A recent study done by insurance conglomerate Allianz revealed that Singapore’s retirement system, the Central Provident Fund, is inadequate to maintain the same standard of living after retirement.
This finding coincides with another index done in September, the Melbourne Mercer Global Pension Index, which lowered Singapore’s retirement savings system from grade “B” to “C+”.
One key reason why is because of exorbitant housing prices as Singaporeans used up most of their retirement fund for HDB flats. Singapore have the 4th least affordable housing prices in the world according to a recent survey done by UBS.
Compared to other retirement schemes, the CPF also pay the lowest in interest rates (2.5% for Ordinary Account) which resulted in retirement savings growing at a much lower rate.
The Singapore government’s response to inadequacy in retirement is by raising Minimum Sum, forcing more CPF contributions by both employers and employees. Elderly Singaporeans are also discouraged from retirement as the ruling party PAP raised the retirement age to 67 by 2017.
Most Singaporean elderly work in demeaning and low paying jobs like cleaners and security guards. There is no Minimum Wage in Singapore and they usually have to work overtime to get a better income.