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Written Answer by Mrs Josephine Teo, Minister for Manpower, to PQ on Max Age Cap for DPS

Employment practices

NOTICE PAPER NO. 1733 OF 2019 FOR THE SITTING ON 12 JULY 2019
QUESTION NO. 2932 FOR ORAL ANSWER

MP: ER DR LEE BEE WAH

To ask the Minister for Manpower (a) when will the next review of the maximum age cap for coverage under the Dependants' Protection Scheme be; and (b) whether the Ministry has considered that the current generation is starting families at a later age and hence may still have dependants at age 60.

Answer

  1. The Dependants’ Protection Scheme (DPS) is a term-life insurance scheme that provides CPF members and their family a basic level of financial relief at affordable premiums in the event of terminal illness, total permanent disability or death.
  2. The decision to offer DPS coverage up till 60 strikes a balance between providing insurance protection for the member’s dependants and his need for adequate retirement savings:
    • First, raising the maximum coverage age beyond 60 would result in significantly higher premiums due to higher mortality rates after age 60. DPS premiums are paid out of members’ CPF accounts, and paying for significantly higher premiums would compromise members’ retirement adequacy.
    • Second, after age 60, the need for DPS is significantly reduced as most members are less likely to have children who are financially dependent. Those who started families later and may still have dependants are likely to have accumulated savings in their CPF accounts which could be bequeathed to their dependants.
  3. Members who prefer additional insurance protection may use cash to purchase insurance products from private insurers.
  4. We will, however, continue to review other aspects of the scheme to ensure that DPS continues to be relevant to members.