyone that when
you grow old, the CPF will be one major pillar to help you see through your
retirement needs.
So, that’s the first major change to the CPF, higher interest rate, subject to a cap and rules. The second question is how to make CPF savings last for your life expectancy, which means up to 80-years-old. Today, we already have some rules. At 55, you set aside the Minimum Sum, then you can take out the rest. Minimum Sum is going up. The rules for setting aside are getting tighter, but basically, you must aside the Minimum Sum. We settled this in the last round of CPF changes. So, my first message is – no change to the rules at 55 to what has already been settled. That remains. It was settled in 2003 and will continue. But right now, after you have put aside your Minimum Sum and put it into your Retirement Account, you start to draw down your Minimum Sum when you are 62-years-old. Monthly payments are supposed to last 20 years, but actually if you don’t have e