Singapore

Singapore comprehensive cradle-to-grave asset building system has been described by experts like Michael Sherraden as "probably the most innovative in the world." This approach is likely one of the reasons for Singapore's 90 percent homeownership rate and strong emphasis on educational attainment.

Upon the birth of their first to fourth child, Singaporean parents receive a "baby bonus" cash grant from the government which is directly deposited into a Children's Development Account. Families can make additional contributions into these accounts and-for the second, third, and fourth child-have these savings matched. These accounts can be used for child care or early education expenses for any of the parents' children. If any funds remain in the account when the child reaches age 8, these funds are then transferred to an EduSave Account, which gets annual contributions from the government as well as merit-based scholarships and grants. These accounts can be used for primary, secondary, or tertiary educational expenses or be rolled over into the accountholder's Central Provident Fund, which is saved in throughout a person's adult life. The Central Provident Fund (CPF) is primarily for retirement, although can be used for a variety of asset-building purposes. Employees contribute a mandatory percentage of their income into these accounts which, along with a set employer match is allocated into three different accounts-the Medisave Account for medical insurance and other related expenses, the Ordinary Account for home purchase, life insurance, and higher education for either the accountholder or a child, and the Special Account for retirement savings.

While indeed successful, these programs differ from many Western asset building initiatives in two ways. First, some of the programs which focus on children have the primary aim of increasing fertility rates, rather than alleviating poverty. Second, the Central Provident Fund's compulsory nature is more of a "top-down" approach to asset building than initiatives in the United States and some other Western countries.

MORE INFORMATION ON THESE TOPICS ON ASSETBUILDING.ORG:

Children's Development Accounts

Summary of Children's Development Accounts

EduSave Accounts

Summary of EduSave Accounts

Central Provident Fund

Summary of the Central Provident Fund

Retirement Financing in Singapore
By Mukul Asher, June 2004

Asset Rich and Cash Poor: Retirement Provision and Housing Policy in Singapore
By David McCarthy, Olivia Mitchell, and John Piggott, November 2002