Why a universal pension scheme is not a good idea

Why a universal pension scheme is not a good idea.

The Silver Support Scheme will be a welcome relief to children of aged low-income parents, but should never be seen as a replacement for family support or reduce the need for people to save for their own retirement, says Ms Soh Swee Ping, 46, who heads the Council For Third Age (C3A) that encourages active ageing. She tells Walter Sim about issues the elderly face. 



Statistics show that each member of the bottom 20 per cent of retiree households (comprising solely non-working people aged 60 and above) spends $317 on a per month basis, and so any additional help will relieve their children's burden.

But it should not be a replacement. It should only supplement their children's help, because Singapore is an expensive society to live in, and so these are little things that help.

But having said that, the current cohort of seniors aged 65 and above faced very different situations in their early years.

Going forward, Singaporeans have been given the opportunity to be able to plan for the second half of our lives. And even if the country is helping the individual to be prepared, we should take our own responsibility to do so.

We are fortunate because we are quite a rich country and so our Government is able to afford it. But we cannot expect the Government to continue to do that.

First, it has got to do with the children's upbringing and what they view as respect and whether they should provide for their family. But the other thing is that sometimes they may want to chip in but are unable to do so due to their financial circumstances.

The question is whether it will be appropriate for us to have a universal pension scheme.

We all know that some countries - like the Scandinavian ones - are gradually reversing course because it is not sustainable.

So, no, we should never get into a universal pension scheme. We've seen what has happened in other countries, and we need to learn from their experiences.

Whether we're able to experience the same type of growth in the next 50 years, with the new global competitive environment, remains to be seen. So even if we can afford it, ultimately the citizen needs to have the tenacity and resilience to be able to want to provide for himself or herself.

Having some flexibility is good because there will never be a perfect solution for everyone - different people will face different issues.

Providing the flexibility - the Government has definitely heard the feedback of its people. Some may say that they want their money because their health is no good, and they don't see the point of keeping the cash locked up another 20 years because they won't get the chance to enjoy it.

So once you make your decision, it will affect future payouts, which is why I find it laudable that the Government has taken on some risks to assume that the individual will make prudent and responsible decisions.

But it also has to ramp up its communication efforts, that even though they have the flexibility, leaving the money in the CPF will still generate better and risk-free interest. Like any other government policy, a scheme - however good - will not have fulfilled its intent if the awareness creation and implementation is not done well.

I'm part of the PG task force and this is one of the important areas that was discussed. It was deliberate that the channels are wide- ranging because seniors probably need bite-sized information. They are only interested to hear what affects them directly.

I think the Government recognised that the communication of its intent and policies are crucial, otherwise people will view it only as a think-tank, the policymaker.

And if it is unable to communicate at the ground level how the scheme or the policy will actually help make a difference in a person's life, then as policymaker it will be a wasted effort.

It will be even more challenging to explain the more flexible CPF scheme because it affects the entire spectrum of the population. The Government will have to look at the different segments and target them differently.

Incentives such as the Special Employment Credit - which provides employers a wage offset for workers above 50 - will probably help because employers might feel they are taking a risk. You may have a very nice curriculum vitae (CV) with your expertise and experience but it's not tested by the new employer. These incentives would allow employers to be more open-minded.

But at the same time, mature workers must also prove they are open-minded, willing to learn new things and adapt to the new environment, get along with colleagues, and show that their insights and expertise can be of value to the company.

Because we hear employers say that some are difficult to handle, being fixed in their mindset, thinking they've done it all and so they don't need to be told what to do.

But with Singapore's ageing population, the earlier employers recognise that the labour market is changing and there will be more mature workers, the better it is for everybody. They have to embrace this workforce and work with them.

SkillsFuture is quite different - it's more skills-based. But for the lifelong learning that C3A focuses on, we want to promote learning for fun and learning to live well.

Otherwise you could think that "I learn to have a skill and the skill leads to employability" and then, if you don't get employed, you will be very discouraged.

But we say that learning can also be to help a person improve his well-being, not necessarily through employment.

The criteria isn't out yet. (But) if they use their SkillsFuture Credit to develop a skill like plumbing, out of interest, then that is learning to live, for enrichment and that's fine. There is a variety of courses out there for seniors. Even at 60 or 80, there may still be things they want to learn - like dancing or cooking - and not for a certification.

The C3A has an Inter-Generational Learning Programme in which students are paired up with the elderly and teach them courses like on Facebook, digital photography or public speaking. It has reached out to more than 2,500 elderly people so far.

We find that many young people, at the start, say they don't like to talk to seniors because they are very slow in learning and clumsy. Some are unkind and say that the seniors are stupid.

Sometimes the seniors may look a bit more stern and they dare not approach them. Or if the seniors speak a bit louder, the youth might think they are rude.

But after the programme they say that they are now more comfortable and can relate to the seniors better. They are also not afraid of approaching them to talk.

Likewise for seniors, some don't like to approach young people because the youth are seen to be impatient.

Sometimes when they are at home, if they are using the computer, their family will chastise them for pressing a button, saying things like "If you press that, everything will be gone". It gets discouraging and they lose their confidence.

When they come to a class and learn, this is one way stereotypes can be broken for both the youth and elderly.

(Going beyond the programme), teaching students these soft skills is very important. Otherwise when we see more seniors in the years to come and people harbour a very negative viewpoint towards them, can you imagine the type of society we will be living in?

There are four main issues - fear of the unknown; financial health; physical health; and loneliness.

Poor elderly people will feel finance is important, but for those well-to-do it might be something else like social support or connectedness.

But what is critical is a person's response to these challenges, and a positive mindset is very important. Not just that, but also the mental preparedness, contentment and gratitude for your lot in life.

These people want to live their life to the fullest, and usually they are the ones who see a purpose in what they are doing and tell themselves that they are privileged to be given these extra years.

Sometimes, I ask myself whether I can be as positive as some of them when I am at that age.

For different stages in our life, the difficulty lies in the transition phase. Now, if we live until 85 and if we retire at 65, we have 20 years. We hear people talking about the "challenges" of the elderly, but we must also look at the "potentials" and "opportunities" of longevity - not everybody will be given those extra 20 years.

We have an initiative called Kopi And Toast, in which a senior helps a senior on a one-on-one basis.

The mentor is "Kopi" and mentee is "Toast". The mentor is someone who has smoothly transited into the next phase of life, the mentee is someone who feels he needs more help. We encourage them to step out, telling them there are people who are willing to journey with them, help them discover interests they can develop.

The "Toast" is likely more introvert but after the six-month programme, some of them say they want to be "Kopi" because they have benefited from it and they want to help someone else.

I think that's very encouraging, and is a way we can get people to step up. Other ways would be to get the more extroverted friends to encourage their less active friends. And that's where the community and neighbourhood networks will be important. There will be situations where seniors don't want to go out no matter how you ask, but for these people there are initiatives where people visit them at their homes.

What we should be doing is to actually start preparing for the next phase of life early - maybe in the 40s or even in the 30s.

Unlike the baby boomers of the past when Singapore was still a developing country, we can now be better prepared for our future because we are better educated.

In life we prepare for many things - like exams in school or to go to university, to get a job - though we're not so conscious about it. But not many of us put in the same effort to plan for this next phase of our life.

If you calculate the number of years we spend in retirement and in our working life, you'll find that it is almost equal. Doesn't that tell us it's important to start preparing for it?

The Straits Times / Sat Special Report                            Published on Wednesday, 18 March 2015

By Walter Sim                                                                  waltsim@sph.com.sg