Former National Wages Council Chairman Lim Chong Yah calls CPF annuities “meaningless”

In an interview with Channel News Asia, former National Wages Council Chairman and economist Professor Lim Chong Yah aired his disagreements about the CPF scheme as it stands, stating that the CPF scheme “may not be that satisfactory as a real pension programme because the sum for quite a lot of people would be still very, very minuscule; very, very small to take care of their old age.”

When prodded about his ideas to improve the scheme, he said, “It’s still too early. I am still contemplating, studying the best possible option, being quite unhappy that the annuities are still very, very low for a large number of people. They can be just quite meaningless.”

Prof Lim further added that his views on the CPF scheme had garnered attention from the government. When he was about to publish the CPF Study Group Report in the 1980s, Prof Lim  received a phone call from a minister asking him to reconsider publishing the report: “Yes, I couldn’t understand it myself. Why one minister rung me up and said it’s better not to publish the report. I couldn’t understand…one minister passed the buck to another minister, another minister passed the buck to another minister. I decided just to publish it, as a special volume of the Singapore Economic Review publication, because I was the editor and it was a publication of the Economic Society of Singapore.”

A champion of minimum wage, Prof Lim has not been one to shy away from airing his views on how such a scheme should be implemented in Singapore: “My intention is to have growth with equity, which is to have inclusive growth. In technical terms, the Gini coefficient, which is used to measure income inequality, should not be allowed to deteriorate too much.”

Prof Lim recognises that the government has taken measures to transfer incomes to aid lower-income groups. In spite of this, he flags low compliance of companies to follow the flexible wage guideline system as a problem: “That is the problem. The problem of implementation. The compliance rate is very low. That’s why I came up with the minimum wage proposal.”

The Singapore government has been vocal against minimum wage schemes. Prof Lim says, “I hope the Government would change its mind. I still think we should have it.”