TR EMERITUS

[WSJ Article first appeared in online.wsj.com/articles/protesters-assail-singapore-pension-system-1402155985 on 7 Jun 2014] One of the Largest Shows of Public Dissent in Tightly Regulated Singapore Demonstrators during a protest at the Speakers' Corner at Hong Lim Park on Saturday (7 Jun) in Singapore, where protesters demanded greater transparency and accountability on how the state-pension monies are being managed. Getty Images Roughly 2,000 people protested against perceived inadequacies in Singapore's state-run pension system, signaling rising discontent over retirement savings in this city-state. The demonstration on Saturday was one of the largest-ever shows of public dissent in tightly regulated Singapore, where the governing People's Action Party has seen its parliamentary dominance ebb in recent years with an increasingly vocal electorate seeking more steps to quell socioeconomic pressures. Protesters cheered as a half-dozen speakers called on the government to improve the Central Provident Fund, or CPF, the state-run pension system that many lower- and middle-income Singaporeans say lacks transparency and fails to meet their retirement needs. "Singaporeans have a right to know where our…money is going," Roy Ngerng, a 33-year-old health-care worker who organized Saturday's protest, told the crowd. "What we want is transparency and accountability." A spokeswoman for the prime minister's office didn't immediately respond to a request for comment. Prime Minister Lee Hsien Loong and other officials have said they would review the pension plan and consider certain changes but defended the overall system as sound and transparent. Saturday's demonstration at Hong Lim Park, the only venue in Singapore where public protests are allowed, was the largest held in the city-state since early 2013, when two protests against the government's immigration policies each drew more than 3,000 people. "Concerns over whether one's CPF savings are adequate for one's retirement have been festering," said Eugene Tan, an associate professor of law at Singapore Management University. "There is also the perception that the CPF is less fit for purpose at a time when it needs to be even more robust, given a rapidly aging society." The pension system was established in 1955 and was gradually liberalized to allow fund members to use some savings to buy homes and make financial investments. Slowing wage growth and rising living costs in the past decade also have hurt people's ability to save for retirement, analysts said. In a 2013 survey, insurance firm Manulife found that nearly 70% of Singaporeans expected to work beyond the retirement age of 62 due to expected shortfalls in their retirement savings. Singapore's rising life expectancy and declining birthrates have also complicated matters, as aging citizens require greater retirement savings and have fewer working-age family members to rely upon. According to government projections, the ratio of working-age Singaporeans to elderly citizens, ages 65 and above, could fall to roughly 2 to 1 by 2030 from more than 6 to 1 currently. At the protest, many Singaporeans also expressed concerns about how the retirement savings are managed by the government. The finance ministry has said the CPF Board buys special government bonds that earn interest for fund members. Proceeds from the bond sales are then used for investments by the sovereign-wealth fund, GIC Pte. Ltd., and the Monetary Authority of Singapore, the ministry said. Last month, lawmakers urged the government to improve the pension system, a suggestion accepted by Mr. Lee. * Re-published with consent from The Wall Street Journal.  Read More →

Gross Domestic Happiness vs Gross Domestic Product What benefit does the common folks in the main street receive when a few more billions are spent on some dubious latest fighter jets that have even attracted much criticism from experts in the same field? But GDP (Gross Domestic Product) as a measure of economic growth would include that government spending in its computation. Often media reports economy grew by how many percent the previous year but the common folks do not seem to feel that their wallets have become heavier over the past year. In fact, more often than not, the reverse is felt and the wallets seemed lighter each passing year for many among the masses. Why? Does the Law of Diminishing Marginal Returns apply in this case? When a country has zero fighter jet, it makes great sense to sacrifice social spending and spend lavishly to make the fat cats in some foreign defense industry even fatter by apportioning precious limited finite tax payers monies to pay for the purchase upfront and be liable for all kinds of maintenance costs arguably for the next 20 to 30 years as long as the fighter aircrafts are in service. But when a small country has more aircrafts in its arsenal to defend even a land 100 times its size and bomb its invaders back into stone age, does constantly adding every new fighting shiny toy that comes into the market make much difference to its defence objectives? Could the money be better spent elsewhere in the economy? What are the objectives of a government? To make a small group of people very rich and happy or to make the vast majority of the masses' lives better, bearable and happier every passing year? Should a society include the happiness index as one of its objectives of its government? If so, how to achieve that? Can an autocratic, dominant government behaving like a monopoly in the market place be possible to self-impose conditions and behave like a small player in a market place with many providers when reality speaks for itself that it is the sole provider? Does that mean competition and checks and balances are needed to achieve better equity and equality in a society? Take for instance another example – the building of casinos. Assuming 10 billions were spent in its construction and statistically this amount would be reflected in the GDP growth. But does it translate into any growth of the wallets in the common folks' pockets? How on earth does the casino make the life of the common folks better except bringing legal gambling to their door steps for many to part with their life savings, lose their jobs and families in the end? How about lavishly building iconic structures such as Gardens By The Bay? The billions spent certainly is reflected in the GDP figure as economic growth but again how much does it benefit the common folks? Again, is GDP accurately reflecting economic growth in the wallets of the common folks which is the focus rather than the top 0.1% fat cats who more often than not waste disproportionately vast amount of planet earth's resources and food? One possibly good measure of whether quality of living and standard of living and happiness in the general population are improving is the TFR figure or simply a society's annual birth rate. In the older days, when a society is poor but conditions improving, it brought about the baby boomers generation. Why? Likely the main reasons were because the populace felt confident, were excited, their hopes renewed, trusting their governments to undertake genuine, tangible, effective and helpful supportive measures to facilitate active procreation. When the TFR of a nation is languishing and perpetually declining, is it a manifestation of greater underlying social, economic symptoms and generally people's severe lack of confidence in the future? With all the “crazy” construction going on and the emergence of gleaming new buildings and modern constructs faster than one can count, why should confidence be heading south than increasing? What engenders confidence and trust in people? Hardware or software? Are policy makers on the right track? Do they know what to do to bring about the desired outcome? Do they have sound plans and ideas in the first place? Or are they only wired to bring about superficial growth on the surface, material hardware, endless wasteful constructions but utterly clueless about building and constructing the software of a strong, cohesive and sustainable society? To be continued in Part 2 - Heartware vs hardware P S S * The author blogs at pro-sustainable-sg.blogspot.  Read More →

Straits Times, 6 June 2014 MediShield Life – everything also increase? We refer to the article “Enhanced benefits proposed for MediShield Life” (Today, Jun 6). The following questions remain unanswered: MediShield scheme accumulated surpluses? What is the accumulated surplus plus interest since the MediShield scheme has had annual surpluses since its inception? About $1 trillion? Still not spending any money on healthcare? From a cash flow perspective, will the Government still not be spending a single cent on healthcare because Medisave contributions in a year may continue to exceed all withdrawals including government healthcare spending? Are there any countries in the world that operate their healthcare system like this? After transitional subsidies – premiums increase more than 100%? The problem with transitional subsidies may be that according to the example given in the subject news report – for a family – their annual premiums will increase from $1,220 to $2,436 if they do not qualify for the “subsidy for low income”. This is an increase of 100%. No projections into the future? And we have not even factored in or projected how much the increase will be as the couple in their 30s and their 2 elderly patents (early 60s) get older, as premiums may generally increase with age? Why are such projections not mentioned at all in the media report? SY Lee and Leong Sze Hian  Read More →