I am writing this column on a plane, on my way back home from Mauritius, having just finished 3 days of speaking engagement to a group of financial services people there. I have always enjoyed being in Mauritius. It is a beautiful island situated in the Indian Ocean that is about 3-4 times our size but with only 1.2 million people. I like it not only because its people are friendly, the country is beautiful, but most of all, they have always made me feel proud of being a Singaporean. The Mauritians have always openly admired us for how we have transformed a small island with no natural resources to a country that has one of the highest per-capita income of the world today. If you walk into a bookshop in Mauritius, you will easily find books on Singapore sprawled across the bookshelves. And because of the Singapore brand, it has opened so many doors for me. In my years there, I have spoken to senior policymakers of their Financial Services Commission, visited their pension board and spoken to many financial services professionals of the country. All these can happen, simply because I am a Singaporean.
Why am I writing all in a financial column? Because when Today newspaper asked me to comment on the impending compulsory annuities scheme proposed by our government, I did research on various media channels and felt deep concern about the comments from fellow Singaporeans. It is not just the tone of the comments that was worrying, it is that this came obviously from educated citizens and many of the comments were self-centred and anti-government. Why is it that many countries envy Singaporeans and looked up to us while we are so unhappy with our own situation?
Let’s begin with the gist of what this annuities scheme is all about. To ensure that the payouts from Minimum Sum last through the life expectancy of CPF members, the government has recently proposed to delay the Minimum Sum draw-down age progressively from age 62 to age 65. To give a stream of life-long income to those who may live beyond age 85, the government is also planning to set aside a sum of money from the individual minimum sum to buy into a compulsory annuity for all CPF members. If one dies before age 85, the amount goes to the pool and payout to those that are still living. It seems that Singaporeans were upset that we are denied a choice to decide what to do with our own money. Many do not see ourselves living beyond age 85 and are unhappy that our money will be going to someone else instead of their own families. Many even question the integrity of the government, as they show skepticism on whether the money will really benefit the pool of retirees living beyond age 85 or go somewhere else.
Of course, I am not saying that we should always be happy with whatever the government decides. This defeats the purpose of democracy. We should always voice out our opinions so that the leaders can know what the ground thinks and feels. Furthermore, many may not fully understand how this scheme works. As an example, many may not know that the amount to be set aside may not be more than $10,000 and that the estimated monthly payout amount at age 85 from the annuity scheme would probably have taken into consideration the amount of those who may not survive and have contributed their share into the pool. However, in airing our opinions, we should not miss the big picture, in that this scheme is meant to take care of those more needy ones, who may not be able to plan for themselves and will live beyond age 85. My personal opinion is this: For those of us who are earning a reasonable income, and by that, I mean at least $2,000 per month and that we are able to plan for ourselves, have a mindset to plan for our retirement and not even depend on this annuities scheme. If we live beyond age 85, take this monthly annuity as extra bonus. If we don’t leave beyond age 85, take it as we are contributing to the nation, in order for this scheme to be able to go on, so that other more needy Singaporeans can benefit. It is always better to be able to give than receive. In giving, it means you have sufficient. Isn’t it good to be sufficient?
Many suggested that the government should use tax money to support those in need when they are old. Until and unless it becomes absolutely necessary, I personally do not think it is a good idea. This is especially so when our population is ageing and our birthrates are dropping. We may have lesser tax money in the future unless we manage to attract enough migrants to replace our low birthrate. Even so, I always believe that tax monies should be used for the furtherance of our economy. If we can sustain our economic progress, our children will benefit.
Our responsibility as citizens is to air our opinions when required. The leaders’ job is to digest all our opinions and make decisions but we must be mature to accept that once we aired our views, we should allow the leaders to make the decision and we support that decision as a team, whether our ideas are accepted or not. If everyone insists on having their ideas implemented and when they are not, we are upset, the country cannot progress. This is the same for organizations as well.
Last month, I was sharing to an American about our National Day and encouraged him to watch our National Day Parade, to feel the Singapore spirit. However, he responded negatively by saying he does not appreciate how our country is being run. He also said our Minister Mentor Lee Kuan Yew is a dictator. As a Singaporean, I had to defend my country. I told this American that he needs to understand our context before making that conclusion. When Mr Lee first governs Singapore, we just turned independent and we were a baby nation. You don’t give young kids many choices when they still do not know how to choose. You do what is best for them. You only allow your kids more freedom when they grow older and begin to understand things. I told him Singapore is not America. And he should not expect us to run it the way his country runs it. There is a lesson here for all of us. The government needs to understand that as we mature as a nation, we should be engaged more. Singaporeans always have the perception that once our government decides on something, the feedback session is just going through the motion. This may be the reason why this compulsory annuities issue has incurred so much unhappiness.
We are all responsible for our own retirement. Take charge and start planning early. As citizens of Singapore, we are also responsible for the poorer Singaporeans who may not have the financial capability to plan for themselves. We must all share this burden. The compulsory annuities scheme is one way of doing so. We all participate so that the scheme and go on. Let us not be people who want to enjoy the rewards of the nation, but yet do not want the responsibility. For the leaders of our country, we are maturing as a nation, and as the child gets older, they become rebellious if he feels he is not listened to.
When I ended the seminar for the Mauritian, I showed the video of how Singapore grew from independence to the prosperity of today. I asked them what Singapore’s differential advantage is. They all said it is strong leadership and a group of people willing to be led. I agree. They followed up by saying they wish they have such strong leadership in Mauritius. I asked them whether they can don’t chew gum. They said they can’t. I then ask them to be happy with their government. What can make all of us truly happy? It is contentment. Let’s be contented that we live in Singapore. This is our home.
The writer, Christopher Tan, is Chief Executive Officer of Providend, a Fee-only Wealth Advisory Firm. Besides being financially trained, he is also an Associate Certified Coach with the International Coach Federation. The edited version has been published in The Business Times on 19th September 2007.
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