Lianhe Zaobao Editorial:
*Fulfilling Commitments and Keeping Pace with the Times: The Secret to the Longevity of the CPF System*
联合早报社论：践行承诺与时俱进是公积金制度长寿秘诀
https://www.zaobao.com.sg/forum/editorial/story20250210-5853693
February 10, 2025
Mercer, an international consulting firm, has ranked the Central Provident Fund (CPF) of Singapore as the best pension system in Asia for 16 consecutive years, highlighting its adequacy, sustainability, and credibility. In 2024, it ranked fifth among 48 countries and regions globally, only behind the pension systems of the Netherlands, Iceland, Denmark, and Israel. During an exclusive interview with our newspaper on the 70th anniversary of the Ministry of Manpower and the Central Provident Fund Board, Prime Minister Lawrence Wong emphasized that this is a unique system that reflects our social contract: individuals, employers, and the government work together to build a social safety net that addresses the retirement, housing, and healthcare needs of the people.
Most countries in the world adopt the "big pool" theory, relying on the younger generation to pay for the pensions of the previous generation. However, such a system has become unsustainable in the face of an aging population and a low birth rate. The CPF system emphasizes that individuals save for their own retirement and old - age care. During the long years of employment, individuals, employers, and the government each fulfill their responsibilities to build a safety net. This not only provides more security, but also as several generations of people have stably enjoyed the benefits of the system after retirement, the commitments of the system have been continuously implemented. People's trust has been consolidated through practice. With trust, the system can be improved and endure. Fulfilling commitments is precisely the secret to the longevity of the CPF and other systems in our country.
The CPF system covers multiple areas such as retirement protection, healthcare, and investment and wealth management. Different from the products of commercial institutions, the government must consider more comprehensively and meticulously, and the underlying calculation logic is much more complex than the systems of many countries. In the first two or three decades after the founding of the country, there were still doubts about the CPF system among the people. Rumors of opacity and even black - box operations, as well as various questions, never ceased. However, as the system has been operating steadily for many years, several generations of Singaporeans have benefited from it. Coupled with the generally improved education level of the people and the government's enhanced communication, relevant information has become more public, and the voices of doubt have significantly decreased. The image of the CPF at the grassroots level is becoming more and more similar to that of international professional institutions. In addition, no one who is eligible to receive CPF funds has failed to do so, which proves its reliability. One notable change is that in the past, many people tried to withdraw money from the CPF as soon as possible, but now, on the contrary, many people try to save as much money as possible in it to earn stable interest.
Over the long years, the people's confidence in the CPF system has been gradually established, which truly demonstrates that it is a good system worthy of being safeguarded. In the past, people's dissatisfaction or doubts stemmed from the fact that their average income was low, and a relatively high proportion of their income was locked up, which was indeed a painful experience. In the past, bank interest rates were also high, making the CPF less attractive in comparison. Now, the general trust of the people in the CPF system reflects that good long - term policies can stand the test of time, and it also takes time to show their true nature.
The CPF was initially designed solely for retirement purposes. In 1968, it was expanded to include home - buying, which was a major breakthrough, transforming it into a large - scale project for social stability. As Minister for Manpower Tan See Leng said in an interview, this is the wisdom and vision of the founding fathers. Owning property gives people a sense of stability. The people's ability to buy homes has promoted long - term social and political stability. In the CPF scheme, the government is responsible for management and protection without charging members fees. This is a major advantage compared to commercial companies. Moreover, the guaranteed minimum rate of return provided is not affected by market conditions, free from risks and disputes, reassuring the vast majority of members and being beneficial to the government's image in the long run.
The entire system is in line with the government's consistent style, keeping pace with the times. Based on predictions of the country's development process and the needs of the people, it is constantly updated. From the Workfare Income Supplement Scheme, the Silver Support Scheme to the recent legal guarantee for platform workers to join the CPF system, these are all efforts to continuously build a more complete life safety net.
For a long time, demands such as earlier withdrawal of more CPF deposits or an increase in interest rates must be considered in an overall context. Since the system is closely related to employers, any changes must take into account the balance of employees' long - term different needs and the long - term financial burden of employers. As the social and economic forms evolve more rapidly, the CPF system will inevitably need to continue to innovate and evolve in the future. However, any change should remain true to its original intention, safeguarding the bottom line of providing affordable housing and retirement protection for the vast majority of Singaporean residents. The CPF must always fulfill this commitment to its members. Otherwise, although a high - rise building may have been painstakingly constructed, it may still start to collapse from the cracks.
Behind the complexity of the CPF system reflects the government's thinking logic regarding the well - being of the vast majority of the people. Besides the need for old - age care, it also includes how to have a home to live in and even healthcare needs. This is a huge national savings plan involving the whole population. The government guarantees and continuously fulfills the system's commitments, with only one goal: to benefit every individual and family throughout their lives. As the interviewees said in a series of videos, for those who do not know how to manage finances, it provides basic lifelong protection for citizens. And those who are not good at or not interested in financial management may not be a small number in every society.
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