Singapore’s retirement income system is based on the Central Provident Fund (CPF) which covers all employed Singaporean residents. Under the CPF, some benefits are available to be withdrawn at any time for specified housing and medical expenses with other benefits preserved for retirement. A prescribed minimum amount is required to be drawn down at retirement age in the form of a lifetime income stream (through CPF Life). The Singapore government has implemented changes to CPF in 2016 which include providing minimum pension top-up amounts for the poorest individuals, more flexibility in drawing down retirement pension amounts and increases to certain contribution rates and interest guarantees.
The overall index value for the Singaporean system could be increased by:
- reducing the barriers to establishing tax-approved group corporate retirement plans
- opening CPF to non-residents (who comprise more than one-third of the labour force)
- increasing the labour force participation rate at older ages as life expectancies rise
The Singaporean index value increased from 64.7 in 2015 to 67.0 in 2016 primarily due to an increase in the level of support provided to the poor.