ALTERNATIVE SOCIAL SECURITY SYSTEMS : WHAT CAN WE LEARN?

Abstract

Social security systems throughout the world are increasingly becoming the centre of attention as the world population continues to age. This is due to increasing longevity with advances in medical science, rising standards of living and a decline in the fertility rate, especially among the more developed and advanced countries. The question of how to provide for the elderly in their retirement and old age thus becomes an important one. Using the social security systems of Chile, Australia and Singapore, which are all defined contribution provident funds, a comparative study is attempted and evaluated with respect to the World Bank's recommendations for social security as well as other criteria. It was found that each system had strengths and weaknesses in different areas. In comparing with Singapore, the study reveals that privatisation might not bring about an improvement for its system nor is it a necessary step in the evolution of social security systems. Singapore's CPF system is highly successful and there seems no need for major reforms if there is continual revision of the system, especially in the areas of flexibility, transparency and returns. As Singapore becomes more affluent, the Public Assistance programme should also be improved to provide more financial assistance to the needy. The study also shows that the multi-pillar system advocated by the World Bank need not necessary apply to Singapore strictly. By highlighting the strengths and weaknesses of the Chilean, Australian and Singaporean systems, this Academic Exercise hopes to provide a better insight into the workings of defined contribution systems and how to improve on Singapore's Central Provident Fund.