Abolish CPF and the retirement age

By Benedict Chong

It was only several months ago when PM Lee Hsien Loong launched a defamation lawsuit against Roy Ngerng for insidious and damaging attacks upon his character and name. The scope of this article, however, is not to question the morality of the lawsuit. Instead, it aims to delve into a field not visited by Roy in his allegations towards the Central Provident Fund (CPF) scheme.

This article seeks to challenge the legitimacy of the CPF scheme on moral grounds and dispute the existence of a retirement age in Singapore.

The  CPF scheme was first introduced in the mid-1950s as a mandatory savings plan for Singaporeans, a policy which would fund their retirement. It was meant to relieve the burden on state finances supporting retirees who could no longer fend for themselves when their incomes dried up. 

The scheme was exceedingly simple when first introduced, with monies from citizen incomes flowing in while under employment and dispensed out upon retirement. Over the years, however, we have seen an initially straightforward scheme evolve into an unrecognisable behemoth. 

Now, the 
CPF scheme comprises various plans, policies and accounts through which monies can be drawn and used for a variety of purposes such as housing down payments, healthcare, education and financial investments. It is no longer solely about retirement, as first mooted. 

 itself has outlived its original purpose. It may have been reasonable to enforce a compulsory savings scheme in the 1950s through to the 1980s due to the relatively lower education levels of citizens at that time. But in contemporary Singapore, the antiquity of CPF makes it a legacy of the past. A legacy that like many, including National Service and 377A, the state seeks to retain for reasons unknown or unjust. 

The Singapore government has always exhorted a doctrine of individual self-reliance and responsibility. But 
CPF, being a compulsory scheme, contradicts that position. Far from encouraging self-reliance, it forces people to depend on the state for retirement plans. True self-reliance would entail individuals searching for the best retirement policies available, not have one imposed upon them via legislative and executive power. It is time for the government to practice what it has always preached by abolishing the CPF scheme. 

To take the side that 
CPF should continue to operate is to argue that Singaporeans, the majority of whom are now highly educated, are irresponsible and cannot wisely manage their own monies alone. They would thus be contending that the state needs to step in, take a portion of their incomes, save up for them, and then arbitrarily decide when to return the cash and how much to. They would be volunteering to be puppets led by strings. 

The abolishment of the 
CPF scheme would enable consumers and companies alike to cumulatively have hundreds of millions, if not billions of dollars more to pump into the local economy yearly.

Individuals will be able to seek private insurance policies tailored to suit their needs and wants instead of a one-size-fits-all policy that few can comprehend. Businesses would also be able to channel monies originally earmarked towards CPF onto more productive ends such as research and development projects. The original employer contribution could possibly even be used to raise disposable incomes.

Similar to the CPF scheme, the statutory retirement age should be annulled. The presence of a retirement age serves little purpose.

Over the years, the retirement age has been progressively raised and right now, stays at 62-5. It reduces the independent element in individual decision making and reduces freedom of choice. People choosing retirement earlier will be little affected but anyone choosing to work past that age (62) bears the risk of reduced incomes and benefits.

The issue of increasing the retirement age has never once failed to evoke negative political sentiments towards the state. But these people are not seeing the forest for the trees. They accept the present situation as given, as something expected and required. They do not question the necessity and morality of a legal retirement age.

The recently enacted Retirement and Re-employment Act is yet another deceptive tool for the state to exercise control over the economy and the people. By attempting to engineer labour supply, the state distorts the labour market. Any resultant shortage is then typically attributed to the “laziness” of Singaporeans not working longer for the country’s future or persistently low birth rates.

Had the retirement age served any purpose, it would have been a fixed number with little change over decades. The arbitrary shifting of numbers displays nothing but policy hesitancy and ignorance. That the retirement age has been increasing from 55 through to 62-5 points to an imperfect system, yet the state still persists with the status quo. If the argument provided for a retirement age is that other countries have similar statutes, well
the response would be that nothing is morally justified by numbers.

If the state does not have a “20/20 vision” of the future, the best option is to stay out and do nothing. Unfortunately, to ask any state to do nothing is akin to asking for the moon. It will hardly happen, if ever. There is a higher probability discovering oil in Singapore than having the government stay out of our affairs totally.

Is individual sovereignty any less important than the needs of the state? Should the state have the right to legislate when people ought to retire? The state may have the political authority through the electoral process, but the people should not be politically obliged to blindly obey. People are morally obliged not to commit crimes such as murder, but they are only politically obliged to contribute to CPF, for instance, by threat of force. There is a huge difference.

Henry David Thoreau once said: “That government is best which governs least.” Not only does the Singapore government govern much but they perversely believe it to be the best for the country and its people, a syncretistic ideal wholly unbelievable and most laughable for its ardent audacity and idiosyncrasy.

Can government with all its inefficiency and red-tape bureaucracy really create the personal utopia of every citizen? All the state does is stifle individual dynamism with rules and regulations in the name of a hypothetical greater good. How is that ever the best, if beneficial at all? In terms of a greater good benefiting the majority, how is it morally justified for 51% to benefit at the expense of 49%? It can never be.

In a one-size-fits-all policy, there will always be many minorities unable to draw any benefit and may in most cases, even be disadvantaged. The solution is extraordinarily simple. We eliminate such possibilities by allowing people to make their own decisions privately. There is no need for the state to intervene. Only then will people ever be free of the state’s presence and shadow, able to make decisions best suited to their needs and wants.