Saturday, March 10, 2012

Guide to Business Simulation Game

This guide shows how to play the Business Simulation Game (BEST)

You can now create your own game at any time, for any type of business, and play it against the simulated players. Other people can join your game.

FISCA Financial Planning Workshop - 31 March 2012

This is the last of the financial planning workshop (6 hours) that is sponsored by SGX.
Due to the generous sponsorship, the fee has been specially reduced.
Please attend this talk and save a lot of money by avoiding the bad investments.
To register, please go to (click on Events).

Date: 31 March 2012
Time 10 am to 5 pm (1-2 pm lunch break)
Venue: Singapore Management University (to be confirmed)
Speaker: Tan Kin Lian and Kelvin Ling
Fee: $15 for FISCA members, $30 for non-members

Strong support for Najib Razak

I am impressed with the leadership shown by the Malaysian Prime Minister, Najib Razak. He has abolished the Internal Secruity Act, settled the bilteral issues with Singapore and also cooperated with Singapore on the development of the Iskandar project in Johore. I wish him all the best in the next general election.

Hougang by-election

Here is a report about Prime Minister's statement on the timing of the Hougang by-election.

I have posted my view in The Online Citizen, as follows:

A safe country

Singapore is not as safe as we were led to believe

Our standard of safety must have deteriorated in recent years, and this is not generally known.

Extortion - unprofessional action of law firm

I receive a letter from a big name law firm with a claim that gave the impression that I have infringed that patent belonging to the client. The letter suggested discussion about "licensing arrangement".

I consider that the law firm had made the "request" without any basis and did not carry out proper diligence. By writing under their firm's letterhead, I consider their action to be tantamount to "extortion".

I checked the meaning of "extortion" and found the following explanation from Wikipedia. I will lodge a complaint to the Law Society that the lawyer is acting unprofessionally in "attempting to extort".
Extortion (also called shakedownoutwresting, and exaction) is a criminal offence which occurs when a person unlawfully obtains either money, property or services from a person(s), entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection. Extortion is commonly practiced by organized crime groups. The actual obtainment of money or property is not required to commit the offense. Making a threat of violence which refers to a requirement of a payment of money or property to halt future violence is sufficient to commit the offense. Exaction refers not only to extortion or the unlawful demanding and obtaining of something through force, but additionally, in its formal definition, means the infliction of something such as pain and suffering or making somebody endure something unpleasant.

Dishonest and unethical lawyers

Lawyers are professionals who practice the law. The law in any country is intended to uphold justice and achieve an honest and law abiding society. We expect lawyers to set a good example in honesty, ethics and observance of the spirit and letter of the law.

I have seen many examples of lawyers who act in a deplorable manner for the sake of greed and  professional fees. Here are some examples:

1. Collaborate with dishonest workshops to lodge fraudulent claims for motor repairs on insurance companies.
2. Write investment contracts (actually scams) to take away the savings of unwary investors and make complex arrangements with overseas parties to thwart legal action for recovery by aggrieved investors in Singapore
3. Write legal claims to intimate third parties for infringement of patents or copyrights, when the lawyer know that their client does not have any basis for the claim.

I have personally experienced all of the above deplorable behavior of lawyers during the past years. I have lodged complaints to the authority and have been disappointed at the lack of follow up action. Over the years, the situation has gone from bad to worse.

I would be more understanding if the deplorable behavior was conducted by sole practice lawyers struggling to make a living. I have found that the big name and the old time legal firms, who are supposed to be the respected members of the legal fraternity, are now engaged in these questionable activities. This is how bad the situation has become.

Tan Kin Lian

Friday, March 09, 2012

Unclear communication from lawyer firm

I have been developing the taxi booking system for the past three years. It has now gone through phase 5, i.e TABS 5. All the development were done using our initiative and by trial and error. I just received a letter from a big law firm in Singapore that suggest that I am infringing somebody's patent. It reads as follows:

I find your letter to be written in a complex manner. Can you state clearly what you are referring to and in what manner you are alleging that your client's patent has been infringed? I find this type of communication to be deplorable.

No claim discount on motor insurance - reporting an accident

Direct Asia explains their approach towards No Claim Discount on motor insurance and also the practice of the market.

A policyholder will lose the NCD when he reports an accident and is assessed to be liable for the accident, whether or not a claim is actually received. However, if he is not liable, he can still make a claim and will not be penalized for the NCD.

CPF Life - new plans from 2013

From 2013, the Government will be offering only two plans under CPF Life, instead of the four plans that are available now. I agree with this approach, as the public found it difficult to choose between the four plans.

There are still a lot of doubts with the two plans, i.e. the diminishing amount of the bequest as the years go by, and 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 buy a product that they do not like, using their own savings.

Many years ago, I gave the following suggestion to the CPF Life public hearing committee:
I recommended that they should not make CPF Life compulsory, but make it voluntary and attractive. 
I had recommended that CPF Life should only make a payout after age 85, i.e. the CPF member will continue to get the payout up to 85 from the retirement account. I also recommended that the cost of the post 85 CPF Life, estimated to be $10,000, should be 50% subsidied by the Government, and it should be voluntary.
It will be sold as follows. 
About 50% of people at 65 will live beyond 85 and will not have any money left, as their retirement account will be depleted at that time. To get a monthly income of $X Isorry, I forgot the amount) payable from 85 to death, you can buy CPF Life. It will cost $10,000 at age 65. If you buy CPF Life, you only need to pay $5,000 as 50% will be subsidised by the Government.
But do remember, the members who die before 85, the money paid will not be refunded, as it will be used to pay the payout to those the members who live beyond 85. This is the concept of risk pooling. 
This scheme is voluntary.
Unfortunately, the public hearing committee did not take up my suggestion. Now, we have a messing 4 plan CPF Life wihich will be converted to a 2 plan CPF Life and still many people who are unhappy about the plan. 
Unfortunately, they did not accept my suggestion and come out with a convoluted (extremely complex and difficult to understand) plan, which is typical in Singapore. 

Thursday, March 08, 2012

Straits Times survey highlight "honesty" as the top value

The Straits Times carried out a survey and found that "Honesty" is rated at the top among the values that Singaporeans found to be most important. This survey was carried out for the purpose of teaching the right values in our schools.

Does this reflect that our society has become somewhat dishonest and that this value need to be re-affirmed? Can you identify the areas, regarding honesty, that need to be improved? 

Wednesday, March 07, 2012

No claim discount on motor insurance

I sent this letter to the General Insurance Association and to my own insurance company.

I wish to enquire about the application of No Claim Discount.
I understand that the NCD is reduced on renewal if there is a claim lodged against the policy during the period of insurance.
If the policyholder makes an accident report but does not make any claim (and there is no claim from the other party), does the policyholder loses the NCD?
Someone told me that it is now the "market practice" for the NCD to be impacted, if there is a report of an accident, even though no claim may be lodged.
I teach Insurance in SMU and need to give to my student the current "market practice".

CPF Life - an analysis of the new plans to be introduced in 2013

I have analysed the Standard Plan and Basic Plan offered by CPF Life form 2013. I have also made some comment on the better terms that are offered for people who smaller savings, compared to those with higher savings. The question is - who is subsidising the lower income? [Tan Kin Lian]

My article is now available for members only in the FISCA website,

Simplify requirements

I wanted to apply for internet banking payments through my corporate account (which was already opened a few years ago). The bank sent to me a very complicated form with more than 100 boxes to be filled in. Being unfamiliar with this form, I do not know how to proceed. The bank staff had to help me by filling in the parts that are needed. I still have to sign on several places in the form (and I do not know what are the liabilities for making mistakes). I also have to get a board resolution to be passed, and also for the resolution to be certified by a secretary (who does not work in my office).

Why do our banks create so much trouble for a simple request? I am able to write checks, so making internet banking payment is a simple extension to this function.

I suspect that this type of hassle is created by a requirement of the Monetary Authority of Singapore. I want to tell the Government that they should review all these hassles that add to the cost of doing business in Singapore.

Higher allowance for National Service

I welcome the decision to give a higher allowance for our National Servicemen.$60-for-NSFs,-NSmen

More needs to be done to level the playing field for our NS men who are disadvantaged in competing in the job market against foreign workers and females. The allowance need to be increased further and the period of National Service shortened in stages, eventually to 12 months.

I like the system of conscription in Switzerland. Like Singapore, Switzerland is a small country that needs a strong defense capability to ensure their independence. They are able to find a system that is fairer to their citizens. See


Switzerland has mandatory military service for all able-bodied male citizens, who are conscripted when they reach the age of majority, though women may volunteer for any position. People determined unfit for service, where fitness is defined as "satisfying physically, intellectually and psychically requirements for military service or civil protection service and being capable of accomplishing these services without harming oneself or others", are exempted from service but pay a 3% additional annual income tax until the age of 30, unless they are affected by a disability. Almost 20% of all conscripts were found unfit for military or civilian service in 2008; the rate is generally higher in urban cantons such as Zurichand Geneva than in the rural ones. Swiss citizens living abroad are generally exempted from conscription in time of peace while dual citizenship by itself does not grant such exemption.[26]\

Military service for Swiss men is obligatory according to the Federal Constitution, and includes 18 or 21 weeks of basic training (depending on troop category) as well as annual 3-week-refresher courses until a number of service days which increases with rank (260 days for privates) is reached. (It is also possible to serve the whole requirement at one piece, meaning no refresher courses are required.) Service for women is voluntary, but identical in all respects. Conscientious objectors can choose 390 days of community service instead of military service. Medical deferments and dismissals from basic training (often on somewhat dubious grounds) have increased significantly in the last years. Therefore, only about 55% to 60% of Swiss men actually complete basic training.
My view. The duration of National Service is too long in Singapore. I suspect that it has cause harm to the education and employment prospects of our male citizens. I hope that we can adopt the Swiss model.

US Presidential Election - Obama's message

I am glad that Barrack Obama has a good chance to be re-elected. He has the right vision for America and the world. We only need him to get the support of the American people and to have a friendly Congress.

Straits Times Forum Page - 7 March 2012

I wish to give my views on the points raised in some of the letters published in the Forum Page.

1. Mr. Anthony Pragasam said that higher fuel surcharges imposed by Singapore Airlines penalise passengers who redeem frequent flyer points. While I agree with Mr. Pragasam's point, I also wish to state  the increase in fuel prices are an additional cost on air travel which were probably not factored into the calculation of the original redemption of the free travel redemption. Also, the fuel charges are expected to be temporary and could be withdrawn when the fuel prices come down (hopefully).

2, Ms. Tan Lin Neo said that senior's housing needs are more important than playground and carparks. She was referring to the protests from residents of Toh Yi against the development of studio apartments for the elderly in their neighborhood. I agree with Ms. Tan. I hope that the our people can be more understanding of the need to develop facilities in our limited land space to cater for the needs of other people. I do understand the feelings of owners who have paid high prices for their flats only to find that the neighborhood had somewhat "deteriorated". Perhaps, the HDB could consider building some other facilities that could enhance the value of the neighborhood that can compensate for the perceived "deterioration".

3. Mr. Jaffer Sadiq, Mr. Thng Tien Guan and Ms. Kelly Kishore Mel have written about the impact on employers and the unintended consequences that could arise from the change in law that mandate maids should be given one day off each week. I agree with their points, particularly on the removal of the maid levy and the security deposit.

4.  Mr. Hilarion Goh wrote about the problem that "day off for maid" regulation would cause to him in taking care of his mother (who suffer from dementia), especially as he is the only member of the family and has to work irregular hours and to travel abroad. I believe that there is provision in the regulation for the maid to be paid in lieu of having a day off. Perhaps this arrangement could solve his dilemma.

5. The Law Society has written to give the reason why they do not favor fee guidelines. I understand that this is not really their decision but is a consequence of the ruling by the Competition Commission against fee guidelines by professional bodies. I disagree with the Competition Commission and will be writing on this matter separately.

Tan Kin Lian

Rise of pawn shops and loan sharks

Hi Mr Tan,
I have followed your blog since your presidential election bid last year, you come across as an honest and outspoken individual with unique views and solutions.

I wonder if you have seen the rise in jewelry and pawnshops in singapore in recent years, just along AMK central there are 4-6 competing pawnshops in a row.

In the unsecured personal loans space, there is remarkable loan growth as well, from DBS cashline, Citibank ready credit etc. This largely involves high 20% annual interest rates or similar.

There is a segment of the market trapped in a perpetual debt cycle, 'rollers' and their debts keep ballooning until they default. Loansharking is on the rise, even for small sums.

Can a study be done, anonymously government-style, to eliminate these negative trends, find out who are the people borrowing this money, and help them before they become a greater social problem, that will cost more in future, using a targeted approach and avoid consequences of jail/broken families/productivity loss etc.

The Government should require the pawnshops to keep records of their customers to allow counselors to track them down.

I have observed the rise of the pawn shops and posted this blog

Regarding the survey, sorry, it does require too much resources and I don't have them. I suggest that you write a letter to the newspaper and see what is the reply from the government.

Tuesday, March 06, 2012

Test of economic fairness

Quote: Obama's test of economic fairness is whether a person working hard at a full time job is able to set up a family, send his children to college and retire properly. I think Singapore fails this test miserably - a large segment of our population will not have enough to retire properly based on the number that will not be able to accumulate the minimum sum by retirement age[how many will have $131K by age 55] and the large number on workfare [Link] people who don't even make enough for basic living.

Plight of Fandi Ahmad

Revised CPF Life - at a glance

This is the annex taken from the MOM media release. It shows the payout under the revised CPF Life scheme to be implemented from 2013. I will be writing about the projected yield under these plans.

Fraudulent third party claim

Here is a common situation encountered by motorist in Singapore. If you have been driving for many years, there is a chance that you might encounter it personally or know of a friend who has met with this event.

Motorist X was involved in a minor accident with another vehicle driven by motorist Y. Both parties agreed that it was a minor dent and agreed not to file an insurance claim. Motorist X might even have agreed to pay a small sum to the motorist Y to repair the dent. Motorist X thought that was the end of the matter.

A few months later, motorist X received a letter from a lawyer acting for motorist Y claiming a large amount for the repair of the damages caused by that accident. There were photographs showing the serious damages to motorist Y’s vehicle, which were aggravated. It was accompanied by a surveyor’s report and possible a witness’ report that motorist X caused the accident.

Motorist X was in a state of shocked at the large size of the bill. He reported the claim to his insurance company, which prompted denied liability as motorist X failed to observe a condition in the policy to report an accident within 24 hours.

What can motorist X do?

I will be posting the reply to this question in an article that will be made available only to members of FISCA. You can visit the FISCA website ( to see the information pages (that are updated regularly). Some pages are reserved for members and other pages can be viewed by the public.

You can also view the event pages (showing the educational talks conducted by FISCA) and register to be a member of FISCA.

Wall Street Wants the Obama Tax Plan

Republican party leaders may be surprised by the results of a new poll of institutional investors: A majority of them want Washington to fix the deficit the Obama way, with both spending cuts and tax hikes.

Tax the rich

Quote: It is patriotic for the rich to pay a supplementary tax to help the country get on its feet.

My view: It is also helpful to reduce the over-charging and greed that is quite common in the business world today.

Monday, March 05, 2012

Fair comment, without malice

I am quite disappointed to read this "apology" given by Gordon Lee for allegedly misquoting Hri Kumar. I consider that Gordon Lee's earlier quote was fair comment and done without malice - and there is no need to "apologise".

If Hri Kumar was misquoted, he could have written to The Online Citizen to correct the mis-information. This is done quite often in the Straits Times. You can read my comments at the bottom of the article.

I do not like the climate of fear, anxiety and paranoia in Singapore. It is unhealthy. I wish to call on our political leaders to find more appropriate ways, rather than use a lawyer, to correct any misinformation, if they feel a need to protect their reputation.

Do we need to collect school fees?

I wonder why the Government still want to collect school fees, or the supplementary fees and second tier fees, when the amounts are quite small. See this webpage for details of these fees. It causes a lot of administrative work for the teachers and the schools and for the parents. Some students from poor families are not able to pay the fees and they have to be detained in school at the end of the term, until the parents pay the fees. Is it really useful to create this type of work and stress?

I am referring to the fees for primary and secondary education. Perhaps, the fees can be collected for post-secondary education, but should be waived at the lower levels.

Sunday, March 04, 2012

Low income tax payers hit jackpot

Masters degree and unemployed in Singapore

Many countries have laws to protect their citizens,  but not Singapore.

Adjusting budget allocation

Lucky Tan said that the Government can adjust the budget allocation and put the money to better use, rather than argue that higher social spending mean more taxes. His arguments are convincing - much more than the convoluted arguments of our ministers.

It is possible for a low income earner to buy a HDB flat

Deputy Prime Minister, Finance Minister and Minister for Manpower, Tharman Shanmugaratnam said in Parliament that a person with a monthly income of $1,000 can afford to buy a HDB flat. Many people found this statement to be unbelievable. Two ministers and one Member of Parliament came forward in his defense and explained why it was possible. Their explanations were still not accepted by most people, who gave their views in the Internet.

I agree with the calculation put forward by Minister for National Development, Khaw Boon Wan. A two room HDB flat cost $100,000. After deducting a HDB grant of $60,000, eligible to certain people under certain conditions, the net cost is $40,000. The monthly repayment over a 30 year loan period, at an interest rate of 2% per annum, is $150. This can be covered by the CPF contribution. There should be no dispute over this figure. Even if the interest rate were to increase to 4% at a later date, the monthly payment would still be less than $200.

The argument by the critics focus on another point - how is the family going to survive on $800 a month. This is a separate matter. It shows the importance of raising the earnings of those at the lower income brackets. There is strong argument for a minimum wage to be implemented in Singapore, to follow the example of most other developed countries.

I guess that a minimum wage in Singapore should be around $1,400 a month. Together with CPF contribution, the cost to the employer should be $1,600 a month.

The Government does face a dilemma about implementing a minimum wage. Already, Singaporeans are more costly than foreign workers. Any increase in the cost of employing Singaporeans through a minimum wage must make them even less competitive. And it will increase the burden on small companies that are not able to cope with meeting the high cost of doing business in Singapore.

In the past, the Government tried to address this issue by giving a workfare income supplement to low income workers. Like many convoluted (i.e. extremely complex and difficult to understand) schemes introduced in Singapore, it did not seem to give much help to the people in need, apart from creating a lot of wasteful administrative work.

There are ways of addressing the challenges, but the Government must be prepared to consider other options, rather than stick to the old approach. In the past, it was difficult to find a solution as there were separate ministers in charge of manpower and finance. We now have the unprecedented situation of one minister being in charge of both portfolios, in addition to being the Deputy Prime Minister!. He now have the power to find a more holistic solution - but does he have the time?

If he does not have the time,  he can appoint some people to find the solution. It would be better to get people from outside the old circle that came out with the old approach. Instead, we need fresh ideas. 

Service standards in Singapore

Read this article about the service standard in Singapore and the observation that past campaigns did not seem to work.

I agree with the observation of the writer. The poor quality of our service standard is the outcome of our environment in Singapore, i.e. dependence on foreign workers, too much time spent on unnecessary work and lack of respect for the customers. Sad to say, it is also a reflection of the attitude of our government leaders.

Key economic policies

This is an excellent article that explained why some of the key economic policies of the PAP Government are not producing the right outcomes for the people

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