TOC writer Leong Sze Hian was interviewed for his views by the mainstream media on the Prime Minister’s National Day Rally Speech. Below are some extracts from the various reports.
Straits Times, 21 August
Views split over making annuities a must for the under-50s
In the other camp were people like the president of the Society of Financial Service Professionals, Mr Leong Sze Hian. While not against annuities, he had reservations about not giving people a choice.
'Those with the full CPF Minimum Sum should be okay. But if you make those who don't even have the full Minimum Sum buy annuities, they may not have enough left to survive,' he said.
To illustrate, he estimated that based on a CPF Minimum Sum of $120,000, a CPF member would get $1,180 by drawing down his CPF but only $900 from an annuity.
The Government will raise the Minimum Sum in stages until it reaches the target figure of $120,000. Currently, it is $99,600.
Mr Leong worries that those without the target Minimum Sum will get less from an annuity - maybe even too little to sustain themselves.
Thumbs up for higher interest rates -
Hike will add up to hefty amount of extra savings over work life
However, the president of the Society of Financial Service Professionals, Mr Leong Sze Hian, advises the lower-income to be more circumspect. He warned against committing too much in property, once thought to offer sure-fire better returns.
'The right strategy for the lower-income group is to buy a three-room flat. Don't upgrade; let the rest of your money stay in your account and earn interest.'
By doing so, they can gain from a new scheme that lets specified elderly home owners monetise their HDB homes. The Government will shorten the lease on their homes to 30 years and pay them cash for the lease value foregone.
'Modest' payouts but low-income flat owners will benefit –
Experts: Scheme a big help to elderly with little or no retirement income
Like him, the president of the Society of Financial Service Professionals, Mr Leong Sze Hian, felt the plan should be seen as more of a fall-back option for those without sufficient retirement savings.
TODAY, 21 August
Jobs for the elderly: The make-or-break factor in grand plan
Low-income, older Singaporeans who are unable to find jobs could face a resultant "cash crunch", said Mr Leong Sze Hian, president of the Society of Financial Service Professionals.
"First, they are hit by the longer wait to draw out the minimum sum. Second, they are hit by the lower amount of the payout," he noted. This could put older workers "at the mercy" of their employers when it comes time for re-employment.
My Paper (Chinese), 21 August
CPF savings rate raised
Lauding the move, Mr Leong Sze Hian, president of the Society of Financial Service Professionals, said there is a growing number of Singaporeans who are not able to meet the minimum sum requirement — now set at $99,600 — and higher returns would mean more having a higher balance when allowed to withdraw their CPF at age 55.
However, Mr Leong felt that more would have to be done to help the poor because most of their CPF is tied up in mortgages, leaving little in the system to collect interest anyway.
Straits Times, 20 August
Majority will gain from CPF interest rate hike
1 percentage point hike to cost Govt $700m a year but will help many build bigger nest egg
Financial analysts interviewed yesterday generally cheered the move, but Society of Financial Service Professionals president Leong Sze Hian thought the change might not amount to much for some of the low-income.
'They use most of OA for their housing and get little in terms of their Special Account contributions,' said Mr Leong.
TODAY, 20 August
Annuities compulsory, but tailored to your needs
"It's a good move" to make annuities compulsory, "provided the annuity rates will be higher than the current rates available", said Mr Leong Sze Hian, president of the Society of Financial Service Professionals.
The highest annuity payout presently offered is about 29 per cent below the CPF Board's minimum-sum payout of $790 monthly, he added.
Sze Hian has 3 Masters degrees in Financial Planning & Financial Services, 2 Bachelors degrees in Economics & Insurance, and 13 professional qualifications. A Wharton Fellow, he is a Certified Investment Fiduciary Auditor, alumnus of Harvard University and the inaugural United Nations University International Leadership Academy. He has served as Honorary Consul of Jamaica, Representative of the Inter-American Economic Council, Chairman of the Institute of Administrative Management, on the Board of Trustees of the Singapore Professional Centre, President of the Society of Financial Service Professionals, the UNESCO Leadership Chair Council, and founding Advisor to the Financial Planning Association of Indonesia.