IDEAS home Printed from https://ideas.repec.org/a/cup/jpenef/v2y2003i01p41-65_00.html
   My bibliography  Save this article

Life annuities of compulsory savings and income adequacy of the elderly in Singapore

Author

Listed:
  • CHIA, NGEE CHOON
  • TSUI, ALBERT K. C.

Abstract

Singapore has a publicly managed central provident fund (CPF) system, which is compulsory and based on individual accounts with an explicit link between contribution and benefits. This paper assesses the adequacy of the CPF saving to meet the retirement needs of the elderly in Singapore. Instead of emphasizing the mechanism of accumulation, we focus on the expenditure side of the lifetime budget of the elderly and estimate the present value of retirement consumption (PVRC). The estimated PVRC is obtained by simulations through three major components: calibration of subsistence and medical expenses of the elderly; forecast of cohort survival probability by age and by sex; and generation of yield curves to discount the future cash flows. Our results indicate that the existing CPF-decreed minimum sum is inadequate to meet the future consumption needs of the female elderly. The inadequacy becomes more severe when medical expense is set at higher growth rates. Moreover, the monthly payouts of a single premium deferred annuity are computed as illustrative examples.

Suggested Citation

  • Chia, Ngee Choon & Tsui, Albert K. C., 2003. "Life annuities of compulsory savings and income adequacy of the elderly in Singapore," Journal of Pension Economics and Finance, Cambridge University Press, vol. 2(1), pages 41-65, March.
  • Handle: RePEc:cup:jpenef:v:2:y:2003:i:01:p:41-65_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1474747203001239/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Brown, Alessio J.G. & Orszag, J. Michael & Snower, Dennis J., 2008. "Unemployment accounts and employment incentives," European Journal of Political Economy, Elsevier, vol. 24(3), pages 587-604, September.
    2. Impavido, Gregorio & Thorburn, Craig & Wadsworth, Mike, 2004. "A conceptual framework for retirement products : Risk sharing arrangements between providers and retirees," Policy Research Working Paper Series 3208, The World Bank.
    3. Chia, Ngee-Choon & Tsui, Albert K.C., 2005. "Medical savings accounts in Singapore: how much is adequate?," Journal of Health Economics, Elsevier, vol. 24(5), pages 855-875, September.
    4. Meritxell Solé & Guadalupe Souto & Concepció Patxot, 2019. "Sustainability and Adequacy of the Spanish Pension System after the 2013 Reform: A Microsimulation Analysis," Hacienda Pública Española / Review of Public Economics, IEF, vol. 228(1), pages 109-150, March.
    5. Stefan Fölster & Robert Gidehag & Mike Orszag & Dennis J. Snower, 2003. "Health Accounts and Other Welfare Accounts," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 1(3), pages 09-14, October.
    6. Ngee-Choon Chia & Albert K C Tsui, 2005. "Reverse Mortgages as Retirement Financing Instrument : An Option for “Asset-rich and Cash-poor†Singaporeans," Finance Working Papers 22566, East Asian Bureau of Economic Research.
    7. Ngee-Choon Chia & Albert K C Tsui, 2009. "Monetizing Housing Equity to Generate Retirement Incomes," Microeconomics Working Papers 22759, East Asian Bureau of Economic Research.
    8. Ngee-Choon Chia & Albert K C Tsui, 2005. "Reverse Mortgages as Retirement Financing Instrument: An Option for “Asset-rich and Cash-poor” Singaporeans," SCAPE Policy Research Working Paper Series 0503, National University of Singapore, Department of Economics, SCAPE.
    9. Sogunro Ashim Babatunde & Adeleke Ismaila Adedeji & Ayorinde Richard Olusegun, 2019. "An assessment of adequacy of pre-retirement savings for sustainable retirement income under the Nigerian 2014 pension scheme," Journal of Economics and Management, Sciendo, vol. 35(1), pages 150-171, March.
    10. Chia, Ngee-Choon & Tsui, Albert K.C., 2005. "Medical savings accounts in Singapore: how much is adequate?," Journal of Health Economics, Elsevier, vol. 24(5), pages 855-875, September.
    11. Garcia Huitron, Manuel & Ponds, Eduard, 2016. "Participation and Choice in Funded Pension Plans : Guidance for the Netherlands from Worldwide Diversity," Other publications TiSEM 5351a381-f866-4566-82d8-9, Tilburg University, School of Economics and Management.
    12. Hess, David & Impavido, Gregorio, 2003. "Governance of public pension funds : lessons from corporate governance and international evidence," Policy Research Working Paper Series 3110, The World Bank.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jpenef:v:2:y:2003:i:01:p:41-65_00. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/pef .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.