Got Minimum Sum But No Minimum Wage. FAIR?

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An honorable member of the Coffee Shop Has Just Posted the Following:

Minimum Sum and minimum wage

May 28th, 2014 | Author: Contributions

As an effort to ensure that CPF members have sufficient savings to support a basic standard of living during their retirement, the Singapore government has set up the Minimum Sum Scheme in 2003.
With this Scheme, the members are required to leave a Minimum Sum in their CPF accounts at the age of 55. In return, from the drawdown age, they will receive monthly pay-outs which are designed to last for about 20 years. Alternatively, members may participate in CPF LIFE or buy approved life annuities with their Minimum Sum to give them a guaranteed income for life. The Minimum Sum is also adjusted over the years to account for inflation.
From 1 July 2014, the Minimum Sum will be S$155,000 which applies to members who turn 55 between 1 July 2014 and 30 June 2015. Under the CPF LIFE Standard Plan, setting aside S$155,000 at the age 55 provides a lifelong pay-out of about S$1,200 per month.
Since the government recognises that for retirees to maintain a basic standard of living, they need a minimum monthly income. It is puzzling why after more than a decade of setting up the Minimum Sum Scheme, the government has not set up a similar scheme for workers who need to do likewise. For the retirees, the minimum monthly income is provided for with the monthly pay-out from the Minimum Sum. So, the minimum monthly income required to maintain a basic standard of living is known already.
Why not set up a Minimum Wage Scheme for low wage workers such that the minimum monthly wage equals the monthly pay-out?

TW

* Submitted by TRE reader.


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