Retirees' lifestyle may put strain on govt

LOCALLY-CONDUCTED research has warned of a significant disparity between what Bruneians earn whilst employed and what they will receive following retirement.

When the pensions of the first members under the Employees' Trust Fund (TAP) reach maturity in 2023, many new retirees, especially those in low income groups, may find it difficult to adjust to a lowered standard of lifestyle. A series of surveys undertaken by Universiti Brunei Darussalam on a sample of 90,000 'Tabung Amanah Pekerja' (TAP) members in 2006 suggest that there will be an extreme disparity between pre and post retirement income, based on the current TAP contribution rate of 10 per cent.

"This presumes that TAP is all the new retirees will have," said Dato Paduka Hamdillah Awg Hj Abdul Wahab, the Deputy Minister of the Industry and Primary Resources.

He cited results from the study which implied that 50 per cent of TAP members feel that TAP "is their only salvation during retirement".

Quoting Donald Trump and Robert Kiyosaki in their recent publication: Why We Want You to be Rich, Dato Hamdillah said: "The greatest fear in America in 2006 is running out of money during retirement and that 80 per cent of the baby-boom generation may not have enough wealth to fall back on."

"Like the US, Brunei also faces impending challenges for our bulging new retirees," he said. Brunei's early retirement age of 55, coupled with a rise in the life expectancy, will place "government resources" under strain in future, he added.

Dato Hamdillah pointed out that the retirees will be dependent on the government's social services, in order to sustain the benefits and standard of living they will have become accustomed to.

"That is a compelling case for speeding up our economic diversification agenda through business expansion and more direct contribution from our private sector."

He was speaking as the guest of honour at a roundtable session yesterday morning on social security at the Centre for Strategic and Policy Studies (CSPS). Outcomes recorded from the session will be made the basis for the finalisation of the research paper on TAP policies.

The Brunei Times