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UNCLAS SECTION 01 OF 02 SINGAPORE 001017 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MTS 
DEPT PASS DOL - FOR IAB AND OSEC 
DEPT ALSO PASS USTR FOR KARESH, ROSENBERG STRATFORD AND LEE 
TREAS FOR OASIA/ISA-CUSHMAN AND RAND 
USDOC FOR 4420/ITA/MAC/MCQUEEN AND DAS KASOFF 
 
E.O. 12958: N/A 
TAGS: ELAB PREL PGOV OVIP SN
SUBJECT: SECRETARY OF LABOR CHAO MEETS SINGAPORE ACTING 
MINISTER OF MANPOWER GAN KIM YONG, AUGUST 29, 2008 
 
  (U) This cable is Sensitive but Unclassified.  Please 
protect accordingly. 
 
¶1. (U) August 29, 2008; 3:00 P.M.; Ministry of Manpower. 
 
¶2. (U) Participants 
 
United States 
 
Secretary of Labor Elaine L. Chao, 
Ambassador Patricia L. Herbold, 
Associate Deputy Secretary of Labor Anna Hui, 
Dr. James Chao, 
Alden Sanborn, Special Assistant to the Secretary, and 
Senior Political Officer Dan Jassem (note-taker) 
 
Singapore 
 
Acting Minister of Manpower Gan Kim Yong, 
Leo Yip, Permanent Secretary, Ministry of Manpower, 
Ong Ye Kung, Chief Executive, Workforce Development Agency, 
Ng Cher Pong, Division Director, Workplace Policy and 
Strategy, 
Tay Choon Hong, Deputy Director, Manpower Planning and Policy, 
Chng Yi Ken, Manager, Manpower Planning and Policy, and Lim 
Choong Leng, Senior Manager, International Relations Unit 
(note-taker.) 
 
Summary 
------- 
 
¶3. (SBU) The United States and Singapore both face the 
challenge of an aging population, Secretary of Labor Chao 
noted in a meeting with the Acting Minister of Manpower Gan 
Kim Yong on August 29.  Gan said Singapore is revamping its 
mandatory retirement account system to include a portion that 
will require workers, funds to be pooled.  Acting Minister 
Gan suggested that the best system would be one that took 
advantage of both individual and pooled accounts.  Ministry 
of Manpower staff gave Secretary Chao a briefing on 
Singapore's plans and programs to meet the labor market's 
challenges.  End Summary. 
 
An Aging Population 
------------------- 
 
¶4. (SBU) In an August 29 meeting with Acting Minister of 
Manpower Gan Kim Yong, Secretary Chao praised Singapore's 
emphasis on skilled manpower training and suggested that the 
United States and Singapore could exchange ideas on the 
subject.  Secretary Chao also suggested that both Singapore 
and the United States face similar challenges in managing a 
graying population base.  Secretary Chao noted with concern 
that in the United States, the first wave of "baby boomers" 
would start to retire next year and that the subsequent large 
increase in retirees would put the U.S. Social Security 
system under a great deal of strain.  In response, Acting 
Minister Gan highlighted Singapore's dual problem of an aging 
population base and a fertility rate that is below 
replacement level; resulting in the need for a steady influx 
of foreign workers to maintain Singapore's economy. 
 
¶5. (SBU) Secretary Chao inquired about Singapore's efforts to 
manage its aging population challenge.  Gan replied that 
while Singapore already has a mandatory retirement account 
that all workers and employers pay into, the government feels 
that the current system is inadequate.  The continued rise in 
average life expectancy (it is now over 80 years of age) is 
leading to older retirees essentially running out of 
benefits, Gan asserted. (Note: workers are required to put 20 
percent, and their employers 13 percent of a worker's salary, 
into the government's retirement account, the Central 
Providence Fund - CPF.  The fund investments are individually 
owned by workers, and can be accessed after they reach 55 
 
SINGAPORE 00001017  002 OF 002 
 
 
years of age.  End Note). 
 
¶6. (SBU) Acting Minister Gan then described Singapore's plan 
to revamp the Special Account portion (the retirement 
account) of the CPF, by shifting the present focus away from 
individually-owned retirement accounts (for contributions 
made after 55 years of age) towards a common pool.  (Note: 
The CPF has three accounts: the Ordinary Account ) the funds 
in this account can be used to purchase a home, fund 
education or fund an investment; the Special Account ) funds 
can be used for retirement; and the Medisave Account ) funds 
can be used to cover medical expenses.  End Note.)  Gan noted 
that while under the current system, beneficiaries can pass 
any unused benefits on to their descendants, in many cases 
longer-lived retirees, benefits will run out.  Under the new 
system, retirees would receive benefits until death. 
However, under the new system, the unused benefits of 
deceased retirees would no longer pass on to their heirs. 
 
¶7. (SBU) Secretary Chao suggested that while Singapore 
appears to be going away from individually-owned retirement 
accounts, the United States is exploring moving in the 
opposite direction.  Gan replied that a balance is needed 
between individually-owned accounts and pooled accounts, and 
noted that the new changes to the CPF would only cover the 
Special Account portion (the retirement account) of the CPF 
and that the changes would only affect contributions made 
after a worker turned 55 years old, meaning that any 
contributions made prior to turning 55 would still be owned 
by the individual. 
 
Briefing on Strategies to Manage Manpower Challenges 
--------------------------------------------- 
 
¶8. (SBU) The MOM staff gave Secretary Chao a presentation 
that highlighted Singapore's strategies to deal with its 
manpower challenges.  The staff touched on Singapore's labor 
market trends, including its robust job creation, almost full 
employment and the need for a steady influx of foreign 
talent.  The staff reviewed how the government, industry and 
publicly-funded universities work together to ensure that the 
right mix of critically needed graduates enters the job 
market.  The staff described in detail Singapore's continuing 
education and training plans and programs, with a focus on 
the development of national standards for needed skills. 
Lastly, the staff gave an overview of Singapore's programs to 
assist and retrain lower income and older workers. 
 
¶9. (U) Secretary Chao's party cleared this message 
 
Visit Embassy Singapore's Classified website: 
http://www.state.sgov.gov/p/eap/singapore/ind ex.cfm 
HERBOLD