Prime Minister Lee Hsien Loong’s first radio call-in: Retirement issues top listener concerns

By Joy Fang, TODAY, 2 Sep 2014

Making his first appearance on “live” radio, Prime Minister Lee Hsien Loong was inundated with calls as listeners dialled in to Chinese-language station Capital 95.8FM, while presenters Lin Lingzhi and Pan Jiabiao peppered Mr Lee with questions sent in via Facebook and SMS.

But while the topics discussed spanned a broad range from politics to education, retirement adequacy appeared to be the issue that weighed most heavily on listeners’ minds, with questions on the Central Provident Fund (CPF) scheme and housing dominating the hour-long special last night.

Asked about fears of being unable to attain the CPF Minimum Sum, Mr Lee, speaking in Mandarin, said that “on the whole, most Singapore elderly should have no problems with daily expenses” upon retirement, with monthly payments from their CPF accounts. They also have options for monetising their homes, such as by downgrading to a smaller place, renting out spare rooms or tapping the Government’s Lease Buyback Scheme for their Housing and Development Board (HDB) flats.

When asked if the Government would consider offering the Lease Buyback Scheme — which will be extended to four-room HDB flats — to owners of private housing, Mr Lee said there were no such plans at the moment. While there are forms of buyback schemes in the commercial market which other countries are adopting, these have not caught on in Singapore, he said.

However, the Government was aware that there are retirees living in private housing who may be asset-rich, but cash-poor. “We should take a closer look at this problem ... We can think of a solution to help them,” Mr Lee said.

Details on the expansion of the Lease Buyback Scheme are expected this week. In March, the Government said it was studying reverse mortgages as a means to help elderly Singaporeans retire comfortably.

Noting that some may be reluctant to sell their homes, Mr Lee said not everyone needs to resort to that, and many have children who can help provide for them. “The (Lease Buyback) scheme is the last option, but it doesn’t mean you have to do it or that we are encouraging you to do it. We are giving you a choice,” he said.

When presenter Lin Lingzhi noted some felt that how a person spent his or her CPF savings should be a personal choice, Mr Lee said a person is not only an individual and belongs in a society. “When people get old and have medical problems, it is hard for a government to say, ‘This isn’t our problem’,” he said.

He added: “The CPF scheme should provide some flexibility to allow people to withdraw a portion if they really need it. But I feel you should try not to dip into your CPF savings if you can help it and depend on your other savings first. Because CPF is meant to provide security during retirement.”

Over the course of the programme, more than 100 questions were received by the MediaCorp station through calls to its hotline, SMS and Facebook.

Among them were questions over Mr Lee’s call for a cultural shift away from the paper chase, which was made during the National Day Rally last month. Acknowledging that the dominant mindset is that a university degree is a must, Mr Lee said: “It doesn’t mean once you get a degree, employers will immediately regard you as more valuable. They will still look at whether you can contribute to the company ... You may have bought a university degree, but that does not mean you get better treatment.”

While one should treasure the opportunity if one manages to get into the local universities here and obtain a good degree, there are still other options for those who do not, he said.

With a General Election due to be held by January 2017, one listener asked if the Government could consider increasing the number of Single Member Constituencies (SMCs), so citizens can vote for individual candidates. Responding, Mr Lee said the Electoral Boundaries report has not been done yet, but said both SMCs and Group Representation Constituencies have their purpose.

Asked whether he felt public satisfaction has improved over the past two years, following a slew of initiatives such as the Pioneer Generation Package aimed at addressing citizens’ concerns, Mr Lee said: “I believe people feel that the things that have caused them frustration in the past have reduced. Of course, I hope people are much happier than before.”

He added: “But while we can satisfy people’s basic needs, one’s own personal happiness or worries are not entirely up to the Government’s control.”

PM urges CPF members not to withdraw funds at 55
It is better for people to work till the age of 65 if they can, says Mr Lee
By Tham Yuen-C, The Straits Times, 2 Sep 2014

WITH longer lifespans, Central Provident Fund (CPF) members should not aim to make withdrawals from their retirement funds at age 55, Prime Minister Lee Hsien Loong said on a radio programme last night.

He encouraged CPF members to work longer, until they are 65 if they can, saying they can take out some of their CPF funds to pursue their dreams then if they want to.

Mr Lee made these remarks as he sought to explain to a listener why withdrawing all or a sizeable amount of CPF savings at age 55 is not prudent, even as the Government moves to make the CPF scheme more flexible.

The listener called into Chinese station Capital 95.8FM during a one-hour programme with the Prime Minister.

The 53-year-old man, who said he worked as a delivery man by day and taxi driver by night, said he wished to use his CPF savings for travel. "I hold two jobs and work 365 days a year... I hope I can withdraw my CPF savings so I can see the world when I'm 55. Now, I can see that there is money in my CPF account, but I cannot use it," he said.

In response, Mr Lee said the man, who identified himself as a senior, was "still young", and that retiring at 55 would be too early based on current life expectancy.

Mr Lee urged the man to work until 65 if he could, adding that he could take out some of the money in his CPF account then to travel, invest or give to his children.

During this year's National Day Rally, Mr Lee had announced changes to the CPF scheme that would allow CPF members who are 65 and over to withdraw a lump sum from their Minimum Sum savings if they needed to, subject to limits.

Yesterday, Mr Lee brought this up as he acknowledged that the CPF scheme should provide some flexibility.

But he also noted that the CPF withdrawal age of 55 was set more than 50 years ago when life expectancy was around 63. Many Singaporeans now live past age 80 and even 90, he added.

Since CPF savings are meant for use during retirement, depleting the account too early would leave people with not enough in their old age, he said.

"I feel you should try not to dip into your CPF savings if you can help it, and depend on your other savings first. Because CPF is meant to provide security during retirement."

While CPF was a hot topic during the programme, Mr Lee was also asked questions about issues such as the Lease Buyback Scheme, immigration and the recent push to provide more opportunities for non-degree holders.

On the Lease Buyback Scheme, he was asked by a listener if this would be extended to private property owners.

Mr Lee said the Government would look into whether schemes for private property, available in some other countries, would work here. But he added that private property owners had other ways to monetise their property, such as by selling it and moving into a smaller place or a Housing Board flat.

Another listener asked if scholarship holders in the public service are promoted faster and given more opportunities than non-scholarship holders.

To this, Mr Lee replied with an emphatic "no". He added that public servants are judged based on their work abilities, and not on their qualifications, even if the qualifications may have got them hired.

Balance needed between GRCs and SMCs, says PM
The Straits Times, 2 Sep 2014

THE electoral boundaries committee will need to maintain a balance between Single Member Constituencies (SMCs) and Group Representation Constituencies (GRCs) in drawing the electoral map for the next general election, the Prime Minister said last night.

And, the committee has yet to be convened, he added.

But ultimately, regardless of how the electoral map is drawn by the committee, the process would be reasonable and fair.

Mr Lee Hsien Loong was responding to a listener, Mr Yang, who called in to MediaCorp's Capital 95.8 Chinese radio station during a special on-air programme with him, to ask if there would be more SMCs.

This is so that more people could, as Mr Yang put it, choose the representatives they want.

In his reply, Mr Lee said that both SMCs and GRCs serve a purpose.

And incumbents in GRCs will also have to contest to keep their seats in Parliament, he added.

The last general election in May 2011 was the first in which the People's Action Party lost a GRC to an opposition party, when Aljunied GRC fell to the Workers' Party.

In that election, the number of SMCs increased to 12, from nine in 2006. The number of GRCs grew to 15, one more than in 2006.

Since 1988, voters living in GRCs elect teams of three to six MPs, one of whom must be a member of a minority race.

For the 2011 General Election, the boundaries committee - which studies and, if need be, redraws constituency boundaries before a general election - was convened by October 2010.

It issued its report at the end of February 2011.

Better payouts needed for reverse mortgage scheme for private housing, say analysts
A 2006 scheme from NTUC Income only attracted about 20 home owners, and analysts say better payouts are needed if such a scheme is to attract more owners of private property. 
By Ng Lian Cheong, Channel NewsAsia, 2 Sep 2014

One way to help owners of private housing monetise their property for retirement is to relaunch the reverse mortgage scheme, which was first introduced eight years ago.

Although it did not meet with much success at the time, property analysts say more elderly home owners could be attracted to the scheme if it ensures good payouts.

Under a reverse mortgage, the owner retains the full lease of the flat, but takes a loan against his flat as collateral, and will have to repay the loan with accumulated interest upon termination of the loan, or death.

In a live radio programme on Monday (Sep 1), Prime Minister Lee Hsien Loong said the Government is prepared to study the issue of private housing and how to monetise it for retirees. He noted that one insurance company had earlier experimented with a reverse mortgage scheme, but it was stopped due to low demand.

NTUC Income introduced the scheme in 2006. But three years after it was launched, the scheme had only managed to attract about 20 home owners.

Analysts say owners of private property will consider the amount of payouts on offer before joining such a scheme, and these payout amounts are largely influenced by the value of the property.

Said Mr Nicholas Mak, Executive Director for Research and Consultancy at SLP International Consultants: "For the home-owner to continue receiving the monthly payouts, and for the financial institutions to not suffer financial losses, the value of the property will need to remain fairly stable, or to appreciate. In a situation where the value of the property is declining, then the financial institutions may either reduce the loan term, or pay out less money to the owner, in order not to suffer a financial loss."

Mr Alfred Chia, CEO of SingCapital, believes the popularity of the scheme depends on the payout. "If the payout is not attractive, which was the case in the past, the plan is not going to be attractive. Coupled with the mindset of Asians, where they want to leave something behind for the second generation, this means you're giving up all your assets."