Study says CPF needs to improve in these two areas

It can open up the scheme for non-permanent residents as well.

Singapore continues to lead Asia’s pension schemes for the tenth consecutive year, according to the Global Pension Index by Melbourne Mercer. It sealed continuous improvement in its index score of 70.4 from 69.4 in 2017 due to improvements in the sustainability sub-index.

“Having one of the most developed pension schemes in Asia, Singapore has continued to make improvements through the central provident fund (CPF) by providing more flexibility to its members,” Mercer’s director of strategic research and growth markets Garry Hawker said.

Also read: 6 in 10 Singaporeans eye financial support from CPF by age 62

According to the study, Singapore’s CPF can still seal improvement in its overall index score by increasing the age limit of its withdrawals as life expectancies rise as well as by opening CPF to non-permanent residents in Singapore.

The study also noted that result common across all results was the growing tension between adequacy and sustainability.

“It’s a challenge that policymakers are grappling with,” author of the study and Mercer Australia senior partner Dr David Knox said.

“For example, a system providing very generous benefits in the short-term is unlikely to be sustainable, whereas a system that is sustainable over many years could be providing very modest benefits. The question is – what’s an appropriate trade-off?”

The index uses three sub-indices including adequacy, sustainability and integrity, to gauge each retirement income system against more than 40 indicators.