Wharton Pension Research Council Working Papers

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Working Paper

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National defined contribution pension systems have long been a mainstay of retirement income in Asia. One of the oldest and best known of these systems is the Singaporean Central Provident Fund, a mandatory retirement scheme managed by the central government for almost a half-century. With required contribution rates that have ranged up to 50%, this program has powerfully shaped asset accumulation patterns and housing portfolios. This paper explores how the structure and design of the Singaporean retirement and housing schemes influence wealth levels and asset mix at retirement. Our model indicates that outcomes rest critically on the interlinked national retirement and housing programs. We show that policies to enhance one program may boost retirement replacement rates but can also lower total wealth in unexpected ways. The lessons we draw may serve as guidance for other countries constructing a national defined contribution retirement system.


Singapore, retirement, defined contribution plans

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Copyright/Permission Statement

Opinions and conclusions are solely those of the authors. Copyright 2002 McCarthy, Mitchell, and Piggott.


The authors gratefully acknowledge financial support for this research provided by the Wharton-SMU Research Center at Singapore Management University, the Pension Research Council of the University of Pennsylvania, and the Australian Research Council. Without implicating them we acknowledge helpful comments and suggestions from Mukul Asher, Renbao Chen, Joseph Gyuorko, Marja Hoek-Smit, Chris Mayer, Phang Sock Yong, David Richardson, Todd Sinai, Thomas Snyder, Keith Swailes and Augustine Tan.

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Economics Commons



Date Posted: 20 August 2020