Pension and retirement systems need rapid reform to meet global aging woes, report warns

Singapore’s CPF is in the spotlight.

Rapid change is needed to rebalance pension and retirement systems worldwide, as countries continue to struggle with demographic transformations and concerns mount about governments’ capabilities to fund long-term liabilities.

According to a report by EY, Singapore’s Central Provident Fund (CPF) is one of the more matured global pension systems but it is still being refined.

“Pension systems present significant business opportunities in many countries and we are seeing movements and additions of broader elements for financial well-being in retirement for Singaporeans. In Singapore, pension products providers will increasingly be expected to back up their offerings with customer communication and education that explain clearly what the products do and how, if at all, they are different from what the CPF would offer,” noted Brian Thung, Financial Services Partner at EY in Singapore.

According to the report,there is a need to rebalance benefit expectations with financial resources, as well as a need for local financial markets to evolve concurrently with growth in pension assets.

Pension providers should also accept a new level of regulation, supervision, governance and transparency and increase their focus on operational excellence.