Thursday, August 23, 2007

CPF is our freaking $!!!! We demand Transparency & Accountabilty NOW!!!!


Draw-down age for CPF minimum sum to be raised progressively to 65
By Valarie Tan, Channel NewsAsia | Posted: 19 August 2007 2334 hrs

SINGAPORE : The government is taking more steps to ensure that Singaporeans have enough CPF savings for their old age.

It is raising the draw-down age for the minimum sum from 62 to 65.

This was announced by Prime Minister Lee Hsien Loong in his National Day Rally speech on Sunday.

Currently, Singaporeans who have turned 62 can start withdrawing their CPF minimum sum and enjoy a S$790 monthly payout for the next 20 years.

This will change in five years (in 2012) when the new "Draw-Down Age", or DDA, is progressively raised to 65.

The first to be affected will be those aged 56 or 57 by the end of 2007.

They will have to wait one year longer - till they are 63 - before they can tap into their CPF minimum sum.

Those 54 or 55 this year will have to wait two years longer - till they're 64 while those between 49 and 53 can only withdraw the minimum sum when they hit 65 - the new DDA.

=> How much longer do they want to deny S'poreans of their hard earn monies?!?!

PM Lee said: "I know this is not so popular. But we have no choice. People are living longer, we have to work longer. And we have to start drawing on the reserves later. Therefore we have to start moving now. Not move all the way now. But we have to start moving now. And we will get there in good time."

And the prime minister has promised something extra for older workers who are affected by the change.

These will come in the form of Deferment Bonuses into their CPF retirement accounts.

Details will be announced later.

But just delaying the withdrawal age is not enough to cover older Singaporeans who are living longer than expected.

So the government has decided to make annuities compulsory for Singaporeans aged 50 and below.

=> WTF! We can get the annuities only after 85 leh! What makes you think that we can all live beyond 85 for a long time?! If only 85 then we can claim, it is no longer "年金" (annuities) liao! It is "白金" ($ you give to relatives of dead person during funeral)!

CPF members are currently allowed to convert their minimum sums to annuities with an insurance company and then get monthly payouts for the rest of their lives.

But the voluntary scheme has not been popular.

=> KNN. Already know S'poreans don't want this scheme liao you still want to shaft it down our throat?!?

Mr Lee said: "It's partly because Singaporeans don't understand annuities, don't understand why they need them. It's also because frankly speaking, the returns haven't been very attractive. The costs have been high. But despite these limitations, we do need annuities as part of our old age planning."

Details on the CPF changes will be spelt out when Parliament sits next month. - CNA/ch

From Sammyboy Alfresco Coffee shop:


SINGAPORE : Interest rates for the CPF Special, Medisave and Retirement Accounts will be re-pegged to an appropriate long-term bond rate.

Manpower Minister Ng Eng Hen said more details on this will be worked out and announced next month.

He said the new rates will be lower initially than the current rate of 4 percent but it should do better than 4 percent over time.

But as the rates will be pegged to the market, fluctuations can be expected.

=> Why not peg it to the S & P return, which is at 11.9% pa, CCB Bargain Hen?

Dr Ng was speaking at a news conference to explain the initiatives announced by Prime Minister Lee Hsien Loong at the National Day Rally.

Giving more details on the compulsory annuities, Dr Ng said only part of the minimum sum from the CPF will be set aside for it.

A major portion of the minimum sum will still be for the members to withdraw when they reach the draw-down age.

Dr Ng said this is to ensure that members are covered even after the age of 85.

He said the aim is to achieve a subsistence payout first - of possibly between S$250 and S$300 per month.

=> Worse than NS pay! WTF! $250 in x years = $2.50 in today's value!

Friday, August 10, 2007

NS Song

You dun have to agree with it, but it is really entertaining!

Nation Builders - A new video by Martyn See

As the commentator go on and on about remembering the hardwork of our pioneers, this is the reality that many of our elderly are facing.

The wealth generated by Singapore's much-touted economic success story has not benefited everyone, least of all its senior citizens, a.k.a. the nation builders. Filmed on the streets and back-alleys of downtown Singapore in July 2007, this video does not contain any enactments or acting. Directed, shot and edited by Martyn See. Running time : 14 minutes.

Wednesday, August 08, 2007

Better red than dead

Better red than dead
Healthcare pressures may cause the trend towards free-market capitalism to reverse, with a large chunk of the economy reverting to a socialist system.

Kenneth Rogoff
August 5, 2007 9:00 AM

Will the inexorable rise in medical costs around the world someday pose a major challenge to contemporary capitalism? I submit that in the not-so-distant future, moral, social, and political support for capitalism will be severely tested as would-be egalitarian health systems face ever-rising costs.

Rising incomes, population ageing, and new technologies for extending and enhancing life, have caused health costs to rise 3.5% faster than overall income for many decades now in the United States. Some leading economists project that health expenditures, which already constitute 16% of the US economy, will rise to 30% of GDP by 2030, and perhaps approach 50% later in the century. Other rich and middle-income countries, although typically spending only half what the US does today, won't lag far behind.

Countries in Europe and elsewhere have shielded their citizens from a part of this rise by piggybacking on US technological advances. Ultimately, though, they face the same upward cost pressures.

Hasn't the start of the 21st century marked the death of all other ideologies, with China's raw capitalism putting pressure on gentler forms in Europe and elsewhere? The problem is that attitudes towards healthcare are fundamentally different.

Many societies view healthcare as a right, not a luxury. When medical expenses constituted only a small percentage of income, as was typically the case 50 years ago, an egalitarian approach to healthcare was a small extravagance. The direct and indirect costs were relatively minor and affordable.

But as health expenses start taking up a third of national income, healthcare socialism starts becoming just plain Marxism: to each according to his needs. Even China's authoritarian capitalism will someday feel the pressure, as its rural populations, who currently have little access to doctors or hospitals, eventually explode with discontent.

One often hears about rising healthcare costs in the context of future government budget projections, with old-age health costs expected to dominate growth in government expenditures in coming years. But a careful look at the projections by, say, the US Congressional Budget Office, show that the aging of our societies is only a part of the problem, and not the larger part. The real issue is whether societies are willing to provide elderly people with equal access to ever newer and improved medical techniques.

A change on the horizon that will exacerbate current frictions is the growing importance of individualised health care. For most of modern history, relatively inexpensive public health precautions, such as providing clean drinking water and routine vaccinations, have been the main factor pushing up life expectancy. Public health measures have trumped the importance of individual care.

But today, the balance is shifting. Heart operations are already a major factor in extending life in many rich countries. Sophisticated x-ray diagnostic techniques such as CT scans make it possible to detect many cancers at a treatable stage.

Some drug researchers predict that with continuing advances in understanding the human genome, doctors may eventually be able to predict illnesses 15-20 years in advance, and begin prophylactic treatment immediately. (With some experts predicting that individuals will routinely live beyond 110-115 years by mid-century, one might wonder what all this will do to other social conventions such as marriage, but I will leave this thought to another day.)

In addition to reducing mortality, new medical techniques can also have a huge effect on the quality of life. Roughly 250,000 hip replacements are performed in the US each year. Under-60 patients are becoming more important as newer artificial joints prove their capacity to withstand more active lifestyles.

At $6,000, the average cost of a hip replacement is only a thousandth the cost of what it supposedly took to implant a bionic arm, eye, and two legs on the fictional The Six Million Dollar Man in the popular mid-1970's TV show. Of course, hip replacement patients don't get superhuman speed, strength, and vision - at least not yet. If Tour de France officials think they have big problems now with steroids, just wait 10 years.

In principle, greater use of market mechanisms to allocate health care can slow or even temporarily reverse the rise in healthcare costs. But improved efficiency has its limits. Ultimately, the evidence suggests that societies spend ever-larger fractions of their income on health over time, in contrast to food expenditures, for example, which fall as countries become wealthier.

Spending pressures, in turn, lead to acceleration of innovation. This raises long-term wellbeing all around, but exacerbates short-term inequalities and frictions.

I am not arguing against healthcare capitalism, but warning that support will become fragile, far more so than for, say, globalisation nowadays. Most countries rely far too much on command and control, and provide far too few incentives for patients and providers to make efficient choices. Nevertheless, it remains to be seen whether healthcare pressures will ultimately cause the current trend towards free (and freer) market capitalism to reverse, with a very large chunk of the economy reverting to a more socialist system. Some societies might decide that it is better to be red than dead.

In cooperation with Project Syndicate, 2007.

Friday, August 03, 2007

Temasek reports 29% drop in profits.

Mdm Ho Ching, wife of our PM, has been in charge of Temasek Holdings since 1 May 2002. From my memories, Temasek Holdings hasn't been performing very well in recent years...

It would be really interesting if someone can do a report on the performance of Temasek Holdings' investment for the period that Mdm Ho Ching is in charge. I would really like to know how did Temasek Holdings' performed when she is at the helm.

Temasek reports 29% drop in profits due to fewer transactions
By Yvonne Cheong, Channel NewsAsia | Posted: 02 August 2007 1758 hrs

SINGAPORE: Singapore investment firm Temasek Holdings has reported a 29 per cent drop in full-year earnings.

Net profit for the financial year ended in March amounted to S$9.1 billion or US$6 billion.

The value of its portfolio stood at S$164 billion, which was 27% higher than the previous year.

This is the first time that its portfolio has breached the US$100 billion mark.

Temasek also said that it made new investments of nearly S$16 billion in the last financial year.

It also divested assets worth more than S$5 billion.

Although its net profit declined by 29% on year, Temasek said the numbers were still strong.

"We achieved profits of about S$9 billion, lower than the year before. That reflects the number of transactions that we did last year. It reflects our cautious outlook of the market during the year, but we're happy to see that the S$9 billion remains our second highest ever profit number for Temasek," said Ng Yat Chung, Temasek's managing director for portfolio management.

The drop in net profit was partly due to an impairment charge on Temasek's stake in the Thai telecoms group Shin Corp.

"We have made accounting impairment to our investment in Shin. I'd like to point out that we're a long-term investor. We're still optimistic about the medium-term outlook for the Thai economy and we believe the business in Shin, the fundamentals, are sound. So I think we look to the company to grow the business and generate healthy returns for us," said Mr Ng.

Temasek did not reveal the size of the Shin Corp impairment, but overall, Temasek booked a loss of S$830 million from its associated companies, which include Shin Corp.

Temasek said its investment outlook remains one of caution in light of medium-term geo-economic risks and signs of volatile market conditions.

But it said it is concerned about the calls for more protectionism in Europe and the US towards sovereign wealth funds.

Temasek said it hoped to distinguish itself by being transparent.

Mr Ng said: "We believe that the free flow of investments across countries is beneficial to economies and to consumers. We'd be very disappointed, I think, if the current debate on sovereign wealth funds eventually leads to imposition of protectionist measures against free flow of investments."

Temasek has been looking for investment opportunities outside Singapore.

It recently bought a 2.1% stake in Barclays Bank.

It has also bought an additional 1% stake in Standard Chartered Bank, raising its shareholding to 14%.

"We find Stanchart interesting because it has a strong reach in Asia, and that fits in well with our investment themes when we focus on growth opportunities in Asia," said Mr Ng.

In terms of returns, Temasek reported a one-year total shareholder return by market value of 27%. - CNA/ir

Singapore Stumbles
By Eric Ellis
March 15, 2006: 5:05 PM EST

(FORTUNE Magazine) - Is Ho Ching losing her touch? That's what some are asking about Temasek Holdings' formidable chief executive after a string of embarrassing setbacks.

In February the Singapore government investment agency's wholly owned PSA was trumped by Dubai's deep-pocket sheikhs, who outbid it for Britain's port operator, P&O. Temasek walked away with a $50 million profit on its stake, but it was cold comfort for losing the chance to become the world's No. 1 port operator (though subsequent challenges could yet undo the Dubai deal).

Then Temasek's $1.9 billion purchase of Thailand's Shin Corp., owned by Prime Minister Thaksin Shinawatra's family, filled Bangkok's streets with protest. Thais are grumpy that Thaksin paid no tax on his windfall and that he sold strategic assets to a foreign-government-owned agency.

"Temasek underestimated the political fallout," says Thitinan Pongsudhirak, a professor at Bangkok's Chulalongkorn University. "The deal has not been transparent. Whether they like it or not, Temasek has made itself a player in Thai politics, and that puts its investment at risk."

Temasek is also under fire in Jakarta, where politicians want the group it to unwind its investment in communications giant Indosat. With another Temasek-owned company, SingTel (Research), owning a half stake in competing mobile operator Telkomsel, they fret about Singaporean domination of Indonesia's phone market. That was after the Indian government denied Temasek approval to buy into mobile operator Idea Cellular, India's fifth-largest, because SingTel already owns part of Bharti, the No. 1 operator.

Temasek's problem--and advantage--is that it is 100% owned by Singapore's Ministry of Finance. Its board is studded with bureaucrats and businessmen. Its $80 billion portfolio includes majority stakes in most of the city-state's leading companies, including Singapore Airlines (Research) and defense contractor Singapore Technologies. CEO Ho is the wife of Prime Minister Lee Hsien Loong, who is also Finance Minister.

With that pedigree, it is little wonder Temasek gets its calls returned. But it also makes it a magnet for controversy across Asia, where the trend is for governments to get out of business. Even in Singapore some consider Temasek too powerful. "Singapore would be better served," says Manu Bhaskaran, CEO of Centennial Asia Advisors, a Singapore economic-risk consultancy, "with companies in the hands of an array of private-sector shareholders."

Some of Temasek's investments are proving troublesome on the financial as well as the political front. Fiber-optic cable operator Global Crossing (Research), in which Temasek took a 62% stake in 2003, lost $336 million in 2004 and another $278 million in the first nine months of last year. In February, the Temasek-controlled DBS Bank took a $700 million writedown on its Hong Kong operation, the former Dao Heng Bank, which it bought in 2001 for $5.4 billion, a price it said then was fully valued. And Temasek's 60%-owned wafer business, Chartered Semiconductor (Research), although poised for a turnaround, has had losses of more than $1 billion since 2001. Chartered shares have lost 90% of their value since 1999, an affront to Ho's mantra that Temasek is a value investor.

To be sure, market leaders like Singapore Airlines and SingTel are stellar performers, helping bring Temasek profits of $4.7 billion on revenue of $42.2 billion for the past fiscal year. But some, like Steve Chia, a member of Singapore's Parliament, don't think that's good enough. Chia described Temasek's shareholder return of 1% annually over the past five years as "poor," compared with the Singapore Straits Times Index's 2.7% gain over the same period.

Temasek, which declined to make Ho or any other executives available for comment, has maintained that it is simply a benign investor and that there's no government involvement in its dealmaking. Perhaps. But that's not how others see it. "We hear a lot from Singaporeans about transparency and what integrity they have in business," says Thitinan, the Thai professor, of the Shin Corp. deal. "But I'm afraid that by their own standards, Temasek has failed the test."


Ho Ching: Can she fix Singapore Inc?
shes the ultimate insider, but putting her in charge of Temasek Holdings might make sense, says Michael Shari, Business Week.
June 18, 2002

Singapore -- Now to observers of Singapore politics and business, Temasek Holdings Ltd has long represented everything that's right, and wrong, about the prosperous city-state.

The government controls Temasek, which in turn controls some 40 companies, from shipbuilders to banks to chipmakers. Honest bureaucrats toil at Temasek companies, doing their best for Singapore Inc.

But the state's heavy hand stifles entrepreneurial drive and prevents much-needed restructuring.

Critics have long said that what Temasek needs is a new boss who'll shake things up, break the mold, and push Singapore out of its slump.

Well, Temasek has its new boss--but to cynics, the choice is a classic case of Singapore patronage.

On May 1, 49-year-old Ho Ching was named executive director of Temasek Holdings. Ho, now responsible for the biggest corporate remake in Singapore history, is the daughter-in-law of Senior Minister Lee Kuan Yew and the wife of his son, Finance Minister Lee Hsien Loong.

It's no surprise that critics wonder if Ho is right for the job. While she would not comment for this article, other members of the Singapore elite acknowledge that her appointment is a public- relations issue.

"It is awkward. We know that," Prime Minister Goh Chok Tong told Business Week on May 29. "There is some conflict of interest, but you know, we work for the larger good."

Strange as it may sound, an appointment that looks like nepotism might make sense. Ho Ching's defenders say her marriage to Finance Minister Lee means she has the clout to prevail.

The Stanford-educated Ho also has long experience in the state-led sector. For nearly five years, she ran Singapore Technologies Ltd, a defence contractor that is 100 percent owned by Temasek and makes everything from computer chips to rifles.

For the most part, her stewardship of ST was praised. "I got her not because of her political connections," says Temasek Chairman S. Dhanabalan, the man who hired Ho for her new position, "but because of her competence and record."

In fact, thanks to those political connections, Ho almost didn't get the job. When Dhanabalan first offered her the post back in August, her husband, says Goh, made it clear that he was uncomfortable with the situation.

After all, Ho would have reported directly to him. So Temasek management was "reconstituted" to provide a "buffer" between Ho and Lee, says Goh.

Meanwhile, she stepped down as CEO of ST so she wouldn't report to herself. Now Ho is resigning from the boards of seven other state-led corporations.

So, can Singapore Inc. fix Singapore Inc.?

Many analysts insist that only an outsider can break up the cozy corporate culture of patronage widely blamed for the lethargy of the so-called government-linked companies (GLCs).

Critics note that Temasek directors sit on the boards of corporations Temasek owns, and that the board members of those GLCs sit on the boards of other GLCs.

Moreover, most GLC execs, while highly trained and dedicated, have spent their careers toiling at state-controlled companies, earning them the sobriquet "hothouse flowers."

The solution, say critics, is for an outside investor to take a stake in Temasek, whose 13 top companies posted combined revenues in 2001 of $30 billion.

But a US equity fund manager in Singapore says no one "is in enough pain here to want to do that."

The Singapore government clearly believes a foreigner would lack the political power to enact changes.

That's why it has turned to a member of the Lee family. "Putting in Ho Ching is a smart move," says one Singapore banker. "When you have the kind of clout she has, you can get a lot done without worrying about other variables."

Singapore companies are long overdue for a shakeup, especially given the economy's fragile state.

After all, according to the US State Department, the GLCs account for 60 percent of the economy (though the Singapore government insists it's more like 13 percent.)

By and large, the GLCs are underperforming the private sector and the stock market.

And while most are meeting Temasek's target of a 12 percent return on equity (ROE) or better, critics say that's because many of the GLCs enjoy what amounts to a domestic monopoly. For example, the Port of Singapore Authority is the sole port operator.

Moreover, analysts argue that applying a profitability measure as broad as ROE is meaningless to a conglomerate like SembCorp Industries, which is owned by Temasek and has diverse businesses, ranging from a zoo-management company to an Internet service provider.

The only way to get an accurate picture, they say, would be to break the conglomerate into core businesses and apply industry- specific measures to each of them.

What should Ho do first?

Analysts believe she should complete planned restructuring tasks. One is the clumsily executed merger between DBS Bank and PosBank, which resulted in dual networks of branches and ATMs.

Another is to force the merger of shipyards owned by SembCorp Industries and Keppel Corp., a process halted after arguments over pricing.

And, say analysts, Ho should lean on SembCorp to spin off such subsidiaries as SembCorp Logistics, SembCorp Engineering, and Pacific Internet, a process halted in 2000 when they failed to fetch expected prices.

More difficult, perhaps, will be changing Singapore Inc.'s corporate culture from one that puts a premium on loyalty and political service to a more free-wheeling ethos.

In particular, observers would like Ho to trim corporate boards of dozens of civil servants, military officers, and members of parliament.

The big question is whether Ho has the management talent to get the job done.

Some contend that being CEO of Singapore Technologies is not like running a real company because it uses Defence Ministry research labs, saving on what would otherwise be huge research and development costs.

And Ho's performance at ST was called into question in parliament following the 1997 collapse of Micropolis, a subsidiary that made high-end disk drives. Its failure cost Temasek $340 million.

Dhanabalan insists Ho was right to shutter Micropolis and cut its losses.

For his part, Goh defends not only Ho but the entire Lee family on grounds that Singapore's talent pool is too small and the family's academic record too impressive not to employ them in key positions.

"It is an exceptional family," says Goh. "Do we discriminate against them just because they're related?"

And therein lies the crux of the debate. No one disputes the achievements of Singapore's First Family.

Under Lee senior, the city- state rose from an impoverished swamp to become a prosperous First World city.

And yet, more recently the government has struggled and largely failed to bring the forces of the free market to bear on the nation's state-controlled companies.

Ho Ching may be the right person to sort out Singapore Inc. But it remains to be seen if she can make the corporate bureaucrats under her hew to her will.


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