Pension reform in an affluent and rapidly ageing society: The Singapore case

Abstract

This paper analyzes the pension system of an affluent and rapidly ageing city-state of Singapore. The decision to predominantly rely on a single mandatory savings pillar instead of constructing a multi-tier system has resulted in an inadequate, and inequitable system of financing retirement. These limitations have been exacerbated by the weaknesses in the governance structure of the Central Provident Fund (CPF). The paper suggests establishing of Pensions Authority to help develop a multi-tier pensions system; and to require the CPF Board to bring its governance practices in line with international best practices. These changes will require a shift from current mono-centric to a poly-centric power structure in Singapore, prospects for which are not encouraging.