 Many support annuity exemption for the chronically ill
SINGAPORE : Many Singaporeans agree that it is good to exempt those with severe chronic illnesses from the compulsory annuity scheme.
They say it is only fair to exclude those who won't live long enough to benefit from a longevity insurance.
But the question is - just who qualifies as a chronically-ill person?
Experts say one in three Singaporeans is expected to get some form of cancer in their lifetime.
And one in four is already suffering from some kind of chronic illness.
So does this mean that there will be a big drop-out from the annuity scheme?
Annuity plans are currently not that popular.
Only about 4 percent of those who turned 55 have bought such a plan, also dubbed longevity insurance.
And with more people living longer, the Government wants to introduce a compulsory annuity scheme.
Under the proposal, those who turn 55 will have to use a small part of their CPF (minimum sum) savings to buy an annuity.
The plan will pay them a small monthly income of about $300, once their CPF minimum sum runs out, when they reach the age of 85.
But not everyone supports that idea.
Many argue that they may not live beyond 85 to enjoy the payout from the insurance.
They welcome Mr Lim Boon Heng's suggestion on Sunday that some groups be exempted from the compulsory scheme.
The Minister in Charge of Ageing Issues said those who have already bought an annuity plan, or are suffering from severe or chronic illnesses, may be excluded.
Madam Halimah Yacob, Chairman for Government Parliamentary Committe on Health, said: "The suggestion that those who are suffering from severe or chronic illnesses should be excluded is a practical one because we need to look at what is the objective of the scheme.
"And the objective is actually to help people take care of their retirement needs after the age of 85. So if there are Singaporeans who feel that their health condition is very poor, and they are not likely to benefit from the annuity, then I think it is truly practical to exclude them from the annuity scheme."
"On the other hand, issues that have to be considered is who is allowed to be exempted from the scheme because if too many are exempted from the scheme, then the base becomes smaller and there is the problem of the premiums becoming higher for everyone else."
Madam Halimah, who is currently in China, added that the big question then is - who should be exempted from the scheme?
The CPF Board currently lifts the minimum age rule on those who are certified by doctors to be so ill that their chances of recovery are very small.
It says: "To apply for early withdrawal of CPF, a CPF member, who is permanently disabled or has severe medical conditions that reduce his life expectancy, has to submit his application with a recent doctor's memo on his health status, to CPF Board.
"The Board will then obtain a medical report from his doctor or refer him to the Board's panel of doctors to assess his application.
"Eligible members can withdraw a lump sum only after setting aside sufficient funds for their medical and living expenses. Members who are terminally-ill can withdraw all their CPF savings from their Ordinary, Special and Retirement Accounts in one lump sum."
And for some who have a doctor's certification that they cannot work, they are also exempted. So they can withdraw their CPF money, regardless of their age.
So do not expect to be exempted from the compulsory annuity scheme if you are among the one million Singaporeans who suffer from chronic illnesses like stroke, diabetes, high blood pressure or high cholesterol.
You will need proper medical certification from the doctors that you are unlikely to benefit from the longevity insurance scheme.
Madam Halimah said: "It will not be easy, because who will be eligible to be exempted? Obviously that will be a major issue because first of all, how are you going to draw up the criteria and actual implementation of it."
Besides setting up clear criteria on who should be exempted, another challenge is making sure that the administration costs incurred remain low when someone applies to be exempted. - CNA/de | 
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