Saturday, January 05, 2013

Future Presidential Election

Dear Mr Tan,
I was reading up on the recent AHTC saga with AIM and I came across your blog posting.  In your blog, you came across as intelligent, mature in thinking and non-partisan.  I must say that I was very surprised as this is very different from the way you were portrayed by the main stream media during the presidential elections.
I am certain that you will agree with me when I say that perception is now reality.  Electorates decide their votes on their perception of a candidate, more than the substance of the candidate.  Two things stand in the PAP's favor.  

Firstly, the political machinery behind the PAP makes it difficult for any alternative candidate.  This edge is however ever diminishing as with the proliferation of social media, the PAP no longer has total control over the spread of information.  

Secondly, the limited time between nomination and election day. As PAP candidates are often serving in political office, they are well-known to the electorate while alternative candidates are usually unknowns.  This second advantage to the PAP can be easily overcome via a concerted effort by the alternative candidate to build his reputation ahead of time.
While I strongly admire you for taking the risk to run in the elections, I must say that your campaign could have been better managed from the PR perspective.  I am a PR Consultant and I specialize in the building, monitoring and protecting of brands and reputations. If you are thinking of making another run for the presidency, I believe that my company can be of service to you .....  

I do not wish to run for a future election, thank you.

Defamatory statements

Alex Au had made a statement somewhat along the following lines,  "if the the Attorney General Chambers and the Corrupt Practice Investigation Bureau are independent bodies, they should mount an investigation into the sale of the town council software to a company owned by a political party". Some people said that this statement could be regarded as defamatory.

I do not understand why this should be the case; I consider it to be a fair statement.

I had met two Swedish public figures and told them about the background to this matter, shortly after they had read the news in the social media about the threat of legal action against Alex Au. Their first reaction was, "This transaction would be considered in our country to be corruption". I did not ask them to explain why this was the case; anyway, they are just expressing their opinion.

I have made several statements in the past that it is the duty of the Monetary Authority of Singapore and the Criminal Affairs Department to deal with the fraudulent investment schemes, rather than allow these schemes to be continued for years.

I considered that I was making a fair statement; although some "tricky" lawyer would write to me stating that I was alleging that these organisations were corrupt, or were neglecting their duty; and in so stating, I had damaged their reputation.

Fifteen years ago, in the course of my company's business, we received this type of "tricky" letter from a lawyer. It took a matter out of context (I forget the details of the matter) and twisted it to make several absurd interpretations followed by the usual bullying demands. We replied to deny all of these absurdities and followed up with a complaint to the Law Society against the unprofessional conduct of the lawyer.  The Law Society did not pursue the matter (for some reason or other); but the lawyer also dropped his demand. We did not really have the time to waste on these trivialities.

Review investment regulations

Due to the prevailing low interest rates, consumers look for investment
opportunities that allow them to earn a return that can at least offset

Many of them were unfortunately badly advised to invest in risky products,
such as the credit linked notes, currently linked notes and other 
structured products based on derivatives. In most cases, the bad advice
was given by the relationship managers working for the banks that they 
had trusted for years.

Some of them were misled into investing in unregulated products, such as
the "guaranteed pay-back" schemes that offer a high return. Recently, 
Geneva and Profitable Plots were raided by the Commercial Affairs Department
for alleged fraudulent practices in promoting these types of schemes.

The Financial Services Consumer Association have been educating the public
about the merits of investing in an index fund, such as the 
STI Exchange Traded Fund that is offered in the Singapore Exchange. This is 
a low cost, diversified fund that is invested mainly in blue chips, and is suitable
for conservative, risk adverse investors to invest for the long term.

Another suitable type of investment is in an insurance linked policy that is offered by
life insurance companies, except that most of these products in the market 
take away 3% to 4% from the yield earned on the investment each year, compared to 
0.3% from the index fund. The high charges in the investment linked policies
make them unsuitable for the public.

While the index fund is the best type of investment for the conservative investors, 
the regulations imposed by the Monetary Authority of Singapore
make it almost impossible for the general public to invest in this asset class. 

The investor is required to pass an online test that requires knowledge of warrants, options,
futures, exchange traded notes, extended settlement contracts, discount certificates and 
callable bull and bear contracts. 

Although I am qualified as an actuary and have over 30 years of investment experience, 
I am not familiar with some of these investment products and would most certainly advice 
the general public to avoid them. Why educate them in the products that should be avoided?

If investors are denied the option to invest in the index fund, some are likely to end up 
speculating in penny stocks and  questionable investments, including overseas stocks, that 
are not suitable for long term investors.

I urge the Monetary Authority of Singapore to review their existing regulation and make it easy
for the general public to invest in the cash-based indexed funds that do not have nay leverage
or derivatives.

Freedom to voice your views

I am posting this comment by Clara Hwang (with her permission), and have done some minor editing. The original comment was posted in my Facebook (

I am a Singaporean who moved to Aussie at the age of 26. I agree with absolutely everything Pamela says.

Certainly, there  are problems with every system in every country. There doesn't exist a flawless system that every citizen is happy with.

However, I feel that the biggest problem with Singapore is that the most basic needs, food (eg ntuc, hawker centers), transportation (mrt, taxis, buses etc), healthcare and so on have been monopolized or in some way or another linked back to the government.

It is designed to be money making enterprises, which is not entirely a bad thing, but one wonders at the end of the day, who does it truly benefit now that problems are arising and no one wants to take responsibility nor listen to the citizens, which is ironic because that's who they are meant to serve and to provide that service.

People make up a country. The government, the multi-million dollar buildings, the expansive greenery that gave us the garden city namesake, a country does not make.

The system was designed for a rapid economic growth and expansion, and granted, that has worked well for the initial 3rd world years up till this flourishing state.

However, in this day and age, Singaporeans are getting increasingly well traveled and well educated and THAT is a huge problem to that same said system because it isn't designed to answer questions or solve your problems, it exists to make money, at all costs including their people's opinions.

That freedom exists here in Australia and look what it has done for the country? People aren't afraid to speak up, or tell you to get up from your seat so the pregnant lady can have it. They are free to voice their opinions and live life however they want without the societal pressure that the cars they are driving or bags they are carrying or flats they are living in aren't fancy enough. That only exists in a tiny denomination here.

People here stop to admire and get inspired by the beauty of an alleyway that has been taken by graffiti artists. Singapore they point and look and say "woah die this fella sure tio caning and jail" and then gossip about it in forums and Facebook.

That's what Singapore needs, to develop a personality from the freedom to voice their rights and unhappiness and most importantly actually be able to physically do something about it.

Clara Hwang

Legal action against Alex Au

I am deeply disappointed at the threat of legal action that the Prime Minister has taken against blogger Alex Au.

I read his four articles again and found that he had been quite fair in his comments and had asked important questions of public interest. I did not find anything defamatory in the articles. (Correct me, if I am wrong).

The defamatory statements could be contained in the comments posted by other people in the article and "approved" by Alex. Many of these comments are posted by anonymous people, who are untraceable - at least to Alex. As there could be hundreds of these comments, it would be impossible for Alex to check all of them.

Most people ignore these comments anyway. I do not see why the Prime Minister should feel offended at comments that are incredible and generally treated like the rantings of mad people. They should be ignored by him or by other people.

I have personally experienced personal attacks, insults and defamatory comments of a more serious kind in the social media. I generally ignore most of them, although on a few occasions I did ask the moderator to remove some of the very bad ones.

Some of these comments could be done deliberately by people in the "Internet brigade" with the sole intention of creating trouble for Alex Au. I have experienced the malicious work of these people in my Facebook (

More importantly, we need to have a society that behave with integrity and fairness; and the leaders should set an example.

Tan Kin Lian

Friday, January 04, 2013

Making a claim under Elder-shield

Many policyholders pay a large premium to be covered under Eldershield. They are worried that when the time comes to make a claim, they have to incur a large cost to get an evaluation of an approved doctor and to find that the claim has been rejected. This case study explains the nature of the concern.

Getting replies from Government websites

I received this email from the CPF each month.  It is difficult to get the reply from the CPF website. The process is time consuming and troublesome.
It is much easier for me if they sent the reply directly to my e-mail address or use the OneInBox that was announced two years ago and still not implemented yet. It is a simple system, but is taking ages to implement. Singapore has become quite inefficient.

Dear Employer
The electronic Record of Payment (eROP) for payment received on 02 Jan 2013 under CPF Submission Number 200700231C-PTE-01 is ready for viewing. To view:

1) Please login to CPF e-Submission website and select "View Record of Payment".
2) Select the Statement No. to view the eROP.

Yours faithfully
Electronic Submission Section
Central Provident Fund Board

Thursday, January 03, 2013

Opening a SGX e-learning account

Here are the instructions to open a SGX e-learning account. This is required for people taking the SGX Online Test to buy ETF.

Wednesday, January 02, 2013

Review of public health care, 2013

The Ministry of Health is embarking on a major review in 2013 to ensure that
public health care remains accessible and affordable to Singaporeans.

I hope that the review should involve all sectors of our society in the spirit of 
the "National Conversation".

Our current system of paying from health care through many sources, known
as the 3M approach, plus personal savings, should also be reviewed. 

We should consider alternative approaches, such as the single payer system, that is used 
successfully in the United Kingdom, Australia, Canada and Taiwan.

A single payer system allows better control of the health care bill and reduces 
the heavy administrative cost.

An alternative approach, used in Japan and several European countries, allows
a large part of the bill to be paid from a single insurance plan, instead of the 
fragmented sources adopted in Singapore.

I have been personally involved in the medical insurance business for a large
part of the past 20 years. I know the practical aspects of managing a national insurance 
pooling scheme and also the confusion faced by the patients of dealing with our 
current fragmented payment system . 

If we have to retain the 3M approach, there is much that can be done to 
streamline the system and remove the gaps and inefficiencies that have been created. It
requires the fundamental flaws to be addressed, instead of the "tweaking" approach that 
has been adopted in past years. 

A group of eminent health care professionals have have put in nine months of study to 
produce a paper entitled "SDP national Healthcare Plan: Caring for all citizens". These 
professionals have personal experience in the provision of health care, know the underlying 
problems and have come out with a possible solution. 

I hope that they will be engaged in the review and their proposals should be considered.

Tan Kin Lian

Monday, December 31, 2012

Balloting of COEs

Singapore introduced the Certificate of Entitlement (COE) for purchase of cars 
22 years ago. It served a useful purpose in controlling the number of cars on 
the road.

Over the years, many people have complained that the system of bidding for the COE 
favors the wealthy at the expense of "more deserving" families that cannot compete in
paying the high price for the paper.

The suggestion of balloting the COEs have been raised many times, but was 
not accepted by the government on economic arguments, that scare resources are
 best allocated through market pricing. With the high prices of COE in recent months, 
the calls for the use of the ballot system have re-surfaced.

Balloting is not unusual in Singapore. For decades, we have been 
using it to assign new HDB flats to purchasers and primary school places to pupils. The system
was also implemented to give higher priority to certain groups, for example, pupils with
siblings in the same school.

If COEs are balloted, it is possible to fix the rice to reflect demand, but there is no need to
suffer the wild swings and panic buying that are seen in the current system. If the demand
exceed supply, the COEs can be balloted, with a higher chance being given
to "more deserving" families, such as families with children or does not now
own any car.

FISCA Talks for 2013

FISCA talk. I urge readers to register for the FISCA talks to be held over the next few months. Details are available here:
The talks are for three hours and the fee is $10 (FISCA members) and $30 (non-members). Join FISCA ($36 a year) and get back more than your fees when you attend two talks.

Wait for lower COE prices

William, an ex- car dealer, advises the public  not to rush and buy a car now, but to wait 1 or 2 years for the COE price to drop.

SGX Online Test

Here is a proposal for someone who wish to get coaching to pass the SGX online test and invest in the STI ETF immedicately.

Invest in an indexed fund

An index fund is a low cost fund that is invested in a stock market index. In Singapore, the index comprise of the 30 largest companies listed in SGX; most of which are blue chips. You can buy the index fund through the STI ETF (offered by SPDR and by Nikko).

To understand more about ETF, read the following articles posted in my blog

Sunday, December 30, 2012

Why I speak out against bad products

Some insurance agents or financial advisers curse me for exposing the bad features of the life insurance products that are on the market today. They write in my Facebook, "how can an veteran of 30 years who has benefited from the business in the past, now talk bad about the business?"

To these naive or crooked advisers, let me tell the honest truth.

When I was in the insurance business, the products offered to consumers take away less than 1.5% from the yield. If the insurance fund earn 6.5%, the consumers take a yield of 5%.

Today, more products take away 3 to 4% from the yield. Some even take away as high as 6 to 8%; which is like daylight robbery.

When the life insurance industry is "robbing' people in this fashion, it is my duty to warn consumers to avoid these products.

Many new insurance agents may not be aware that the products are so bad. They are naive. I like to advise them to calculate the reduction in yield, using the example, shown in this article

Look into the mirror and and ask if you really want your client to suffer this type of loss?

Remember, you have the option of selling the proper insurance package to them as shown here:

Some insurance agents already know the truth, but they like to sell the bad products to earn the high commission. They behave like crooks; I detest them - as much as they hate me.

Letter from the Grave

Lasantha Wickramatunga, the 52-year-old editor of the Sri Lankan newspaper Sunday Leader, who was assassinated on 8 January 2009 while on his way to work by two gunmen riding motorcycles, knew he was a target of assassins and wrote this letter with instructions that it be published after his death.

Find the right insurance package

Here is a tip on how you can find and trust an insurance agent to get the best insurance package for you.

How to evaluate a life annuity

I have often been asked if a life annuity is a good investment. The answer is - depends on what you get for the sum that you have to put in.

This example shows how you can evaluate the life annuity, including a deferred annuity where you have to save now for several years and draw the annuity payout from a certain age.

You have to make an assumption on your life expectancy. It will be suitable to take age 85 for males and 88 for females. This allows for improvement in life expectancy in the future.

The next question that you have to consider if the expected yield, if you invest on your own, instead of a life annuity. It is appropriate to take an interest rate of 5% for long term investment in an indexed fund, such as the STI ETF.

To get a better idea, you can use 3%, 4% and 5% in your projection. See the example in this paper.

It showed that the deferred annuity gives a yield slightly below 4%. This is an acceptable yield, but the drawback is the penalty that have to be suffered, if the investor needs to terminate the annuity earlier. To offset this penalty, the yield has to be better than 4%.

You can use the same approach to evaluate any other type of life annuity, including the more common type, where you have to pay a single premium to buy the annuity.

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