SINGAPORE: The age when a person is allowed to withdraw the CPF Minimum Sum
could be raised from 62 to 65 in the near future. This is one suggestion by
Minister-in-charge of ageing issues, Mr Lim Boon Heng, who has just returned
from a study trip to Japan.

Under the law, CPF withdrawal is tied to the prevalent retirement age. So if the retirement age is raised, then the CPF drawdown age would be raised as well. In May, a tripartite committee studying the issue of employing older workers in an ageing workforce said hiring older
workers beyond the age of 62 would become part of Singapore's employment laws
within the next five years.

To cope with an ageing population, Japan and some European countries are already raising the age at which national pensions are paid out to 65 and beyond. By 2013, all Japanese will not be able to draw out their national pensions until they are 65.

Singapore may follow-suit, with its CPF system. That is because the average life expectancy of the elderly is now 82. So Singaporeans need to think about how to stretch their savings. Mr Lim
said: "I think it is quite reasonable to raise it to 65, if our objective is to raise the employment rate of this group of people, but I think we should do so cautiously. "So we should make employment happen. We should not leave people in a situation where they can't get a job and yet the minimum sum drawdown age is raised. So we must first make sure... that the employment rate [is] going up."

The government is already getting employers and employees to negotiate terms of
re-employment, once the worker hits the retirement age at 62. Extending this
retirement age is not a law yet, as the government first wants to explore what
types of issues will crop up and how they can be resolved.

In Japan, the reemployment law states that the employer is obliged to offer a job to someone who has reached the age of 60 until he is 65. But how this is done is open to discussion. For example, employers can pay the worker less, or arrange for another job for the worker. And the Japanese government is now thinking of raising the retirement age to beyond 70. It has even set a target of 90 per cent employment for those aged 60 to 65 by the year 2030.

Currently, 52.6 per cent of Japanese in this age group are employed. In Singapore, this figure is 41.9 per cent. During his study trip, Minister Lim also visited nursing homes and day care centres in Japan. Many of the elderly in these centres are subsidised by a long-term care insurance implemented by the state seven years ago. But since it kicked in, financial outlay grew from S$45 billion to S$87 billion last year.

So it is becoming clear to the Japanese that this is unsustainable. Mr Lim said such an example showed that the responsibility of caring for the old, should not rest on the state. "As the Japanese are realising, it is the family that should look after the old and it is the community that should support the family to look after the old. This is the lowest cost option for any society," said Mr Lim.

And to help families, Singapore could take a leaf from Japan's example, where there are courses for caregivers, who also have a support network. Mr Lim is also against giving state funding to these caregivers. In Japan, families cannot claim from the long-term care insurance when they stay home themselves to look after the elderly, but they can claim if they hire external help.

"This is a choice which people have to make based on their set of values. And the set of values that I would like to maintain and promote is that it is the duty of the family to look after its old. "Payment to family members breaks that link and I think it would cheapen the care that the family members give to their old if we equate that with payment," said Mr Lim.

Also, there is already the Eldershield plan, which allows the individual or his family to decide what to do with the payouts. As for singles, Mr Lim said there are provisions made for them, such as the building of studio apartments. But as far as possible, he wants to encourage even singles to live in their own homes, and better still with their families. - CNA/yy

*Quoted from Channelnewsasia.com