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Uniquely Singapore, F1 or F9: Are our ministers also confused by the annuity… erm… Longevity Insurance scheme?

By Andrew Loh and Leong Sze Hian

Just when we thought the confusion was over!

Do you get the feeling that this annuity …erm… sorry… this Longevity Insurance thing is messed up?

Even the New Paper reported that Singaporeans “liak bo kiew” (literally: catch no ball, meaning: don’t understand or do not grasp). (link)

One suspects that even those who should be absolutely clear about it also “liak bo kiew” – the MPs and the ministers.

35 days after the National Day Rally speech (19 August):

- the announcement 2 days later (21 August) by the Minister of Manpower that shocked the nation, with the Compulsory Annuity if you live to age 85.

- the Minister without Portfolio studying the aging issue, makes an about-turn that some will be exempted form the Compulsory Annuity. First that those chronically ill may be exempted. Then later, that those who have enough in their account may also be exempted.

- the Manpower Minister's ministerial statement in parliament that the Compulsory Annuity has become Longevity Insurance, and that the floor rate on all CPF accounts (Ordinary, Medisave, Special and Retirement accounts) will be only 2.5 % in 2 year's time, compared to the guaranteed 4 % now on the Medisave, Special and Retirement accounts.

And now (22 September), the Minister of National Development says that even those under the HDB lease buy-back scheme will have the Longevity Insurance built into the scheme.

Since it was said at the National Day rally speech that "We will pay you for the tail of the lease and you get some money out, a lump sum upfront and then the rest pay into CPF, some form of annuity, monthly payments for the rest of your life.", why is it that those on the HDB lease buy-back scheme who will have "some form of annuity, monthly payments for the rest of your life", in exchange for giving up the ownership and equity of their HDB flat to HDB, will also have to take the Longevity Insurance?

Why does one need Longevity Insurance when one already has "some form of annuity, monthly payments for the rest of your life"?

Or will those on the HDB buy-back scheme be exempted from the LI scheme, just as those who are chronically ill – as mentioned by the Minister without portfolio?

So, those who will be exempted are the rich (because they have enough for retirement), the chronically ill (because they are going to die soon) and those who sell back their flats to HDB (because…. ?).

The rich who have other means may be exempted from the Longevity Insurance, but the poor who have only one 2 or 3-room HDB flat to fall back on in their retirement will have to take the Longevity Insurance, despite already having a life annuity under the HDB lease buy-back scheme?

Do all the MPs know about these? Do the ministers really know what they are talking about?

6 months for answers

To top it all off, the Manpower Minister has appointed a committee and given them 6 months to look into all this. Shouldn’t the government have undertaken such a study before making all these announcements, confuse everyone and then when asked, say that the answers and details will only be known after the study, 6 months later?

Why make such momentous and significant announcements before a comprehensive study was done?

All the flip-flops and about-turns – are they symptoms of poor policy formulation?

Why wasn't a comprehensive study done before the policy announcement?

Was the CPF Board surprised by the ministerial announcements?

No wonder, the New Paper said that most people "liak bo kiew"!

"Carefully considered"

Now, in a Channelnewsasia report headlined “CPF reforms carefully considered, govt can deliver: PM Lee”, one would have to ask: If it was “carefully considered”, why is there a need to set up a committee after the announcements, ask it to look into the LI scheme and say that the details will only be known 6 months into the future?

What does the PM mean when he said “CPF reforms carefully considered”? Who “carefully considered” it? Why is it that whoever “carefully considered” it still need a committee to work 6 months to study it?

Going forward, let's hope the Longevity Insurance Committee's deliberations and findings, and subsequent policy implementation may be of a higher standard befitting a government which only recently declared itself “unique”, “special”, “extraordinary” and “world class”.

It shouldn't be too much to ask for - after all they are the ones who insisted on being paid the highest salaries on the planet.

Do our ministers also "liak bo kiew"?

Cartoon courtesy of My Sketchbook.