Size of home and productivity

Lucky Tan discuss the size of a home in Singapore and our productivity
http://singaporemind.blogspot.com/2012/04/singapore-homes-shrink-and-so-will-our.html

Kidnap of children

There is increased fear about the kidnap of children in Singapore. While some children may be kidnap for ransom, the bigger danger is that the toddlers may be taken away, never to be seen again. They may be given away as adopted children or, much worse, may be harmed in serious ways.

Read this report:
http://www.todayonline.com/Singapore/EDC120331-0000063/Kidnap-rumours--PCF-staff-to-be-vigilant

We should consider some possible ways to address this issue:
a) Use technology to locate children who are lost (similar to technology to locate a stolen car)
b) Use technology to identify a toddler or a child who may be lost from the parent (similar to tagging a pet?)
c) Set up a website for missing people so that the public can check against children or people who appeared to be "lost"

Any suggestions to deal with this matter?

Importance of Expectations

Read this article about the flaws in the education system in Singapore
http://singaporemind.blogspot.com/2012/03/importance-of-expectations-in-education.html

I prefer the egalitarian system used in Finland. It is nice to have an environment where students help each other to learn, rather than compete against each other. 

No fault insurance

Motor insurance in Singapore is complicated. In case of an accident, there is usually a dispute on the party at fault. It  can be protracted and frustrating to all parties. The lawyers come in and legal expenses are incurred.

To overcome this situation, some countries have introduced a "no fault system". It has its advantages and disadvantages. I believe that, on balance, it is better to introduce a "no fault system" in most countries. It simplifies matters and reduces cost. The disadvantage is that some people may be inclined to be careless, but they can be dealt with through other means.

Here is an explanation about the "no fault system" taken from Wikipedia.

In its broadest sense, "no-fault insurance" is a term used to describe any type of insurance contract under which insureds are indemnified for losses by their own insurance company, regardless of fault in the incident generating losses. In this sense, it is no different from first-party coverage. However, the term no-fault is most commonly used in the context of state/provincial automobile insurancelaws in the United States, Canada, and Australia, in which a policyholder (and his/her passengers) are not only reimbursed by the policyholder’s own insurance company without proof of fault, but also restricted in the right to seek recovery through the civil-justice system for losses caused by other parties.
No-fault insurance has the goal of lowering premium costs by avoiding expensive litigation over the causes of accidents, while providing quick payments for injuries or loss of property. The victim's insurance company would only pay out the claim, while the driver-at-fault's insurance company would pay out a claim and charge that party a higher insurance premium as they are now higher risk. While this may disadvantage the victim's insurance company, as the at-fault driver's insurance company can recoup the claims quicker through raised premiums, accidents happen between drivers of both insurance companies with an equal chance of drivers from both sides being at fault, so this in theory should even out.

Critics of no-fault argue that it does not punish reckless or negligent drivers sufficiently, with only raised premiums and a higher risk rating, and no jury awards or legal settlements. Detractors of no-fault also point out that legitimate victims with subtle handicaps find it difficult to seek recovery under no-fault. In response, proponents of no-fault insurance point out that automobile accidents are inevitable and that at-fault drivers therefore should not necessarily be punished; moreover, they note that the presence of liability insurance insulates reckless or negligent drivers from financial disincentives of litigation.

Also supporting no-fault insurance, in regions with high numbers of uninsured motorists, at-fault parties are often “judgment proof” (i.e., unable to pay their liability damages) in any case. Another criticism is that some no-fault jurisdictions have among the highest automobile-insurance premiums in the country, but this may be more a matter of effect than cause (i.e., the financial savings from no-fault may simply make it more popular in areas with higher automobile-accident risk). Furthermore, no-fault systems often grant "set" or "fixed" compensation for certain injuries regardless of the unique aspects of the injury or the individual injured. Workers compensation funds typically are run as "no fault" systems with usually a fixed schedule for compensation for various injuries.

Make it easier to submit income tax returns

Sent to Straits Times Forum Page on 24 March 2012

I want to thank the Inland Revenue Authority for making it easy

for taxpayers to submit their income tax returns.

I hope that the Authority can continue to simplify the submission in the

following areas:

a) Make it possible for the taxpayer to view the details of the 

remuneration that have been submitted by their employer or other

paying party. Where the details have not been submitted, show 

a remark "not yet received". This allows the taxpayer to know that 

the remuneration will be provided directly by these parties.

b) Allow individual taxpayers the option to claim for repairs, maintenance, insurance, 

commission and property tax at a certain percentage, say 20% of the 

rental income. This saves the hassle of keeping the detailed expenses and

is probably a fair estimate of the outgo, except for mortgage interest 

which can continue to be reported separately. 

I hope that, in the future, the Minister for Finance can consider waiving 

rental income from the computation of income tax, as the Government is 

already collecting property tax at quite a high rate.

Tan Kin Lian

Singapore-only toll unfair

The Straits Times Forum published a letter from Matthew Ong that it was unfair for Malaysia  to impose a toll that applies only to Singapore registered cars. If I am not mistaken, this was for construction of a link road to connect to the immigration checkpoint. This was a proposal made by a Malaysian politician. Mr. Ong described the proposal as ludicrous and said "seeking fairness is not too much to ask".

Recently, the Ministry of Education announced a measure to "differentiate" citizens from permanent residents and to give "absolute priority" to Singapore citizens in registering their children in choice schools. I posted an article to express mixed feeling about this proposal. While I am glad that Singapore citizens are being given priority, I felt empathy for those that are were being "discriminated" or, to use a new term that has now been coined, "differentiated".

I was strongly attacked by commentators in The Online Citizen. The rude and personal attacks, made mostly by anonymous people, were unwarranted. I felt sad about the bad behavior of my fellow citizens.

I wish to mention this letter from Matthew Ong about how he felt being "differentiated" against. I wish to ask my fellow citizens of Singapore to see a broader perspective, and to see the view from the other side. See the view from both sides, and see the longer term perspective, before you give your views, and avoid passing unwarranted judgment on the views of other people.

Accidents involving Malaysian registered car

The Straits Times Forum published a letter from Eunice Puay about an accident involving her and a Malaysian registered car on a road in Singapore. She was advised to make a claim under her own insurance policy and it was difficult for her insurer to make a successful claim against the Malaysian insurer or the driver. She suggested that the Singapore authority should make it compulsory for all Malaysian cars to buy daily insurance to cover the use of the car in Singapore. Do you agree with this idea?

Financial Planning Workshop - 31 March 2012 (Register now)

To learn about financial planning, attend the 6 hour workshop conducted on 31 March 2012. This is the last event that will be sponsored by SGX. Do not miss it.
http://easyapps.sg/assn/Org/Event.aspx?id=5

Financial Adivsory Industry Review (FAIR)

Sent to the Straits Times Forum Page on 27 March 2012 

I welcome the announcement by the Monetary Authority of Singapore to 

set up a committee called Financial Advisory Industry Review (FAIR), to 

review the financial advisory industry.

I am particularly heartened by the focus of FAIR to put consumers first and 

to reduce the distribution cost by addressing the underlying inefficiencies 

in the remuneration and distribution structure.

Singapore had been following the practice adopted previously in the UK and 

Australia, i.e. to rely on disclosure to allow consumers to make the 

best informed choice.

However, these two countries had decided some time ago, that 

the disclosure approach did not work and that consumers had been misled into 

paying too much for unsuitable products. The regulators decided to ban the 

payment of commission for the sale of investment products.

It is likely that Singapore will follow this new practice, or at least mandate a 

cap on the amount of commission that can be paid to the financial advisers.

I wish to point out that the industry review panel now has the opportunity to use the 

trained financial advisers in a productive way to advice Singaporeans 

on how to carry out a proper financial plan for their future needs and how to invest 

the savings in suitable products that gives them a better long term yield.

In many countries in the developed world, the tax regime is skewed to 

encourage the people to make additional savings for retirement, such as the 

401k in the USA or the superannuation schemes in Australia. They usually

take the form of deferral of tax to a future date.

The potential savings in tax to the consumer can more than offset the 

remuneration paid to the financial adviser. It achieves an 

outcome that is good for consumers and allows the advisers to earn a 

living by performing a useful role for which they have been trained.

The government benefits when more people make adequate 

personal savings for retirement and rely less on state welfare. 

I hope that the FAIR committee can find a new productive role for financial 

advisers and reduce their fear of loss of earnings arising from the likely changes 

in the remuneration structure.

Tan Kin Lian

HDB Flats - are they affordable?

Sent to Voices, Today Paper, on 24 March 2012

I refer to the article entitled "PropertyGuru report misleading: HDB" (Today, 24 March 2012).

HDB produced figures to show that the monthly installment is about 25% of the
median household income for purchasers of the 4 and 5 room HDB flats.

The calculation is based on the average selling price of new flats bought under
the Build-To-Order scheme, less the additional housing grant. According to HDB,
this income ratio is affordable, compared to international benchmark of 30% to 35%.

The purchaser has to fork out 10% of the selling price and has to  take a loan for 30 years
at an interest rate of 2.6% to achieve this "affordable" monthly installment.

It is risky for a family to commit to a large mortgage payment on a 30 year loan, especially
as jobs are not secure. If any of the income earners were to become unemployed, the
financial burden can be quite severe.

If is also risky to assume that interest rate will remain at 2.6%. Global interest rate is
now at a historical low and if the interest rate were to increase in the future to keep
pace with inflation, the monthly installments will increase.

I have recalculated the monthly installment to allow for a higher rate of 3.5%
and a more prudent repayment period of 25 years. The revised monthly installment
represents 30% of the median household income.

Looking at another indicator, the net selling price represents 69 of the
median household income for purchasers of 4-room flats and 67 times for 5-room flats.
I agree with the PropertyGuru report that a ratio of 60 times can be described as
"severely unaffordable".

We can still hope that the burden on households will become smaller, if their
income were to increase in the future. In recent years, the increase has been
modest, so we cannot expect too much help from this source.

Tan Kin Lian

New consumer law in Singapore

The new consumer rights law, also called the "lemon law" is not as strong as seen by international starndards. See this comment from New Zealand, http://www.consumerblogs.org.nz/consumer/2012/03/singapores-new-consumer-rights-laws.html

A new role for financial advisers

Some financial advisers are worried that the changes being considered by the Financial Advisory Industry Review (FAIR) might lead to a severe drop of their earnings.

There is a silver lining.

 I hope that the outcome of the  review will allow the financial advisers to play a more constructive role in helping the public to better manage their financial planning and to get a better yield on their savings. This would require the finance ministry and MAS to recognize the importance of tax incentives to get people to make additional savings for their retirement - which is much needed in Singapore today, due to inadequacy of the Central Provident Fund.

In many countries in the developed world, the tax regime is skewed to encourage the people to make additional savings for retirement, such as the 401(k) in the USA or the superannuation schemes in Australia. They usually take the form of deferral of tax to a future date.

If similar incentives are allowed in Singapore, the potential savings in tax to the consumer can more than offset the remuneration paid to the financial adviser. It achieves an outcome that is good for consumers and allows the advisers to earn a living by performing a useful role for which they have been trained. The government benefits when more people make adequate personal savings for retirement and rely less on state welfare. 

The financial advisers can put up a case for the review panel to recommend tax incentives for long term savings in life insurance. This will allow financial advisers to find a new role and reduce their fear of loss of earnings arising from the likely changes in the remuneration structure.

Tan Kin Lian

Reply to Dr. Yik Keng Yeong

Sent to Straits Times Forum Page, 24 March 2012

Dr. Yik Keng Yeong had distorted my views quite unfairly in his letter "MediShield cover for birth defects: Seeking feedback not futile exercise", . Dr. Yik chose to challenge me on my statement about the futility of getting feedback from the public on covering birth defects under the Medishieldscheme. Clearly, this was not a major point in my earlier letter.

I mentioned "some people who do not face this risk" may object to the extension ofcoverage as it would add to their cost of living. I was referring to people who are unmarried or too old to have children. I did not use the words "no one is risk free" and do not wish to be quoted out of context.

Dr. Yik held a generous view that everyone would support extending the coverage. If this was the case, why did feel he felt that it was necessary for the Minister for Healthto get the views of the public on this matter?

I am not clear why Dr. Yik would want to allude to me as "passively believing in karma" or even to blame me for the "potential litigation" that may arise from a decision to cover birth defects - implying that this could be avoided through  public consultation.

Discrimination, equality and justice

I read about the priority scheme for Primary 1 registration with mixed feelings. While I am happy for Singapore citizens that they get priority over permanent residents (PR), I have empathy for the PRs that they will now be discriminated. Of course, the PRs benefit by not having to serve National Service, but there is a saying "two wrongs does not make a right".

Generally, all forms of discrimination are bad, and should be avoided. Discrimination is negative and leaves a bad taste among the people who are discriminated. Where possible, it should be avoided or kept under the radar - so that it does not become a hot issue.

In our National Pledge, we pledge to build a society based on "equality and justice". Our society includes permanent residents and foreign workers - who deserve to be treated equally and justly, as much as is possible.

I support one type of discrimination based on income, i.e. higher income earners should pay a larger share of their income in taxation.  I also support the levy that has to be paid to employ foreign workers. I would even extend this levy to permanent residents, if this is deemed to be necessary.

Apart from the difference in taxation and levy, I prefer that all residents in Singapore should be treated equally and justly on their access to education and health care. We do not want to see a foreign worker denied of basic treatment, because they are not insured for any reason, such as being temporarily out of work.

For the same reason, I do not like the "means testing" that is being applied in the hospital on citizens. Why impose this burden on the hospital workers to explain to a citizen why they should get a higher or level of subsidy, based on the type of house they live in, for example?

Let me now deal with the issue at hand - the limited places in primary schools of top choice. The root of this problem is the competitive environment, even before a child goes into primary school.  It is unfair that some people can get access to better schools compared to others. I find this to be another form of unfair discrimination.

I can understand the concern of parents who want their children to do well, but a discriminatory and self-centred system is not good for our society.

Almost 60 years ago, I attended a primary school near my home. It was a neighbourhood school that attracted students who lived nearby. There was no need for the parents to worry about school bus or to drive their children to school. Most students walked to the school and walked home after school. They fared well in life - some become doctors, actuaries and top civil servants.

The discriminatory practices adopted in our government policies over the past five decades have brought us to the present day situation. While we have some positive aspects in our society, including our economic well being and high standard of infrastructure, we also have the negative impacts such as a poor quality of life, high cost of living, wide income gap and low birth rate. Do we really want to continue this trend?

I feel strongly we need to adhere to the key pillars of equality and justice to build a better society for the people of Singapore.

Tan Kin Lian

Unnecessary hassle

Early last year, I overlooked to top up my bank account. This caused all my GIRO payments to be terminated - property tax, income tax, club subscription, maintenance fee, insurance payment etc. DBS Bank did not call to inform me about it. They just cancelled all the GIRO arrangement.

Later, after I topped up the account, the bank was not able to reinstate the GIRO arrangement. I had to fill up the new GIRO forms again.

18 months later, I am still suffering from the effect of that incident. recently, I had to submit a new GIRO form to IRAS for my property tax and they returned it as I had entered the bank account wrongly (so they said). Actually, I entered the 14 digit bank code (including the 4 digit for the bank), and they expect a 10 digit bank code. They returned the form by ordinary mail. I had to enter the details again, and sent it back again by post.

I do not know why, in Singapore, we have procedures that cause so much unnecessary trouble and work. I suspect that this has to do with some instructions from MAS, but possibly it could be the mindless bureaucracy of DBS Bank.

Universal health care

http://singaporemind.blogspot.com/2012/03/sdps-healthcare-proposal.html

Qing Ming in Cyberspace

http://thestar.com.my/news/story.asp?file=/2012/3/25/nation/10984633&sec=nation

Housing prices and birth rates

Quote from an article by Lucky Tan

The average US single family home is US$230K and the (S$290K) average size of such a home is 2500 sq feet[Link] - a landed home of the same size in Singapore costs more than $2M and something half the size in the form of an apartment costs $800K-$1M. We are often told that our fertility rate is falling because we are a developed country so people pursue qualification and careers rather than get married and have children.

"Partly, because it takes them longer to establish themselves (in a job)....people are staying in school longer nowadays. In the past, after their O -- Level and A -- Level, people start getting economically active, get a job, start a family and buy a flat. (Now) it is taking longer for young people to get to that stage because they feel they need better qualifications to get better jobs.....Elsewhere it has been shown that the demand of the job has increased and people need higher skills to enter the labour force and get a job before they start a family." - Lee Kuan Yew 

When a person starts a family, the one thing he needs is housing otherwise he has to squeeze his family into his parents' place and you don't expect him squeeze himself, his wife and children with his parents. The key to higher fertility is affordable housing and the size of housing. The PAP govt has wasted time and money on other incentives that have done nothing but failed - they claim they are trying very hard to bump up the fertility rate as it falls to the lowest in the world. HDB even said they build smaller flat these days because Singapore families are getting smaller - they are actually putting us in a vicious cycle. I think Singaporeans are really tired and fed up of the PAP creating the problems then blaming it on Singaporeans ...then waste time and money on schemes that will not work. The next time some one from the tries to explain our low fertility and talk about solutions ....remember unless they home prices are at truly affordable levels, it is yet another waste of time and our country is further endangered by importing more people which causes population density and housing prices to go up.

The root cause of our problem has been PAP policies - first the "Stop At 2" policy and housing policies. The PAP has been using revenues from our public housing programme to fill up govt coffers [HDB paying less for land is raid on reserves: Mah] from the CPF and savings of ordinary Singaporeans. No other govt does this with public housing - linking it to the market and creating reserves - the primary purpose is to provide cheap and achieve positive social outcomes. This is not what happened in Singapore and the PAP housing policy has led to whole array of problems e.g. inability to accumulate enough to retire, low fertility, indebtedness and social inequality. Now the problems have grown to endanger ordinary Singaporeans - we have stop procreating, we are being replaced by foreigners and we do not have children to pass our values and culture to.  Time is running out for the PAP govt to fix this and from what we have seen from them - they are not serious about it and Singaporeans are running out of patience.

Inspect your home

I received an indication of the fees to inspect a home, before the buyer commits to buy the property. See www.fisca.sg

Frivolous reply by Dr. Yik Keng Yeong

In my letter on Medishield published in the Straits Times, I made the following suggestions:

a) Extend Medishield to cover birth defects
b) Allow people who were not covered earlier to join Medishield and, if necessary, pay a loading due to their medical condition
c) Allow employees who are covered by their employer to stay out of Medishield and join it at a later date, to avoid duplication of coverage.

In his letter published in the Straits Times, Dr. Yik Keng Yeong chose to disagree with me on the trivial points - of whether birth defects is uncontrollable. He also interpreted my suggestions beyond what I had intended.

I checked to see his background and found that he had engaged in similar disputes with other people. See
https://www.google.com.sg/search?sourceid=chrome&ie=UTF-8&q=yil+keng+yeong#hl=en&sclient=psy-ab&q=yik+keng+yeong&oq=yik+keng+yeong&aq=f&aqi=g1g-m1&aql=&gs_l=serp.3..0j0i5.8775l12446l0l12636l20l18l2l0l0l0l143l1188l16j2l23l0.frgbld.&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.,cf.osb&fp=4ad81885ffd0cb3a&biw=1366&bih=663

Importing a population

Virtually an entire populace has been imported in the past 20 years

as Singapore aspires to become an international city

to attract the top brains and the wealthy.

http://thestar.com.my/news/story.asp?file=/2012/3/24/focus/10969821&sec=focus

Plan to retire with adequate savings

Read my article and the comments in The Online Citizen.
http://theonlinecitizen.com/2012/03/plan-to-retire-with-adequate-savings/ 

A country of extremes

Singapore is a country of extremes, including the wage gap become high and low income earners
http://singaporemind.blogspot.com/2012/03/singapore-country-of-extremes.html

Office for rental - 1 April 2012

Available: 1 April 2012
Size: 285 s.f.

Asking $3 per sf (unfurnished) = $855 per month + GST

Interested, send email to inbox@tankinlian.com

One stop help for residents in South west District

The South West Community Development Council has introduced a website that coordinates the work of many help agencies. This is a good step. I wish them success.
http://www.todayonline.com/Singapore/EDC120322-0000081/One-stop-help-for-needy-residents-in-South-West

Here is a portal that can be used to www.easyapps.sg/egov2 to provide information and allow the work to be done easily.

Time to widen the coverage of Medisheld

14 March 2012


Editor, Forum Page
Straits Times


Time to widen the coverage of Medishield 

Minister for Health Gan Kim Yong wishes to consult the public on his 

proposal to extend Medishield to cover birth defects. He said that premium 

rates will go up. This is likely to be a futile exercise, as some people who do 

not face this risk will be against any change that will add to their cost of living.

As a national insurance scheme, Medishield should be extended to cover

most types of conditions that are outside the control of the individuals. Having

a child with birth defects is clearly an uncontrollable risk that should be covered.

The Minister should also look at other flaws in this system, such as 

the large number of people who did not join this scheme for various reasons at

the time of its implementation and who now wish to be insured. 

Most of these people are older, and may have some chronic illnesses, which prevent them from being accepted under CPF's current underwriting rules. But they do pay a higher premium that is based on their age, and may be willing to pay a loading or surcharge. It is better to allow them to join Medishield and enjoy the benefit from the risk pooling, rather than

to let them remain outside the system. 

Those who are provided with medical benefits by their employers should be allowed

to stay outside of Medishield, if they wish to, and join Medishield at a later date

when they are not employed or not covered. This will avoid the wastage of double

coverage, which add to the cost of living.

As a national scheme, Medishield should adopt an underwriting approach that is

different from profit-making private insurers. The aim should be to provide coverage

for nearly everyone, rather than to select only the healthy lives to make a profit.

If the Minister is worried about increasing the premium, there are other ways of dealing

with this challenge, instead of restricting coverage. Some of the cost can be borne

by the Government and more importantly, the medical charges should be regulated and 

not allowed to escalate due to market failures.

Tan Kin Lian

Electronic gadgets during flight

For a long time, I have suspected that the announcements to switch off electronic equipment during flight takeoff and landing to be exaggerated. My gut feel seems to be correct.

http://www.businessinsider.com/faa-may-change-gadget-plane-rules-2012-3

Withdrawal of CPF savings

Here are some suggestions to deal with the problem faced by many cash strapped people who need their CPF savings  at 55, and do not like to see the money locked up in the CPF Minimum Sum Scheme. (Note: this represents my personal views and is not a matter for the Presidential Election).

18 June 2011

Withdrawal of CPF Savings

A few people have asked for my views about the withdrawal of CPF savings. They waited to withdraw their savings at 55, but found that it is now being held back under the Minimum Sum Scheme (MSS) to 62 and to be withdrawn in instalments. The minimum sum being held back for those reaching age 55 in 2011 is $131,000.

More details of the CPF Minimum Sum Scheme can be found here: http://ask-us.cpf.gov.sg/Home/Hybrid/themes/CPF/Uploads/RSD_WDL/CPF_Minimum_Sum_Scheme.pdf

Some people need the CPF money before age 62 as they are unemployed or have debts and were unhappy at the delay caused by the MSS scheme. They asked for my views if this CPF scheme should be modified to take into account of their situation.

Technically, the CPF member is allowed to withdraw all of his or her savings in the CPF at age 55, except for the minimum sum that has to be held back.

Withdrawal at 55

If a person has been contributing to CPF and has not used too much for housing, there should be cash available for withdrawal at age 55.

The problem is that many people paid too much for their HDB flats or private housing and do not have sufficient savings to withdraw at 55 years. This leaves them in a cash strapped position. The situation is worsened when they are unemployed. And many people seem to be caught in this situation.

Rent out a room

The practical solution to get an income is to rent out a room. The rental market is booming and it is easy to rent out a room in a HDB flat for $400 to $600 a month. This can be a good source of supplementary income. Many property agents will be happy to arrange this rental for the owner.

The family has to adjust and accommodate the tenant. This may be inconvenient but it should be considered, as it provides an additional source of income to owners who are cash strapped.

Allow early withdrawal of MMS money?

Some people may prefer a way to make an earlier withdrawal of the MMS money. They may not have sufficient money for their old age, but the felt strongly that their immediate need is to have money now, not later.

So far, there is no way to allow early withdrawal of the MMS money. The regulation is quite strict.  

I believe that for some special situation, it may be justified for the CPF member to make an early withdrawal. The problem is – how to access the justified cases from the unjustified cases? Do we want to make it easy for more people to withdraw their money early to spend and face a problem later on? Who makes out the case?

We should consider working out a case for people to make earlier withdrawal. The application can be handled as follows:

·         A set of guidelines should be set out on what are justified cases for early withdrawal

·         The applicant should engage a financial planner (from the approved panel) to assess the financial situation and make a recommendation

·         The recommendation should be considered by a special committee

We should recognise that there is a problem faced by many people under the current CPF regulations and be able to work out a way to deal with these problems. I hope that this problem can be looked into and a solution found (not necessarily the solution that I have proposed).

Limit use of CPF for housing

We should also set prudent limits on the amount of CPF savings that can be used for housing. Recently, some regulations have been implemented to set certain limits. I am not sure if these regulations are working well.

Instead of relying just on regulations that may not apply to certain people, it may be advisable for the purchasers to get the appropriate financial planning advice. This can be handled as follows:

·         A set of guidelines should be set out on what are prudent purchases

·         The applicant should engage a financial planner (from the approved panel) to assess the financial situation and make a recommendation, if the applicant wishes to go outside of the regulations

·         The CPF board can insists on this recommendation, if the applicant appears to be using too much of the CPF for housing

The recommendation of the financial planner should be considered by a special committee.

Financial Planning Advice

Many people need the right type of financial planning advice. They are many people who have obtained the qualification but they are not using their knowledge in the right way, i.e. giving financial planning advice for a fee.

The above schemes can help to build a proper financial planning service that will benefit many people in planning their savings properly for the future.

Tan Kin Lian

Inspect a property before buying it

Someone asked me if there is a service for a person to inspect a property for a buyer, to identify the defects. I understand that this type of service is quite common in other countries, but I am not aware about it being practiced here. Any information or contact?

Assistance on Insurance

I often get request form the public for advice to review their insurance or to buy a new policy. I do not have the time to give this advice. I wish to refer them to Wilfred Ling or to David Soh. They can be contacted here.
http://easyapps.sg/assn/Org/Information.aspx?id=5 

Skype video conferencing

I have participated in a 3 way Skype video conferencing on a few occasions recently, with other parties in different countries. It worked well. It is much better than travelling for a meeting.

We arranged a time to call. I tried to log in earlier and check if the other parties are online. If so, I will call them before the meeting just to establish contact and can call back again at the arranged time. I have also used video, so that it is possible to see the other party "face to face".

I will be trying this approach even with parties in Singapore. It is useful to be in a conference on Skype. Although I knew that this facility was available, and had used in on some past occasions, it becomes more handy when there is real business to discuss around the world!

Buy a home report for $60

Many people spend more than $500,000 to buy a HDB flat or more than $1 million to buy a condominium. That is a lot of money. They make their decision based on information provided by the property agent selling the property who earns a big commission (could be more than $10,000) when they close the sale. Surely, the property agent has a conflict of interest and may not give the best advice to the buyer?

There is an independent and reliable source of information that will help you to make the best decision and it cost you only $60. It is available on this website,  http://www.streetsine.com/static/home2/map.jsp#homeReport . And there is a limited period promotion of $39 only.

I use this service a few times to get a report on the latest trend in market price and rental rates. I find the report to be useful to decide on how much to rent my apartments on the expiry of the lease. When the market moves quickly (either up or down), it is important to keep track of the latest updates, and not rely on a property agent that may have a conflict of interest.

SAP accounting project

I have a SAP financial accounting project for a client. If you are familiar with the platform and can work on this project in Singapore, send e-mail to kinlian@gmail.com.

Cost of health insurance will increase

Some people were advised to buy health insurance at a younger age, to enjoy a lower premium. This is a delusion. Unlike life insurance where the premium is usually fixed based on the entry age, the premium for health insurance usually increases according to your age. As you get older, you pay a higher premium.

The premium can become quite high as you grow older. This table from NTUC Income (http://www.income.com.sg/insurance/IncShield/premium.asp) shows that the premium to be over $4,000 when you are 85. The insurance does not cover the full bill, as you have to pay the deductible and co-insurance, when you are hospitalized. The premium rates charged by other insurance companies are likely to be higher.

You will also find that there is a choice of more than 10 plans just from one insurance company. If you shop around with the other companies, you will have more than 50 plans to choose from. If you talk to an insurance agent, he (or she) is likely to advice you to buy the most expensive plan, as it offers the "best coverage". It seems that cost is not an issue!

When you buy an expensive plan, it may look affordable at a younger age. But you will find it to be more expensive as your grow older. For example, a plan that cost you $400 at age 45 will cost you $4,000 when you are 85 (just look at the same table that is quoted above).

You have to take note of another point. The insurance company has been increasing their premium rates (for the same age group) over the years. What cost $4,000 today, may cost $5,000 a year in 10 years time (or sooner).

Life expectancy of Singapore population

About 50% of people at age 65 will live beyond 85. Many people do not believe this statistic. Here is a detailed report showing the calculations. This is based on the death rates in 2010. As death rates have been falling, people are living longer. So, the proportion will increase in the future. See www.fisca.sg
 

Coping with the rising cost of health care

I have often been asked to advice on the suitable type of insurance to cope with the rising cost of health care. My answer is posted in www.fisca.sg. See http://easyapps.sg/assn/Org/Staff1/Information.aspx

OKI 3300 color printer

I have a OKI 3300 color printer (hardly used) with color cartridges (partially used), available for sale at SGD 300 or best offer. Interested? Send email to inbox@tankinlian.com.

Singapore's defence policy

Lucky Tan writes about Singapore's defence policy.
http://singaporemind.blogspot.com/2012/03/singapores-defense-policy-essential-or.html

My view: If we spend less on defence, we have more money to help reduce the cost of living for our citizens. It is a goal what is worth pursuing. We need to give a better quality of life for our people.

Volunteer for Alert Portal

There was a breakdown in the train service along the North East Line. Over 70,000 people were affected. They complained about the lack of updates. Some of them asked to be alerted through their mobile phones.

I have developed a portal that allows people to check for updates and alerts at a portal. It can be accessed using the browser of a mobile phone, www.alertportal.sg/mobile.

I wish to ask for a volunteer who can spend one or two hours each day to update the alert portal. The volunteer can view the twitter and facebook of the service providers, such as SMRT, SBS, PUB, SingTel, Starhub, M1, etc. They can extract the information to be put into the Alert Portal.

This service will be useful for the public. If you are interested to volunteer your time, send email to kinlian@gmail.com. You can ask a friend to volunteer with you and share the work load. Training will be provided. It can be a useful experience.

The Minister for Transport wanted to force the taxi companies to control the "On Call" sign on the taxi roof centrally, rather than allow the taxi driver to manipulate this sign. It seemed to be an expensive way to control the bad habit of taxi drivers in mis-using this sign.

I think that it is better for the Minister to ban the taxi calling fee, and incorporate say $1 to the starting fare. If there is no fee, many people will call for a taxi, instead of stopping one on the roadside. Taxi drivers do not have to waste petrol to ply the road to look for a passenger and add to the traffic congestion and accidents.

Do you agree?

Train delay and no updates

Passengers are angry about train delays and no updates
http://sg.news.yahoo.com/anger-eurostar-suffers-delays-cancellations-053114217.html

This can be solved if the train operators use this alert portal
www.alertportal.sg/mobile


It can be accessed with any smart phone.

Currently, it is developed for use in Singapore only. I will now change it to be used anywhere in the world.

There are frequent train delays in Singapore as well. The train operators should use this alert portal to give updates to the passengers. Maybe, the Minister for Transport can encourage them to use the alert portal as another channel to get updates.

http://sg.news.yahoo.com/mrt-train-service-on-northeast-line-down-for-six-hours-due-to-power-supply-problem--.html

http://sg.news.yahoo.com/train-service-delayed-twice-at-pasir-ris--smrt-says-%E2%80%98sorry%E2%80%99.html

Taxis and road accidents

Sent to Editor, Voices of Today paper on 12 March 2012 

In the letter  "driving behind a cab should be safe" (Today, 12 March 2012), Francesco Ferri said that it is dangerous for taxis to stop suddenly to pick up passengers on the side of the road.

I suggest that the Land Transport Authority make it mandatory for customers to telephone for a taxi or wait at a taxi stand, rather than stop a taxi along the road. If taxis do not ply the road to look for customers, there will be reduced petrol consumption of petrol and less congestion and accidents on the road,  The taxi drivers should wait in a convenient place for a booking from the customer.

The regulator should mandate that the booking free should be incorporated in the starting fare of the taxi and should not be an additional charge.

Tan Kin Lian

A re-think of CPF Life

From 2013, the Government will be offering
only two plans under CPF Life, instead of the
four plans that are available now. 

There are still a lot of doubts about the two plans, i.e. the diminishing amount of the bequest as the years go by, and the question of who bears the subsidy given to people with lower savings (i.e. they get a higher rate of payout for each $1,000 of saving, compared to those with higher savings). 

Some people are still unhappy with the compulsory nature, as they are forced to use their CPF savings to buy an annuity that they do not like and may incur a financial loss if they should die at an earlier age.

I suggest that the Government consider the following approach.

• Allow all CPF members the option to keep their minimum sum in the retirement account, i.e. do not make it compulsory for those borne after 1957 to buy CPF Life
  
• Offer a new annuity plan, which is voluntary, for people to get a payout from age 85, after the savings in the retirement account has run out
  
• Make the new annuity plan attractive, e.g. the Government subsidise 50% of the cost of this annuity.

I estimate that the cost of the post-85 annuity that pays $500 a month to be less than $10,000 at age 65. The cost to the Government of a 50% subsidy is only $5,000 and is incurred only for people who buy this annuity. If 20,000 people buy this annuity each year, the cost to the Government is only $100 million. 

It should be made clear to the purchasers of the annuity that they are participating in a risk pooling arrangement. The members who die before 85 will be leaving behind their savings to pay the annuity for those who survive beyond age 85. 

If this arrangement is acceptable to most people, it would be possible for the Government to discontinue the CPF Life and to offer an option for those who bought these confusing plans to change back to the retirement accounts and, if they wish, to buy the post-85 annuity plan.

Tan Kin Lian

Outrageous behavior

From The New York Times:

DEALBOOK COLUMN: Conflicted, and Often Getting a Pass
Lawyers provide cover for executives guilty of outrageous behavior, but they somehow get relatively little blame.
http://nyti.ms/AuPAMy

Taxi booking service - how to use the service

Watch this animated Powerpoint with narration
http://www.authorstream.com/Presentation/kinlian-1359324-tabs-with-animation-pptx-new/

Singapore is Asia's most competitive city

Our ranking still remains in good shape
http://www.todayonline.com/Singapore/EDC120313-0000119/Singapore-is-Asias-most-competitive-city,-Economist-report-says

Ratio of nurses to patients in Hospital

Britain has decided that they have to regulate the ratio of nurses to patients in hospitals. This is to ensure that there is a satisfactory standard of care. It illustrates the need for the regulator to step in, rather than leave such matters to be decided by the market.
http://www.todayonline.com/World/EDC120312-0000048/Britain-may-limit-the-number-of-patients-cared-by-each-nurse

Financial education for consumers

I have written a few comments to educate consumers on investing in this troubled world. You can ready my comments and the referenced articles in www.fisca.sg. 

Swiss reject 6 weeks of paid holidays

Switzerland has an interesting system of conducing referendums for their citizens to give their views. Here are the results of a recent referendum about getting 6 weeks of paid holidays in a year. The citizens rejected this proposal, to ensure that their firms can continue to be competitive globally. This shows the benefit of giving voice to the citizens and, in return, they act responsibly. This is a good way to involve the people and to cultivate a responsible behavior.
http://www.todayonline.com/World/EDC120313-0000029/Swiss-voters-reject-6-weeks-paid-vacation

This strategy should be adopted in Singapore. However, it will take a long time to educate the people, but a start must be made. If we wait longer, the situation will get worse. Let us start with the by-election in Hougang.

Malaysia set minimum wage

Malaysia has decided to set a minimum wage of M800 to M900 per month, depending on location
http://www.todayonline.com/World/EDC120313-0000053/KL-sets-minimum-wage-between-RM800-RM900

Two weeks ago, a newspaper reported that a complaint by Malaysian employers that a minimum wage will cause 90% of the workers in small companies to lose their jobs, as the profit margin of these companies cannot sustain the minimum wage.

The employers overlook an important fact. The minimum wage will apply to all businesses. Their competitors will also have to bear the higher cost. The higher cost has to be passed to consumers through higher prices. And the lower income earners can afford the higher prices, as they earn higher wages, due to the minimum wage.

An important outcome is that the rental component that is embedded in the prices will become relatively smaller, compared to wages. This is a good and fair outcome. It is better to have the proper balance between wages, rental and profit.

Without a minimum wage or other regulations protecting workers, the wages will be be depressed by market forces. This has led to the high disparity between the high and low income levels, i.e. the widening wage gap, whic his bad for society.

Straits Times index gain 12% in 2 months

In spite of an uncertain global economy, the Straits Times Index gained 12% during the first two months of 2012 and gave a dividend yield of 3.7%. Who would have thought that the stock market could be robust? This shows the importance of investing for the  long term, and not speculate on short term trends - as no one can make an accurate and reliable prediction. To learn about investing for the long term, attend the FISCA workshop that wil be held on 31 March 2012. See www.fisca.sg (events). Do not miss this last workshop sponsored by SGX.

A pleasure to find a place that is not so crowded

I drove to Thomson Plaza at 10.15 am to visit the bank. It was a pleasure to see many vacant spaces in the car park. I park the car, carry out my transaction with the bank quickly and lefe the place within 10 minutes. It has been a long time since I had this feeling of leisure, of not having to drive round and round to look for an empty space or to wait in a long queue.

The quality of life can be much better, if Singapore is not so crowded. I had experienced this feeling when I visited a friend in Ohio, USA. There was so much space and houses and cars were not expensive. People had time to talk to their neighbors and friends. 

Business of the future

Read this interesting article. I am interested to do 2, 3 and 7 and look for people who want to participate in these exciting  projects.

http://www.businessinsider.com/paul-grahams-advice-for-startups-2012-3#ixzz1orLvRoOw

1. A better search engine. Google was once an awesome search engine. It is now bloated up with all sorts of extra features. Graham says, "Google search results used to look like the output of a Unix utility. Now if I accidentally put the cursor in the wrong place, anything might happen." He suggests building something closer to that old-school, super simple version of Google.

2. Make email better. Email is just a "todo" list says Graham. As it's built right now, it's a terrible todo list. We need a new protocol for email. "As a todo list protocol, the new protocol should give more power to the recipient than email does."

3. Kill off universities. There has to be a better way to do education than what we've got right now.

4. Deliver great TV programming through the internet. The content companies have been slow to embrace the Internet. So, some startup needs to figure out a way to deliver the drama that people love on TV through the Internet. Says Graham, "There are two ways delivery and payment could play out. Either some company like Netflix or Apple will be the app store for entertainment, and you'll reach audiences through them. Or the would-be app stores will be too overreaching, or too technically inflexible, and companies will arise to supply payment and streaming a la carte to the producers of drama. If that's the way things play out, there will also be a need for such infrastructure companies."

5. Be the next Steve Jobs. Graham believes Apple is toast without Steve Jobs. As a result, there's an opportunity for a visionary to come up with an idea for a new hardware company like Apple.

6. Re-invent Moore's law. This one is a little complicated. Graham says Intel can't deliver faster CPUs, just more CPUs. "It would be great if a startup could give us something of the old Moore's Law back, by writing software that could make a large number of CPUs look to the developer like one very fast CPU."

7. Improve medical diagnosis. In 50-100 years, Graham thinks people will consider our current methods for diagnosing serious health conditions "barbaric." There has to be a better way to figure out if we have cancer, or if our arteries are being clogged up.