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Asher, M.G. and Bali, A.S. (2012) Singapore. In: Park, D., (ed.) Pension Systems in East and Southeast Asia: Promoting Fairness and Sustainability. Asian Development Bank, Manila, pp. 85-98.

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Abstract

Singapore’s single-tier, defined-contribution pension system is administered by the Central Provident Fund (CPF) which has nearly universal coverage. In 2010, however, the average balance per member was Singapore $57,000 which was approximately equivalent to the per capita income. This will not finance the 2 decades of retirement expected as the population ages in the next 20 years. Concerns about fairness arise from tax treatment, different designs for different groups of workers, the lack of social risk pooling, and the absence of pension arrangements for foreign workers. Broad directions for promoting fairness and sustainability are fairly clear: (i) using more social insurance principles and social risk pooling instruments such as social pensions; (ii) reforming the investment policies of the CPF by bringing them more in line with the military’s SAVER Plan; and (iii) improving the design of the CPF to promote fairness. The government has both the financial and administrative capacity to do this but has instead placed disproportionate importance on achieving high economic growth while not taking sufficient account of the negative implications on social protection. In the 2011 general election, nearly 40% of the electorate voted for opposition candidates. This could be interpreted as an urgent need for a more balanced approach to economic growth and social protection.

Publication Type: Book Chapter
Publisher: Asian Development Bank
URI: http://researchrepository.murdoch.edu.au/id/eprint/38673
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