In bad times, businesses have to retrench their employers to cut costs and stop losses. This approach is adopted around the world. Singapore also follows this approach.
I hope that our government leaders realise that the impact of retrenchment on Singaporeans is greater, for the following reasons:
1. In the developed countries, there is unemployment benefit for one or two years to help the laid off workers to adjust to the new situation
2. Many Singaporeans have heavy mortgages and debts to pay. After being retrenched, they will be hounded by the lenders.
3. In the less developed countries, they can survive in the countryside with a lower cost of living. This option is not available in Singapore.
Our government leaders have been proud that Singapore does not have an unemployment insurance system, as it stops people from being lazy and living off the work of others. But this is only one side of the coin. The other side said that there are many hardworking people who lost their jobs due to no fault of their own, and now have to suffer the heavy penalty.
If the company is doing well, the retrenched workers are able to get a fairly generous retrenchment benefit that can tide them over for some time. If not, we need some other measures.
In the absence of unemployment benefit, our laid off workers should be allowed to make modest withdrawals from the Central Provident Fund savings, or have access to interest free loan provided by the government. This are just some suggestions.
Hi Mr Tan, thats very nice of you to collect feedback. Are you going to do anything with these feedback after collecting them? Can you share with us your plan and whether you will need help from other Singaporeans? Your questions are propably ahead of its time, the real retrenchments have not land in Singapore yet, so for now the anguish do not exist. It is really the job of the million dollars leaders to worry about this, in they end they will turn around and want Singaporeans to get real, to be less picky, to go for more training. Every time theres a downturn, they made it looks like its the fault of the workers.
ReplyDeleteMr Tan
ReplyDeleteThanks for keeping the Government alert about matters that are genuinely concerned the men in the street.
Government should be busy doing or planning how the nation goes forward in such economic environment. I urge the Government to halt their investments overseas; to conserve the country reserves from serverely slashed further by the uncertainties all around the world.
Just like the minibonds, DBS H-notes, Jubilee Series etc... the investors are blamed for walking in with eyes open; I hope GIC and T Holdings walk in with eyes double-open.
Now that Pinnacles 9 and 10 nare worthless, There should be more people attending the Sat gathering. In the past, very few Pinnacles holders were there!
ReplyDeleteJerry said,
ReplyDeleteDuring the 1996/97 Asian Financial Crisis, Singapore more or less escaped the Recession whereas our neighbouring countries and Asia were all truely affected!
We were laughing and thinking how lucky we were and now what happens?
We are the first in SEA to announce to the world that we are in Technical Recession....Question is: Are we prepared for the worst?
Panic button is already on the way!
So what jobs for the the retirees when the young and abled are all worried to face the future!
Some companies will take advantage of the situation.The heavy weights like managers/supervisors and higher income group will be first on the chopping blog.
Can the Unions save those affected?
It is painful to get layoff, cutting off a regular income source. This nation is too small and without natural resources, so almost everyone has to depend on some sort of employment job, be it self-employed or being employed. It is at the mercy of the employers' hands to give out compensation. If there is another source to draw from, it can give certain relief to families, at least for a period of time.
ReplyDeleteAs said, this is NOT a nanny state.
ReplyDeleteWasnt. Wont be. Accept it.
No use one lah. The govt will just say : we dont believe in social welfare system (bcos it makes people lazy!), CPF withdrawls...no way, its for your old age after retirement ( we planned ahead for you!). Always got 'good' justifications as happened many times before. So, people, wake up,don dream , dont argue....!?
ReplyDeleteWhat if you are laid off? Did you your agents plan for it?
ReplyDeleteMaybe NTUc agents will be the only agents who will speak of retrenchment at every corner and probably the most used word as retrenchment looms .
Why?
They will use retrenchment benefit as the unigue selling point to threaten and to sell their limited pay whole life vivolife. But wait.....what is the catch? The benefit is for only 6 months for waiver of premium...wow!! great feature if that is your only concern.What a joke?
What about your mortgage? your living expenses? your car loan? your kids' education? your other insurance? etc do they carry waiver of 'premium'? You better pay them all or else foreclosure, debt collectors will pay u a visit.
What about vivolife? cancel it and cash out the cash value if there is any.So you see the big bullshit is here. Only product pushers will tout it. There is no advice on planning at all.
Be careful when you commit something. Anyway to avoid risk like this is to avoid insurance agents.
Nice said Mr. Tan. I have been wondering why we are not allowed to use CPF in times of unemployed. And in terms of CPF housing loans, I think they should nv clear CPF balance for downpayment when you just bought a house. Now if ppl just bought a flat at ridiculous $500k, and CPF getting cleared for downpayment, how are they going to settle the monthly installment?
ReplyDeleteThe issue remains there is still no protection under the Employment Acts for PMEs and all those earning above $1,600.00 per month.
ReplyDeleteI had worked through 3 major economic crisis, i.e. 1987 Black Monday, 1997 Asian Financial Crisis and the 2002 slowdown due to SARS. Technically I was retrenched in 2004, although I was fortunate that another job was in waiting. But the compensation offered then was 1 + 1 month for the 13 years I had worked for the Korean company. Fighting for reasonable compensation then was as difficult, if not worst than fighting for compensation for mis-sold Minibonds. There was no petition of this kind.
Approaching MOM or NTUC for help then meant they would tell you "You accepted your employment contract with eyes wide open, the Employment Acts do not protect you, so accept the "1+1" or whatever and move on".
Worst when the economy was bad, we were made to suffer various rounds of CPF cuts. From the 25% employer CPF in 1987 to the low of 10% after the 1997 crisis. When pay was slightly better, middle income earners were hit by the lowering of the salary ceiling for employer CPF contribution.
There was wage re-structuring to introduce variable wage component. So what? DBS is now taking "pre-emptive retrenchment".
One business cycle is about 10 years. But over the last 10 years, we had not seen any efforts to review or improve the Employment Acts. If anyone earning more than $1600.00 is again retrenched in this crisis, there is still no statutory protection to ensure he get retrenchment benefits.
How many firms have adopted variable wage components? Anyway, what difference does it make to expatriate bosses for large firms like DBS, what is "variable wage component" to them?. Retrenchment is faster. Come the next round, employers will ask the Govt. to cut CPF again because it is an easy economic tool.
History will still repeat itself, the Govt. will say "Sorry Singaporeans take a CPF cut, bite and move on".
So if one has to speak up and fight for every cent that you deserve or belong to you, be it your CPF or money invested in Minibond, my take is still on your own "accountability" in order to ensure long term social justice and harmony.
During times of trouble like in recession social and national cohesion is very important. This cohesion is born out of the certainty of the rights and priviledges of being citizens and being part of a community. The bonds, the social glue that bring these together are often invisible based on such things like trust and honour. Whatever the components of that society do and this includes institutions like government departments, monetary authorities and banks will erode such bonds and cohesion if these are done without trust, compassion and honour.
ReplyDeleteIt is important that those who are retrenched attend a course to prepare them for what is ahead. In the 2002 SARS crisis, I have personally conducted such a course and seen how this can help the SIA staff, many of whom are managers and above, move on. It was challenging to absorb these negative vibes as even managers can break down and lament the fact that they have served for so many years yet in their matured state reap such a fate. By leading them through the grief cycle and hearing them out, it helps them refocus and think about the future rather than dwell on the past so that they can move on. It also helps for them to understand that what they are facing is only temporarily although it felt like the whole world is crashing down on them at that time.
ReplyDeleteOf course, the companies that retrench them should be paying for such a course as a gesture of goodwill.
Solve case by case lah, if you see MP after retrenched.
ReplyDeleteToo bad lah, if you are not considered "vulnerable". You should have reserves of your own, like the gahmen, to help yourself.
Mr. Tan,
ReplyDeleteIs there such thing as Retrenchment Insurance?
If so, allow it to be enforced when a person is truely retrenched!
I'm 61 yrs. old and I'm witnessing the worst Recession now.
I was a victim of being swollowed by another company and found the going though at age 52+ ......10 yrs. down the road, my overseas investment is taking care of me now.....No social security or welfare so the LORD is my only source of inspiration!
All my local investment such as UNIT TRUST, could hardly breathe during the 1996/1997 Asian Financial crisis.
Now I look back and say don't even depend on your CPF as the bulk of it is spent in housing and medisave!
Only waiting to collect my annunity at age 62 (maybe $270/-per month) for basic necessity.
YOU have to HELP YOURSELF!!!
This is a good time to unwind all your crap insurance policies, like whole life and endowment , that you have. After all you may need the cash value.
ReplyDeleteDid i hear the insurance agents telling you to borrow or make a policy loans? Ho , No, please don't. The agents are telling you to tie a milling stone around your neck and jump into the sea to make sure you NEVER surface again.It is better to terminate and be finished with the damned rotten product.Of course the insurance companies will be very pleased to loan you. For the companies it is a guaranteed investment with above average return of 8% for them.Where to get ? So don't be foolish and listen to your good for nothing and unethical chek ark insurance agent.
I think it is a good idea to let workers access part of their CPF money.
ReplyDeleteHowever to the PAP this is taboo and there is no way to get this done unless you throw out the PAP.
I think the reason for their reluctance is explained in this way. I have a gut feel, that the govt use CPF funds to invest in securities and "safe" funds.. if they dont do so, how else they can give 4% interest to your CPF account.. this is a real world, the interest comes from investments of our cpf money managed by the Govt and DBS bank.
Perhaps your cpf funds went to feed Mr Lehman Bros, what do we mortals know.. I got a gut feel the govt can't pay everybody the cpf money anyway bec a large part of it had long since vanished. You have a balance in the CPF but is is virtual balance, it is not encashable.
Why else they keep raising the age where retirement money can be withdrawn? The argument of annuity planning is rubbish. If i need the money to eat, or to pay the co-insurance in my medical bill, i just have to use it, why cant i? Why force me to buy annuity when i have some other plans? This is rubbish. But this is a convenient way for the govt to delay the citizens rights to claim the cpf money. It's just playing for time that's the game.
The money's simply not there any more, or at least a substantial portion of it. This is just a gut feeling. We are living in dangerous times worse than 9-11.
It seems that we just barely got out of a recession and now another one that's worst than before. Companies would rather hire younger workers rather than hire older retrenched workers to fill vacanies. That was what happened to my company when my boss told me to collect the application form from the mature walk-in candidate and politely told him to wait for our call (didn't even bother to interview). The candidate was clearly desperate as he had came very early in the morning despite our ad had only asked for write-in applications. The imnage still haunts me till this day and I, at times wonder when it will be my turn.
ReplyDeleteDon't assume u cld find a job easily after yr RT. Many older PMTs (45 above) retrenched many yrs ago still cld not found proper jobs after until now, even when the last few yrs were considered "good yrs".
ReplyDeleteSome of them after lossing their jobs many yrs ago thought that they cld rely on their savings for survival. But lost big sum again in this minibomd saga. So how to survive?
this appears to be a rather simplistic argument. if you've been retrenched, you should have some savings to tide you over instead of having to do "modest withdrawals from the Central Provident Fund savings, or have access to interest free loan provided by the government".
ReplyDeleteif you've been so poorly paid in the 1st place that you do not have any or have almost no savings, then there are some aid schemes (only for the really 'poor')
finally, interest free loans/cpf withdrawals/savings can only last you so long. you need to find a job. i think it's in THIS area that govt needs to do more to make older workers more attractive (and i don't mean by chopping their CPF contributions)
Retrench now.
ReplyDeleteAfter a short while, people forget. So can hire more FT.
So DBS (don't be sporean).
Dont talk abt retraining. It is like adding insult to injury.
ReplyDeleteAfetr lossing yr jobs, u loss more money going for courses.
Then people laugh at u, y are u so lousy. after jobless for so many yrs sure cannot find job again.
perhaps they should retrench some MAS officers for not doing their job right.
ReplyDeleteHow about early retirement for some DIRECTORS in MAS?
Many who borrow money for private property are also quite liquid as it's mainly from their CPF.
ReplyDeleteIt's advisable to increase the monthly payment so that they will SAVE A LOT OF INTEREST and reduce the period of loan.
Get banker to print out a report to estimate how much you can save and also charges incurred to determine.
i almost sunk 4 x 166K each for my kids to AIG. WTF. they promise me after 55/60, every month I get 8000 from each of my endowment, base on the forecast projected earning of their 'mini-bond' type of investment in USA now 'Toxic CDOs', Luckily, I flip my coin and said , can this be truth, in the next 15 years?
ReplyDeletei invest in DUrian orchard, at least i can eat durian every months and export to singapore.
The insurance in so creative, they are designed to SUCK dry your wealth.
friends, When i was out of job in 97-98, then in 2003..till now, I had learnt one FACT. DOn't hope high. as you walk, as you talk, as you meet people. do something, make something , save something and always make small money, and save money. Plan, think and write your plan....before you even get fired...
ReplyDeletethen i internet trade, i sell small junks in my house, then i keep finding new products to sell....finally i digged out a business scope that could be 50 million turn over a year, which i am happy to do a few mil of it, as many ppl are jumping in trade.
Now in order to win, i gather funders to invest, and grow this acquisition business which paid my investors 5% a month...turnaround of the products is 14 days...x4,x5,x6,x8...It is a simple business...and it works good time, bad time and recessions...
Top down retrenchment for MAS? I am not surprised they are waiting. it means multimillion dollars severance
ReplyDeletepacket.One month salary for every day
worked.
Last time the gahment was very good, caring & proactive to people's needs & interest. Yet people complain / critise.
ReplyDeletelater people realise the grment was good, but in turn placed too much trust.
Why last time was so good? I dont quite understand. May be they were from opp. before? and understand people's needs & aspiration better?
Morgan Stanley;s warning that its Pinnacle Notes eries 9 and 10 are expected to lose all of their investments (teletex 111 of CNA)
ReplyDeleteWonder any of the 700 investors have also invested in Pinnacle@Duxton?
50 Storey HDB expensive apartments.......what next?. I mean the payments to their apartment if they really lose all their $$$
To 11.28 om
ReplyDeleteWhat sort of businsess? can you mnetion and let us share the idea.
Thanks
Top down retrenchment for MAS,
ReplyDeleteThey are waiting & happy at this moment .They can escape from the headache now.
After getting multimillion dallors severance, they can easily join another government -owned cos or be director of listed company.
Luck & money always go to the rich .
to 8.06
ReplyDeleteAttending AGMs, EGMs...
hehe
Watch out for Fire Sale of properties. Folks who put their monies and timed the maturity of these CLN and hope to use them when the TOP arrives are in for a rude shock. Expect more recessions.
ReplyDeleteTo some of the retrenched DBS staff or RMs who have bought into these toxic junks, perhaps you should join us into awaking the GIANT. Give Mr. Tan you side of the story and if it is what we have suspected all along , you make our voices stronger.
ReplyDelete