A CPF for tomorrow : critical analysis and suggestions
Singapore’s CPF stands out from other pension systems globally with its multifunctional withdrawals such as home and healthcare financing and policy measures such as minimum sum (aka Full Retirement Sum (FRS)) and withdrawal limits. Yet a worrying 50.6% of active contributors were unable to attain F...
| Main Authors: | , , |
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| Format: | Final Year Project (FYP) |
| Language: | English |
| Published: |
2015
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10356/62453 |
| _version_ | 1811696697762381824 |
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| author | Chua, Sunny Yong Hui Lui, Aaron Leong Kit Ang, Soon Tat |
| author2 | Sng Hui Ying |
| author_facet | Sng Hui Ying Chua, Sunny Yong Hui Lui, Aaron Leong Kit Ang, Soon Tat |
| author_sort | Chua, Sunny Yong Hui |
| collection | NTU |
| description | Singapore’s CPF stands out from other pension systems globally with its multifunctional withdrawals such as home and healthcare financing and policy measures such as minimum sum (aka Full Retirement Sum (FRS)) and withdrawal limits. Yet a worrying 50.6% of active contributors were unable to attain FRS for basic retirement. This paper examines possible behavioural biases and perceptions that may manifest within individuals to exploit well- intentioned pre-retirement withdrawals, hence resulting in insufficient retirement funds. Empirical survey of 196 respondents reveals that majority aspire to be self-sufficient for their retirement finances. Strong demonstration of present-bias behaviors suggest that opportunities for pre-retirement withdrawals such as housing are likely to result in suboptimal earlier withdrawals at expense of longer term payoffs. Many view CPF contributions as a loss and most perceive CPF as a property financing tool rather than a retirement tool, signifying diverging perceptions from CPF’s fundamental role. Policy re-framing is required if primordial retirement focus of CPF are to be reverted. CPF utilisation policies remains a foremost consideration in respondents instead of contribution rates in effecting behaviours. CPF home financing were found to be ‘sticky’ and inelastic towards contribution rate changes but displayed greater internalisation of housing costs when CPF home financing were disallowed, suggesting tweaks to usage allowance rather than contribution rates are more effective towards retirement adequacy. Drawing upon empirical insights, recommendations to strengthen the CPF would be proposed. |
| first_indexed | 2024-10-01T07:43:29Z |
| format | Final Year Project (FYP) |
| id | ntu-10356/62453 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T07:43:29Z |
| publishDate | 2015 |
| record_format | dspace |
| spelling | ntu-10356/624532019-12-10T12:07:21Z A CPF for tomorrow : critical analysis and suggestions Chua, Sunny Yong Hui Lui, Aaron Leong Kit Ang, Soon Tat Sng Hui Ying School of Humanities and Social Sciences DRNTU::Social sciences::Economic development::Singapore DRNTU::Social sciences::Economic theory::Microeconomics DRNTU::Social sciences::Economic theory::Macroeconomics DRNTU::Social sciences::Political science::Public administration::Asia::Singapore Singapore’s CPF stands out from other pension systems globally with its multifunctional withdrawals such as home and healthcare financing and policy measures such as minimum sum (aka Full Retirement Sum (FRS)) and withdrawal limits. Yet a worrying 50.6% of active contributors were unable to attain FRS for basic retirement. This paper examines possible behavioural biases and perceptions that may manifest within individuals to exploit well- intentioned pre-retirement withdrawals, hence resulting in insufficient retirement funds. Empirical survey of 196 respondents reveals that majority aspire to be self-sufficient for their retirement finances. Strong demonstration of present-bias behaviors suggest that opportunities for pre-retirement withdrawals such as housing are likely to result in suboptimal earlier withdrawals at expense of longer term payoffs. Many view CPF contributions as a loss and most perceive CPF as a property financing tool rather than a retirement tool, signifying diverging perceptions from CPF’s fundamental role. Policy re-framing is required if primordial retirement focus of CPF are to be reverted. CPF utilisation policies remains a foremost consideration in respondents instead of contribution rates in effecting behaviours. CPF home financing were found to be ‘sticky’ and inelastic towards contribution rate changes but displayed greater internalisation of housing costs when CPF home financing were disallowed, suggesting tweaks to usage allowance rather than contribution rates are more effective towards retirement adequacy. Drawing upon empirical insights, recommendations to strengthen the CPF would be proposed. Bachelor of Arts 2015-04-07T12:08:24Z 2015-04-07T12:08:24Z 2015 2015 Final Year Project (FYP) http://hdl.handle.net/10356/62453 en Nanyang Technological University 93 p. application/pdf |
| spellingShingle | DRNTU::Social sciences::Economic development::Singapore DRNTU::Social sciences::Economic theory::Microeconomics DRNTU::Social sciences::Economic theory::Macroeconomics DRNTU::Social sciences::Political science::Public administration::Asia::Singapore Chua, Sunny Yong Hui Lui, Aaron Leong Kit Ang, Soon Tat A CPF for tomorrow : critical analysis and suggestions |
| title | A CPF for tomorrow : critical analysis and suggestions |
| title_full | A CPF for tomorrow : critical analysis and suggestions |
| title_fullStr | A CPF for tomorrow : critical analysis and suggestions |
| title_full_unstemmed | A CPF for tomorrow : critical analysis and suggestions |
| title_short | A CPF for tomorrow : critical analysis and suggestions |
| title_sort | cpf for tomorrow critical analysis and suggestions |
| topic | DRNTU::Social sciences::Economic development::Singapore DRNTU::Social sciences::Economic theory::Microeconomics DRNTU::Social sciences::Economic theory::Macroeconomics DRNTU::Social sciences::Political science::Public administration::Asia::Singapore |
| url | http://hdl.handle.net/10356/62453 |
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