By Howard Lee
Responding to Prime Minister Lee Hsien Loong's announcements at the National Day Rally on enhancements to the Central Provident Fund scheme, the Singapore Democratic Party has issued a media statement calling on the government to "stop playing these money games and, instead, honour its pledge to return to Singaporeans their CPF savings".
PM Lee has announced at the National Day Rally that, while the Minimum Sum for CPF will be increased next year, citizens would soon be able to take advantage of amendments tot he lease buyback scheme to help increase their retirement savings. He also indicated that rules will be relaxed to allow CPF members to withdraw 20% their CPF Minimum Sum at age 65, if certain conditions are met.
SDP indicated that PM Lee's announcement failed to address an all-important question, which was how older Singaporeans would be able to survive in their retirement.
"As it is, most Singaporeans do not have enough to meet the Minimum Sum of S$155,000, which will be increased to S$161,000 in 2015," said party secretary-general Chee Soon Juan in the statement. "Giving back retirees small monthly installments of a few hundred dollars under the Minimum Sum Scheme will not allow them to survive in a city ranked as the most expensive in the world."
Instead, he referred to earlier proposals made by the SDP in the areas of housing and healthcare policy, to alleviate the situation.
The first solution is to remove land cost from HDB prices and to implement a Non-Open Market (NOM) scheme for flats, which will allow Singaporeans to 'sell' their flats back to the government. The portion deducted for land cost, which the SDP estimates to be between $100,000 to $300,000 per flat depending on the flat-type, can then be returned to their CPF accounts.
A great proportion of any CPF member's monthly contribution to their retirement savings goes towards paying mortgages for the home they live in.
Next, SDP proposed for Medisave to be scrapped and instead for the government to implement it's proposed National Health Investment Fund, earlier proposed as part of the party's national healthcare plan, the cost of which the government would help supplement.
"In this manner, there will be universal healthcare in Singapore and Singaporeans will be relieved of the burden of paying unaffordable healthcare expenses." Medisave, one of the three components of the 3M national healthcare plan, is also paid for using CPF contributions.
Lastly, SDP proposed that the government returns CPF fund to the people, without the imposition of a minimum sum, which is only made available to citizens at age 65.
"Singaporeans must be able to withdraw all their savings to fund their retirement years. In other words, abolish the Minimum Sum Scheme. Singaporeans are much better custodians and managers of their own money than the PAP Government."
SDP believes that the measures it proposed "will give Singaporeans sufficient funds to live our retirement in security and dignity. Singaporeans work hard our entire lives and should not be squeezed even more during our retirement years."