Parliamentary Replies

Date: 20 January 2015

Parliamentary Question by Mr Yee Jenn Jong:

To ask the Deputy Prime Minister and Minister for Finance whether the availability of corporate retirement plans will be widened, given the low level of such plans in Singapore which contributes to Singapore's low score on retirement adequacy in the Mercer Melbourne Global Pension Index.

Reply by Senior Minister of State for Transport and Finance Josephine Teo:

Mr Yee may be under the impression that a low level of corporate retirement plans had led to a low score for Singapore in the Mercer Melbourne Global Pension Index.

Singapore was ranked ahead of other Asian countries as well as developed countries such as Germany and the US in this study^[1]. Mercer described our system as one with “a sound structure, with many good features, but has some some areas for improvement.”

Given that employers in Singapore make mandatory contributions to their local employees’ Central Provident Fund (CPF) savings, the observation in the study about corporate retirement plans is relevant mainly to foreigners working here, for whom the CPF is not applicable.

The Income Tax Act already provides tax deductions to employers if they wish to provide corporate retirement plans for all of their employees, including foreigners. In addition, foreigners who wish to save on their own may tap on the Supplementary Retirement Scheme, or SRS. They will enjoy tax benefits on the SRS contributions they make. We will continue to review the SRS scheme from time to time.

For the majority of Singaporeans, the CPF remains at the core of our social security system. Beyond mandatory contributions, both individuals and employers can make voluntary contributions to the CPF accounts and enjoy tax benefits. For the less well-off, the Government provides support through top-ups to their CPF accounts, such as through Workfare and housing grants, and the enhanced interest scheme.

^[1] Melbourne Mercer Global Pension Index, 2014