Singapore's Pension System: Challenges and Reform Options

Singapore has evolved from a low-to-middle-income country to a high-income country in a relatively short period. Singapore's economic success notwithstanding, several factors suggest that policymakers should focus more on promoting the equity and sustainability of the country's current pension arrangements. Concern about congestion externalities—particularly in transport, housing, and recreational facilities—and competition for positional goods—such as cars, housing, and education—have also become an integral part of the political and social discourse in Singapore.

The chapter is organized as follows: The next section briefly discusses demographic and labor market trends and is followed by a section that discusses the main characteristics of Singapore's pension system. The subsequent section provides an assessment of the equity and sustainability of the pension system, with a discussion of possible initiatives such as implementing social pensions.