Pioneer Generation Fund liabilities exceed balance by nearly S$785 million
A parliamentary committee report also found that the S$10 billion Future Energy Fund has yet to make any expenditure. The fund could support nuclear power infrastructure if Singapore decides to deploy nuclear energy, says the government.
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SINGAPORE: The estimated liabilities of the Pioneer Generation Fund exceeded its balance by nearly S$785 million (US$613 million) as at the end of the financial year on Mar 31, 2025, according to a report by a parliamentary committee looking at the government’s annual revenue and expenditure estimates
The report by the Estimates Committee, released on Wednesday (Aug 12), also highlighted that the S$10 billion Future Energy Fund has yet to make any expenditure and could be used to support nuclear power infrastructure if Singapore decides to deploy nuclear energy.
The committee, comprising eight Members of Parliament, is tasked to report what economies, improvements in organisation, efficiency or administrative reforms may be effected in the government’s budget.
PIONEER GENERATION FUND
The Pioneer Generation Fund was set up in 2014 to fund the Pioneer Generation Package, which includes financial assistance for Singaporeans born on or before Dec 31, 1949, and who acquired citizenship on or before Dec 31, 1986.
In its report – presented to Parliament on Tuesday – the Estimates Committee said it had asked the Ministry of Finance (MOF) to clarify issues relating to the sustainability of the Pioneer Generation Fund, including expected investment returns, future drawdown profiles and whether further top-ups to the fund are needed.
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MOF said that the government does not seek to exactly match liabilities on a yearly basis due to the long-term nature of the fund. Instead, it said it would regularly review the estimated liabilities and trends of use to ensure the sufficiency of the fund, and would top up the fund when needed to honour commitments to the Pioneer Generation seniors.
The committee noted in its report that the fund would need to be topped up further, as its estimated liabilities – amounting to S$5,958,895,163 – currently exceed its balance of S$5,174,233,768.
It also noted the government’s commitment to topping up the fund where necessary to “honour commitments made to Singaporeans”.
Besides the Pioneer Generation Fund, the committee also looked at the Merdeka Generation and Majulah Package Funds in its report.
On the impact of healthcare inflation on the long-term sustainability of the Pioneer Generation and Merdeka Generation Funds, MOF said that the government regularly reviews subsidy and payout levels to ensure sufficient coverage against rising healthcare costs.
As of Mar 31, 2025, around 450,000 seniors had benefited from the Pioneer Generation Package, with a current surviving cohort of around 300,000 seniors. The average amount received per person was about S$11,800.
“Given that these Funds are lifetime commitments to their respective beneficiaries, the Committee urged the Government to continue monitoring the sustainability of all three Funds and to continue reviewing subsidy and payout levels under these Funds to ensure that they provide adequate coverage against rising healthcare costs,” said the Estimates Committee in its report.
It also said that any significant findings arising from the government’s regular reviews of each fund’s planning assumptions and projections could be shared with Parliament to “ensure prudent planning and intergenerational fiscal balance over successive terms of governments”.
FUTURE ENERGY FUND
Set up in 2024, the Future Energy Fund aims to support infrastructure investments for Singapore’s energy transition so as to decarbonise and safeguard the country’s energy security.
It was designed to ensure that the government can provide financial support for energy transition projects that may involve nascent technologies or require significant upfront capital expenditure.
The fund started with an initial injection of S$5 billion. A year later, the government topped up the fund by S$5 billion, bringing the total to S$10 billion.
MOF informed the Estimates Committee that no expenditure has been made from the Future Energy Fund so far, but that a “drawdown will occur in the coming years after careful consideration of the viability, reliability and cost-effectiveness of the energy pathways”.
MOF said that the fund could be used to support the infrastructure for a nuclear power programme, should Singapore eventually decide to deploy nuclear energy.
The fund could be used to “support the construction, improvement, extension, replacement, acquisition or leasing of infrastructure or property for low-carbon energy projects, as well as feasibility studies or site surveys in preparation for projects involving such infrastructure”, added MOF.
However, Singapore has not decided to deploy or pilot nuclear energy, said MOF.
The ministry said the Future Energy Fund will not be used for the first phase of an assessment by the International Atomic Energy Agency on Singapore’s nuclear readiness and no decision has been made to deploy or pilot nuclear energy.
NATIONAL PRODUCTIVITY FUND
The National Productivity Fund (NPF), established in 2010, was created to enhance productivity and support continuing education initiatives at the national and sectoral levels. In 2023, its mandate was expanded to include investment promotion.
The Estimates Committee noted that the government had announced a S$3 billion top-up to the fund in Budget 2025, following top-ups of S$2 billion in Budget 2024 and S$4 billion in Budget 2023.
As at Mar 31, 2025, a total of S$10.5 billion had been contributed to the fund, with a planned S$6 billion top-up in the 2026 financial year.
The committee asked MOF about the investment strategy for undisbursed monies, the projects and programmes funded, the benefits reaped, as well as the fund’s contribution to Singapore’s labour productivity and economic development.
Noting that the projected disbursements in the financial years of 2025 and 2026 – at S$4 billion and S$3 billion respectively – are higher than the typical amounts disbursed in 2024 and earlier, the committee asked if there had been an underutilisation of the fund.
In response, MOF said that the amounts disbursed in the 2024 financial year and earlier do not include disbursements for investment promotion projects.
It added that before the fund’s mandate was expanded to include investment promotion as a supportable activity in 2023, the fund had been used “in accordance with its prevailing mandate to fund projects driving productivity growth and supporting Continuing Education and Training efforts”.
“Since FY2023, the Government has been setting aside monies in the NPF in anticipation of investment promotion activities and
other supportable activities, reflecting forward planning rather than underutilisation.”
Source: CNA/dy(ac)
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