Saturday, August 25, 2007

Two CPF Changes Will Benefit Members

Source : The Straits Times Forum News, Aug 23, 2007

THE Government will raise the interest rate on all CPF accounts combined by one percentage point, with a cap of $60,000, and postpone the Minimum Sum drawdown age from 62 to 65 gradually.

Few Singaporeans would really understand or appreciate the combined financial benefits of the two changes. Some hypothetical examples are discussed here in order to highlight their financial benefits.

Table 1 shows the relationship between the amount in the CPF Retirement Account at age 55 and the amount of monthly withdrawal starting at age 62 for 20 years, under the old system at the effective interest rate of 4 per cent per year.

Assume that a person has only the CPF Retirement Account at age 55.

Table 2 shows how the increase of one percentage point in the interest rate with a cap of $60,000 and the higher drawdown age affect the amount of monthly withdrawal.

As can be seen from Table 2, the lower-income cohort will receive a larger percentage of increment in the monthly withdrawal when compared with their higher-income counterparts. The combined effects of the two changes increase the amount of monthly withdrawal by about 23 to 30 per cent, in the examples considered.

The Promise Of Punggol

Source : The Straits Times Forum News, Aug 24, 2007

Punggol is being touted as the next big thing in public housing. But will the plans and promises first made in 1996, and updated this week, come true? PEH SHING HUEI and LYNN LEE take the pulse of Punggol and speak to the people who make up its past, present and future

RIGHT opposite the pristine Punggol MRT station is the new town's landmark - a haunted house, or so residents here claim.

Once a seaside bungalow of an English family, it stands solitary in a field of unkempt grass, its peeling white paint a sad reminder of failed promises.

It was slated for so much more.

Officials say it is called the Matilda House and was identified by the Urban Redevelopment Authority seven years ago for restoration, conservation and put to community use for Punggol.

Today, the deserted single-storey building is not restored, conserved or put to any use.

Forgotten by the authorities, locals just refer to it as Punggol's haunted house.

And in many ways for the people of Punggol, the fate of Matilda reflects that of their town: forlorn.

As provision shop owner Tan Leong Choon, 47, says in Mandarin: 'The Government spoke about Punggol 21 10 years ago and nothing happened. Now they are talking about it again. But who knows if it's going to happen in the next 10 years.'

Indeed, Punggol is back on the Government's radar.

In his National Day Rally speech on Sunday, Prime Minister Lee Hsien Loong offered a new vision for the town, calling it Punggol 21-plus.

A beautiful future for the north-eastern coastal suburb was painted: Housing Board blocks soaring up along the banks of a pristine waterway, amid greenery, jogging tracks and alfresco restaurants serving Punggol's renowned chilli crab.

The Punggol and Serangoon rivers, which flank the town, will be dammed up to create a freshwater lake. A waterway will run through the estate, linking both rivers.

All of it sounds and looks impressive. But Punggol residents cannot avoid feeling a sense of deja vu.

During his rally speech of 1996, then-prime minister Goh Chok Tong put the original paint on the Punggol 21 canvas.

Touted as a new model for housing here, it was supposed to have both private and public housing, served by MRT and light-rail and with water-sports facilities, marinas and a waterfront park.

Coney Island would be developed into a recreation zone with a park, and bridges linking it to the main island.

A few months after the speech, Punggol 21 - which was part of Cheng San GRC then - became a big election carrot with the People's Action Party dangling it to beat a strong Workers' Party team led by J.B. Jeyaretnam and Tang Liang Hong.

The five-man PAP team won the bruising contest with 54.8 per cent of the valid votes.

But alas, the transformation of Punggol was halted in its tracks by the Asian economic crisis of 1997. Although construction began the next year, it was stopped when demand for new flats nosedived.

As a result, only some 16,000 flats - out of the 80,000 planned units - have been built.

Around 42,000 residents live here, lending the town a quiet laid-back charm, or at night, an eerie silence.

Pointing to the empty bus depot, Mr Tan Tse Chin, 54, who runs a cafe by the MRT station, says in Mandarin: 'This is Singapore's most deserted bus interchange.'

Walk into the bus interchange on a weekday mid-afternoon and chances are, there are more buses than passengers.

With just seven services travelling to places like Aljunied, Bedok and Tampines, the depot is bereft of the buzz found in other town centres.

The four-year-old MRT station - the last stop on the North-East Line - is next to the interchange and looks just as pristine, peaceful and startlingly new.

Fifteen stops were planned for the light rail system, but only seven are in operation.

'Tampines and Simei residents use this MRT stop, but only for transit. They rarely stop for a bite or a drink,' says Mr Tan with a sigh, lamenting that his cafe makes a daily profit of just $160.

'Even Punggol residents just transfer directly from the LRT to the MRT. You don't even see them outside the station.'

But while some are almost disillusioned with this former Malay kampung and Teochew enclave, others cannot wait for the realisation of PM Lee's plans.

Spa owner Doris Lee, 38, has already staked her turf near the site of the future town centre.

She set up a day spa and nail salon six months ago at the MRT station, attending to about 100 customers a month.

'Punggol residents are hungry for any sort of activity. So those who come here tell me that it's good that there's a spa, it gives them something to do, a place where they can relax after work or on the weekend,' she says.

MP Charles Chong (Pasir Ris-Punggol GRC), whose ward includes half of Punggol town, says residents will be watching hawk-eyed to see if the Government delivers on this new vision.

'Something had better happen this time. Most residents understand that the lack of progress was due to the economic slowdown.

'But now they see things have improved. And they won't accept the same excuse again,' says Mr Chong.

Would there be any political backlash if plans do not materialise again?

Mr Chong is quick to reply: 'I didn't even consider that as a possibility. I am sure something will happen before then. Saying so at the National Day Rally was PM's way of telling residents that the Government has not forgotten its promise to them.'

On the national level, Punggol would also show that the Housing Board remains relevant and can more than keep up with rising expectations that Singaporeans of their housing needs.

This injection of new life to this far-flung town will benefit its established icons, like the famous Punggol Restaurant (known as Hock Kee to older customers), once located at the Punggol Point jetty but now ensconced at the Marina Country Club.

Says manager Ting Cheng Ping, 44: 'Singapore's population will grow, the vacant units here will be filled up in no time. You have the rivers, the sea and a rustic charm that are very hard to find anywhere else in the country.'

That is the hope, that Punggol will soon claim its long-awaited place as the shining new town that is the envy of all Singaporeans.

That it would somehow rediscover its status as a town for foreign dignitaries, like in 1951, when then-United States vice-president Richard Nixon - who later became president - paid a visit.

That it would somehow lay to rest the ghosts of its recent past, and see its iconic Matilda waltzing once again to the gentle sea breeze by its calming shores.

S'pore Flyer: 1.5m Tickets Sold - Fully Booked For First Three Months

Source : The Straits Times, Sunday, Aug 26, 2007

1.5 million people have already booked tickets to board the world's tallest observation wheel, the Singapore Flyer. The ride costs $29.50 and lasts for about 37 minutes. -- ST PHOTO: STEPHANIE YEOW

THE Singapore Flyer looks like it will be the coolest thing going around next year with 1.5 million people already booked to take a spin.

That means the Flyer, which can take 784 passengers at a time, is already fully booked for its first three months once it starts turning on March 1.

Local tour agencies have snapped up 60 per cent of the seats since sales started in April with corporate clients such as banks and trading firms and individuals reserving the rest.

A ride on the Flyer - the world's tallest observation wheel at 165m, or 42-storeys high - costs $29.50 and will last for about 37 minutes.

General manager Cynthia Yeo, 30, has already staked a claim to being a frequent Flyer having bought 26 tickets for March and August dates.

Ms Yeo and her husband have been closely following the construction process since the Flyer's main structure arose on the Marina Bay site in April.

They had no qualms shelling out more than $700 on tickets as the days they picked were special - the March date is near her mother-in-law's 58th birthday and the other is National Day.

'I'm sure it will be a wonderful experience because of the beautiful view. From that height, we'll get to see Singapore, Malaysia and Indonesia too,' said Ms Yeo.

Her tickets on National Day will allow her family to take a ride in the late evening - right when the fireworks are likely to be going off.

Ms Yeo added: 'Noone in my family has ever attended the parade so I decided to treat them to a display of fireworks from the Flyer.'

Singapore companies are also booking ahead for corporate events.

Trading firm Brilliant Corporation, which usually holds company functions in country clubs and hotels, has decided to host 260 guests for a charity event on the Flyer next May.

Managing director Mark See said: 'We are always looking for unique venues to entertain our clients so the Singapore Flyer, which is poised to be the nation's next iconic attraction, seemed a good choice.'

But travel agencies seem to be the most interested in booking large blocks of seats.

A spokesman for the Adval Brand Group, the Flyer's marketing agent, said travel agencies have been eager to include the big wheel in packages, as they believe tourists will see it as a 'must do'.

SH Tours general manager Wendy Leong said her company has paid more than $88,000 for 3,000 tickets in response to demand from its overseas agents.

'We did not want to lose out to other agencies and wanted to avoid the rush for slots, so we made a mass booking,' she said.

SH Tours expects a surge in business of about 5,000 tourists from mid-February onwards, the peak holiday season.

Madam Leong is confident the Flyer will attract many tourists: 'It will also inject something new into our current packages, which makes it easier for us to package our tours to overseas agents.'

She said the booking frenzy does not surprise her, given that an adult ticket for the Singapore Flyer is cheaper than one for the London Eye, which costs 14.50 pounds ($44).

Complaints Against Unethical Housing Agents On The Rise

Source : The Straits Times, Sunday, Aug 26, 2007

57 complaints filed with Case from Jan to July, up from 32 in same period last year

AN OFFER of $438,000 for his HDB maisonette looked like a pretty good deal to Mr Simon Huin - until he found out his property agent had pulled a fast one.

The agent had kept a higher offer from Mr Huin - one that would have given him $7,000 more for his Geylang East home.

That offer had come from another agent but doing this deal - it is called co-broking - would have required Mr Huin's agent to share the 3 per cent commission.

Mr Huin, a 55-year-old project coordinator, was furious and reported the agent to the Consumers Association of Singapore (Case).

It is becoming a familiar story with the number of complaints against errant agents shooting up amid a hot property market. Case received 57 complaints from January to July this year, compared with 32 in the same period last year.

The Singapore Accredited Estate Agencies (SAEA), received 46 complaints against agents in the same period this year, up from 31 cases last year.

Most gripes are about agents offering poor service or misrepresenting facts.

'These unethical agents who work for their own interests shouldn't be tolerated,' said Mr Huin, whose case is being investigated by Case and the Institute of Estate Agents (IEA).

If the IEA finds that the agent had behaved unethically, it will strengthen Mr Huin's case should he decide to sue for damages.

Agents who want to pocket both the seller's commission and the buyer's fee may refuse to co-broke but that usually greatly reduces the number of buyers viewing a home.

It also goes against industry guidelines, which state that agents should always co-broke to safeguard a client's interest.

But when The Sunday Times - posing as a buyer - called 10 agents listed in the Classifieds, four flatly refused to co-broke.

There are 18,500 agents in Singapore registered with the IEA. Between April and June this year, 12,897 transactions were made in the private residential market - more than double the 5,767 in the same period last year.

Experts believe some agents are rushing to seal deals and cutting corners.

Tenants face the same problems. Expatriate Laura Thornton-Olivry, in her 30s, has thrice failed to get a rental home because agents upped the price even after she had signed letters of intent and handed over cheques.

The housewife is one of 13 frustrated people who have written to The Straits Times' Forum page in the past eight months, calling for agents to be licensed, to curb unethical practices.

Property agencies agree. Although anyone can become an agent now by completing an agency's in-house training, the SAEA aims to have all agents accredited by 2009. Those found to be unethical can then be expelled or suspended.

But there is no regulatory body to enforce accreditation. As PropNex's chief executive Mohamed Ismail pointed out: 'As long as there's no central regulatory body, there will be unethical agents who simply move on to another agency when fired.' Like most estate agencies, he wants the Government to step in.

The SAEA advises people to use only the 6,000 accredited agents listed on its website. At least they can be held accountable.

Down with unscrupulous agents

‘These unethical agents who work for their own interests shouldn’t be tolerated.’ MR SIMON HUIN, 55, a project coordinator whose agent withheld a higher offer for his HDB maisonette

Up with proper regulation

‘As long as there’s no central regulatory body, there will be unethical agents who simply move on to another agency when fired.’ MR MOHAMED ISMAIL, PropNex’s chief executive, calling on the Government to step in

Private Home Owners To Enjoy Enhanced Upgrading At Estates Soon

Source : Channel NewsAsia, 25 August 2007

SINGAPORE: The Estate Upgrading Committee, which currently manages projects in selected private estates, will be revamped to oversee and coordinate all major upgrading works across different agencies in private housing estates.

This will help tackle the problem of lack of coordination, which is often raised by private home dwellers in feedback sessions.

The committee, chaired by Parliamentary Secretary for National Development Dr Maliki Osman, will also be reconstituted to comprise senior representatives from public agencies such as National Parks Board and the Land Transport Authority.

Private estates will also have access to the Community Improvement Project Committee (CIPC) funds soon.

The funds, currently restricted to HDB estates, will allow minor and ad-hoc upgrading works outside the major upgrading windows.

A pilot programme in three GRCs will be initiated. Citizens’ Consultative Committees in Aljunied, Holland-Bukit Timah and Tanjong Pagar will soon have more resources to act on behalf of their private estate residents, and to coordinate with government agencies on maintenance matters.

These measures were announced by the Committee on Private Estates and the National Development Ministry on Saturday.

Prime Minister Lee Hsien Loong had also spoken about some of these measures in his National Day Rally speech last Sunday. - CNA/ac

Horizon Towers Sellers To Discuss Options On Wednesday

Source : The Straits Times, 25 Aug 2007

HORIZON Towers flat sellers will meet next Wednesday in a push to raise millions of dollars to fight a lawsuit by Hotel Properties (HPL) and its partners over a botched collective sale. Another meeting is due to be held on Sept 7.

In a protracted saga, the HPL consortium has been trying to buy Horizon Towers for $500 million, a price inked in February.

But the collective sale hit a brick wall earlier this month when the Strata Titles Board (STB) threw out the estate’s sale application as the paperwork was not in order.

The sale lapsed as the would-be sellers had included an Aug 11 sale deadline in their contract. The HPL consortium then asked flat owners to extend the deadline so the application could be refiled or an appeal could be made for the sale to go through - but the sellers declined.

On Thursday, the buyers filed a High Court lawsuit over the failure of Horizon Towers’ owners to go through with the deal.

A flat owner keen on contesting the lawsuit said: ‘We are going to raise $3 million to $5 million to fight it.’ Each of the 177 units may have to pay about $30,000.
He said they will put this move to the vote at next week’s meeting. But some owners keen to sell the 99-year leasehold Leonie Hill estate are said to be very upset at how the deal has panned out, as they had wanted to extend the deadline so the sale could go through.

‘We never wanted to fight it,’ said one of them.

If the $500 million sale had gone ahead, owners of the 199 apartments would have reaped about $2.3 million each, while owners of the 11 penthouses would have received at least $4 million each.

If the HPL lawsuit succeeds, the majority owners could be forking out a lot more in damages.

HPL and its partners have estimated their lost profits at up to $1 billion. At that rate, owners of the 177 units who agreed to sell could end up paying more than $5 million per unit.

Now, they have two options, observers say. They can either give in and do whatever is necessary to complete the sale or contest it.

The former means the sale goes through at $500 million. They get their proceeds and will probably have to pay some damages.

If they fight, they could start third-party proceedings against other parties involved in the sale process to claim back the damages.

These parties could be the sales committee that represent the sellers, the property agent which marketed the estate and the sellers’ lawyer which usually prepares the sale documents for the STB application.

ECB Rate Rise Uncertain, Asia Sub-Prime Fears Grow

Source : The Business Times, August 25, 2007

NEW YORK/LONDON - Central bank officials said market turmoil made a euro zone rate rise far from certain while three Asian banks' heavy exposure to the limping US home loan sector reinforced global credit worries on Friday.

In the US, the Federal Reserve refrained from open market operations ahead of a weekend for the first time since May, helping steady markets, while economic data from July pointed to economic strength just before credit markets began to tighten.

Major US share indexes rose more than 1.0 per cent as unexpectedly strong data on home sales and durable goods relieved anxiety about the economy.

Earlier in the day, national central bank officials said the ECB was focusing on financial market turbulence, saying it would be the decisive factor in determining whether it raises rates by a quarter point to a six-year high of 4.25 per cent.

Investor nerves were kept on edge as Singapore's DBS Group Holdings, state-controlled Bank of China and its Hong Kong subsidiary, BOC Hong Kong , revealed a combined exposure to the US sub-prime mortgage market of almost US$13 billion.

The news raised fears that Asian banks, generally risk averse following the Asian financial crisis 10 years ago, were more vulnerable to the crisis as investors had thought.

Stock markets tumbled from Sydney to Seoul in response but later on Friday, European and US stocks were firm.

'If there is a normalisation in the markets a rate hike is still possible. If not the ECB will wait with the next step,' said a senior official at a euro zone national central bank. -- REUTERS

Reits A Safe Choice In Roily Market: Goldman

Source : The Business Times, August 25, 2007

SINGAPORE'S real estate investment trust (S-Reit) market could be just the place to park your funds while weathering the storm in the equity markets, says Goldman Sachs executive director (Asia-Pacific Investment Research) Leslie Yee.

In a report on S-Reits, Mr Yee said: 'We reiterate our positive view on S-Reits and recommend investors to buy in the prevailing choppy equity markets.'

S-Reits were sold down recently but Mr Yee believes the market is 'under-appreciating the defensive qualities and overstating risks'.

Goldman Sachs highlighted four attributes that make Reits 'defensive'. These are: low gearing, typically about 40 per cent; income payout which is often 100 per cent; secured leases, usually for three years; and limited development risk.

The report said that the current market volatility will affect the near-term ability of Reits to access capital market funding, but Goldman Sachs believes Reits have the necessary debt capacity and expect that equity markets will be willing to fund good acquisitions.

Goldman Sachs S-Reit Index has fallen by 11.8 per cent since July, which is slightly less than the decline in the Singapore property stock index of 15.3 per cent.

It has also lowered its target price for the nine S-Reits it covers by 0.5-10 per cent. Based on revised target prices, these S-Reits offer an upside of 7-37 per cent.

In particular, Goldman Sachs has added CapitaMall Trust to its 'Conviction Buy' list. It has upgraded Suntec Reit to 'Buy' from 'Neutral', and reiterates 'Buy' on K-Reit.

Goldman Sachs also likes sponsored Reits. And it does not matter if a Reit does not pay top dollar for a sponsor's asset. 'Our analysis on the sale of a completed asset shows the net benefit to a developer is roughly the same from selling to a Reit or from selling to a third party at a price that is nearly 20 per cent more,' explained Mr Yee.

He said: 'We see the current market providing a good entry point into Reits', noting the sector leader's - CapitaMall Trust - pull-back of 20 per cent from its share price two months ago.

In the near term, it does see cost of funding for acquisitions like the one-third stakes in One Raffles Quay by K-Reit and Suntec-Reit as a major risk.

But in the long term, it sees potential for growth through acquisition and argues that 'win-wins' can be created when a developer sponsor sells assets to Reits.

Goldman Sachs launched its Reit coverage in January when it also forecast the nine S-Reits would make $15 billion in acquisitions within a three-year period, boosting portfolio sizes by 75 per cent.

Based on announced acquisitions to date, the nine Reits have made $3.9 billion worth of acquisitions, which is 27 per cent of the target.

MAS Again Reminds Banks To Check Sub-Prime Exposure

Source : The Business Times, August 25, 2007

Remark comes after DBS says exposure more than thought

(SINGAPORE) Singapore's central bank yesterday reminded banks for the second time this month to take a close look at their books, after the city-state's biggest lender DBS admitted greater exposure to US mortgage debt.

Four of Asia's biggest banks, including DBS and Bank of China, have revealed bigger-than-expected exposure to the US sub-prime mortgage crisis, prompting investor fears that Asian lenders were not as immune as hoped.

'MAS continues to monitor the development of the US sub-prime market and the financial institutions' exposure to this sector as part of our market surveillance process,' the central bank said in an email to Reuters.

'We also continue to remind (financial institutions) to factor in the current environment into their regular stress testing and take appropriate action where necessary.' The comments by the Monetary Authority of Singapore were prompted by DBS Group Holdings' admission yesterday that it has nearly double the direct exposure to collateralised debt obligations than previously declared.

Shares in DBS fell more than 2 per cent after it was disclosed that it had more holdings than initially declared. Broker CLSA had said in a report this week that while Singapore banks have limited exposure to collateralised debt obligations, DBS may have $2.4 billion worth of CDO holdings - nearly double the $1.3 billion direct exposure it had initially declared.

It said DBS may have more direct CDO exposure through a special-purpose vehicle that had commercial paper backed by $1.1 billion worth of CDOs, with the paper due for renewal.

A DBS spokeswoman confirmed the figures in CLSA's report but said: 'We are comfortable with our exposure to the conduit.' Macquarie Bank said if DBS holds the CDOs to maturity, it should not see significant losses from marking to market. -- Reuters

DBS Exposure To US Sub-Prime About $2.4b

Source : The Straits Times, Sat, Aug 25, 2007

DBS Group Holdings confirmed yesterday its exposure to the United States sub-prime mortgage crisis is about $2.4 billion - almost double the amount it had acknowledged previously.

The disclosure sent its stock falling by as much as 60 cents yesterday, hitting a low of $19.90 before clawing back to close 30 cents lower at $20.30.

The increased extent of DBS' exposure was revealed in a report by broker CLSA this week.

DBS had stated about two weeks ago that its exposure to collateralised debt obligations (CDOs) - financial instruments backed by bonds and sub-prime mortgages - was US$850 million (S$1.3 billion). It also stated that it had distributed US$1.7 billion of structured products involving CDOs to institutional and private banking investors.

But CLSA said DBS has direct exposure to $1.1 billion worth of CDOs via a special investment vehicle called Red Orchid. This vehicle holds commercial paper - a type of corporate debt usually due in nine months or less - which is invested in CDOs.

This paper is due for renewal soon. DBS must provide back-up funding for it if third-party investors do not want to take up a new tranche. This is possible as the sub-prime crisis has made investors very risk-averse. In this case, DBS' direct CDO exposure becomes $2.4 billion, noted CLSA.

'We are comfortable with our exposure to this' commercial paper, a DBS spokesman said. She confirmed the figures cited in CLSA's report, but clarified that the $1.1 billion of CDOs in Red Orchid had been included in the US$1.7 billion figure that DBS cited earlier in reference to structured products involving CDOs.

United Overseas Bank (UOB) has an investment vehicle similar to Red Orchid - it is called Archer - but it is tied up in bonds, not CDOs.

The bank's CDO exposure amounts to $392 million, of which $91 million is asset-backed securities CDOs. Its shares dipped 10 cents to $20.60.

OCBC Bank has US$430 million invested in CDOs, of which US$181 million is invested in asset-backed securities. It does not have any investment instruments like Red Orchid. Its shares rose five cents to $8.65 yesterday.

Fitch Ratings said on Wednesday that Singapore's three local banks, which have been 'the most transparent in Asia' in disclosing their CDO holdings, have limited exposure to sub-prime mortgage CDOs. 'The overall CDO exposure of the Singapore banks, of around US$1.5 billion, could potentially give rise to losses that would dent annual earnings but would not materially weaken their capital.'

Nonetheless, the Monetary Authority of Singapore said yesterday it 'continues to monitor the development of the US sub-prime market and the financial institutions' exposure to this sector'.

It told The Straits Times that it urges the banks to 'factor the current environment into their regular stress testing and take appropriate action where necessary'.

Coping With Extreme Longevity Risk- CPF Retirement Scheme Just Needs A Tweak

Source : The Straits Times Forum Story, Aug 25, 2007

UNDER the Government's compulsory annuity scheme, a small portion of the CPF Minimum Sum of those below age 50 is to be set aside to be pooled together. And it will pay out $250 to $300 monthly once we hit age 85 and had exhausted our Minimum Sum, till the day we die.

The premium has still not been announced. But with this premium deducted from the $99,600 Minimum Sum, the monthly $790 payout from the CPF Retirement Account would be less. Yet, we can expect to receive only $300 from age 85. If one dies before age 85, the premium will be used to support others in the pool unless we pay a higher premium.

Currently, if we had the Minimum Sum of $99,600 at age 55, we could withdraw $790 per month over 20 years, from age 62 to 82. The starting age for the payout will be raised gradually to 65. So, let's put the withdrawal years at age 65 to 85.

If we bought a safe lifetime annuity, it would pay us a monthly income of $559 (the range is from $505 to $559, based on a Lianhe Wanbao report) till we die.

For both CPF and annuity, if one dies before the $99,600 has been paid out, CPF rules require that the balance be returned to the beneficiaries.

Assuming I opted to receive payouts from my CPF Retirement Account, and save the monthly difference of $231 ($790-$559) in a bank.

At age 85, I would have saved $55,440. Without adding bank interest and with a drawdown of $559 monthly, this amount could last me for another 8.3 years, i.e., till age 93.

If that amount could be put back into the CPF Retirement Account to earn interest, I believe it would last me till at least age 95.

Similarly, if the drawdown is only $300 monthly, $55,440 would last me 15.4 years, i.e., till age 100.

If my understanding and computation are correct, what benefit is there in buying a bank annuity? Of course, those who live beyond age 95 will benefit, but how many of us are likely to do so?

The current CPF retirement scheme is already good. However, it can be improved by reducing the $790 monthly payout to $550 so that the 20-year payout period will be extended to maybe 30 years. The most important point is this: Should one die before age 85, the balance would be returned to the beneficiaries.

Tan Yeong Heng

Ensuring Singapore Is Not A City In A Carpark

Source : The Straits Times, Aug 25, 2007

In a speech he made when visiting the operations control centre of the Kallang-Paya Lebar Expressway on Tuesday, Transport Minister Raymond Lim explained why electronic road pricing (ERP) is a necessary and effective tool for reducing road congestion.

WHY ERP?: Of all the different measures to deal with congestion, ERP is the only one that deals directly with the problem by requiring individuals to take into account the costs of congestion caused by their driving to others. -- ST FILE PHOTO: CHEW SENG KIM

THE KPE and the many other roads and expressways the Government has invested in over the years are part of our continuing efforts to build a first- class road network for Singaporeans. The KPE will complement the CTE and the BKE in providing rapid north-south travel, and will add to the extensive network of expressways linking every part of Singapore.

We have also continually upgraded and expanded our roads. For example, we recently upgraded Telok Blangah Road and Pasir Panjang Road into a semi-expressway, added an additional lane to the northbound CTE and the ECP and upgraded the AYE and Keppel Road Interchange.

In the last 10 years, we spent some $3.4 billion on roads, and we will continue to invest more in the future. Recently, I announced that we will be building a new expressway, the Marina Coastal Expressway (MCE), the 10th in Singapore, costing $2.5 billion. The 5km-long MCE will provide an additional high-speed access to the Marina Bay area.

While we will continue to build new roads and expressways, the constraints that we face in land-scarce Singapore will become more acute. Already, some 12 per cent of our land is taken up by roads, comparable to that used for housing and industry. Our limited land resources have to be shared with other critical uses such as building homes for our people, industries to drive our economy and schools for our children.

With all these competing demands, future major roads will likely have to be built underground like the KPE. But underground roads cost a lot more to build and maintain. For example, the KPE and the SLE are both 12km long. But the KPE, which is largely underground, costs $1.7 billion or over 10 times more than the SLE to build. The operating and maintenance cost of the KPE is 30 times more than that of a surface road. With scarcity of land and road building costs going up, LTA expects road growth to trend down from 1 per cent a year in the last 15 years to about half that rate over the next 10 to 15 years.

Continual investment in public transport infrastructure

THUS, we must ensure that our limited road space is well utilised. To do this, we need a holistic package of measures that include not just a good road network but also integrated land use and transport planning, a good public transport system and measures to limit the number and use of cars on our roads.

Developing a good public transport system is a top priority as it serves the vast majority of Singaporeans. That is why the Government has and will continue to invest heavily in our public transport infrastructure. The Government has already spent over $13 billion to build up our existing rail network of 138km. Another $20 billion has been committed to expand the density and coverage of the MRT by more than 50 per cent to 215km. Commuters can look forward to the completion of the Boon Lay Extension in 2009, the Circle Line from 2010 and, come 2013, start taking the Downtown Line to Marina Bay.

Each new rail line will add to the connectivity and attractiveness of our MRT network, shortening journey times and bringing commuting convenience to Singaporeans. For instance, a young couple living in Bukit Panjang visiting their parents in Bishan can take the DTL and transfer to the Circle Line at Botanic Gardens station. The trip would take 40 minutes, a saving of 15 minutes compared to the current available option of taking two buses, with a transfer at Dunearn Road. Similarly, this same couple, if they work in the new Marina Bay Financial Centre, will be able to take the DTL and get to work in 45 minutes, almost as fast as by car during the morning rush hour, maybe even faster than driving should there be traffic jams.

We are also investing in bus service improvements as our rail network can never reach all parts of Singapore and many commuters will still depend on buses for all or part of their journey.

One key initiative is to give buses greater priority on the roads, to reduce their travel time and improve their reliability. We extended the bus lane operating hours and expanded the full-day bus lane scheme to more roads in April this year.

The Public Transport Council has also tightened the Quality of Service (QoS) standards to increase the frequency of buses during the peak hours. In two years' time, bus operators must have at least 80 per cent of their bus services operating at 10-minute headways, down from the current 15 minutes. This should translate to shorter waiting times and less crowded buses for commuters during the peak hours.

To provide commuters with more choices, there will be more premium bus services that provide more comfortable journeys and faster travelling times. Since the PTC revised the premium bus service scheme earlier this year, some 20 such services have been launched. Residents in Ang Mo Kio, Clementi, Bedok, Simei, Jurong, Pasir Ris and Toa Payoh now have more choices to take the MRT, trunk buses or premium buses to the CBD in the morning.

We also aim to ensure a more seamless transfer between the rail and bus modes, and help bus passengers plan their journeys and manage their time better. LTA has started a trial to provide commuters with real-time bus arrival information, and installing Key Bus Services Maps at bus stops around Orchard Road.

But a good public transport system in itself will not ensure that our roads are free-flowing. There will always be people who choose to drive because of individual circumstances or personal preference. Without an effective traffic management system, our roads will still be congested.

For example, Tokyo has a first-class public transport system but the expressways are still very congested and it takes on average 2 hours to drive into the city during the morning peak hours.

Similarly, Seoul has a good public transport system but it suffers terrible traffic jams during the rush hours. Singapore must avoid this outcome.

If road usage is not priced, our roads will be overused, resulting in congestion. As you know from your own experience, when anything that is desirable and limited in supply is given free of charge, demand will exceed supply. If FA Cup final tickets were free, the number of people who want them will be greater than the seats available. If you do not control entry, there will be people who may well be crowding onto the pitch itself, ruining the event for everyone.

Similarly, many people want to use expressways such as the CTE during the peak periods, but roads have a fixed capacity. When the road is free, people will continue to use the road until traffic during peak hours slows to a crawl.

This is why, in addition to the various measures that we pursue, such as road building and a better public transport system, we also need ERP or congestion charging. Of all the different measures to deal with congestion, ERP is the only one that deals directly with the problem by requiring individuals to take into account the costs of congestion caused by their driving to others.

Many more cities are coming to the same conclusion after trying different approaches. I met Jay Walder, who used to be a managing director of transport for London last year. He told me that, 30 years ago, London and Singapore took different approaches to dealing with congestion in the city. While Singapore went for congestion charging by introducing the Area Licensing Scheme (ALS) in the central business district, London decided to build more roads such as the M25 ring road around the city. He said that the M25 did not resolve London's congestion problem. On the contrary, by encouraging people to drive more, it created more congestion and London ended up with a giant carpark for a ring road. London eventually decided to go the way of Singapore by introducing congestion charging in 2003. They started with £5 (S$15) and later raised it to £8 (S$24) per day per vehicle - much higher than our ERP charges. Congestion in central London dropped by some 30 per cent. London's experience shows that even though it seems that the obvious solution to traffic congestion is to simply increase road capacity, this is not a sustainable solution as traffic will expand to fill up the additional road space.

Other European cities are closely studying Singapore and London's example. Stockholm has just introduced congestion charging after a successful trial last year. In the United States, New York Mayor Michael Bloomberg is proposing a US$8 (S$12) toll to deal with congestion in New York City.

Our ERP system has been effective in keeping our roads and expressways smooth-flowing, above 45kmh for expressways and above 20kmh on arterial roads. ERP helps to manage congestion by encouraging motorists to change their period of travel, mode of travel or use a different route. Had it not been for ERP, we would be facing traffic gridlock on numerous roads.

Take the case of the ECP. Before ERP was introduced in 1998, the travel speed was as low as 36kmh between 8.30am and 9am. Today, the average speed is above 55kmh during that half hour. Similarly for Orchard Road, average travel speeds on weekday evenings and on Saturday afternoons have improved from about 17kmh to 23kmh since ERP was implemented in October 2005.

Furthermore, with the introduction of ERP in 1998, the Government has been able to rely more on car usage charges and less on car ownership taxes to manage traffic demand. Vehicle ownership taxes have been reduced and, as a result, annual vehicle ownership revenue fell from $3.4 billion in 1997 to $1.7 billion in 2006 compared to about $90 million in annual ERP revenue collected during that period. ERP has thus proven to be a more effective approach to managing traffic demand, and it costs motorists much less overall. Indeed, ERP is meant to be a congestion and not a revenue measure, so if motorists drive less and the roads are smooth-flowing, the Government will be happy to collect less. In effect, ERP rates can be adjusted down, as much as up, depending on the traffic speed on the roads.

With the use of ERP to manage traffic, this has also made it possible for more Singaporeans to own cars. Our vehicle population has grown from 680,000 in 1998 to 800,000 in 2006. However, to accommodate more vehicles on our roads, we have had to expand the ERP system from time to time. ERP started in 1998 on the ECP, CTE, PIE and around the CBD. It was then expanded to the AYE, and the arterial roads to relieve congestion at the Outer Cordon in 1999. It was subsequently extended to Dunearn Road in 2002 and, more recently in 2005, to the northbound CTE in the evening and to Orchard Road on Saturdays.

To keep ERP effective, we need to continually adjust our ERP coverage. The traffic situation is always dynamic; changes in income levels, vehicle population and drivers' travel patterns all affect traffic demand.

In this regard, over the last two years, traffic levels have been gradually but noticeably building up. More roads are congested, especially during peak hours, including in the evenings. The LTA has reviewed the situation, and decided to build a few more ERP gantries and extend the ERP hours on the CTE. LTA will be announcing the details of its review later. Overall, these changes will help to improve traffic conditions on our roads.

Now, we sometimes hear criticisms of the ERP system. Some have observed that introducing or raising ERP charges relieve congestion temporarily but, after a while, the congestion comes back. Others, especially those using the CTE, have complained that the ERP is unfair. They say that depending on where you join the expressway, some motorists add to the congestion without paying for it. This is feedback that we value. It shows that ERP coverage may need to be more extensive or pricing better fine-tuned. This is why we need to review the coverage of ERP on our roads regularly.

In the longer term, LTA is looking at how to upgrade ERP technology to put in place a more effective system of congestion charging. One possibility is to use GPS technology. We are working on this, but it is probably still a few years away as the technology is not quite ready.

Looking ahead, we can expect traffic on our roads to get heavier, particularly the roads leading into and out of the city. Today, ERP is introduced principally on a point-by-point basis. LTA is studying how we can deal with peak-hour congestion more holistically and effectively, taking into account overall traffic conditions, for example in the CBD. LTA is also reviewing the optimal speed ranges on our roads and the response of motorists to the present structure of our congestion charges.

Our vehicle growth rate will also have to be reviewed. We must remember that the current 3 per cent growth rate cap is on an ever-increasing base. In 1990, when the 3 per cent cap was introduced, it amounted to 16,000 additional vehicles a year. Today 3 per cent amounts to 24,000 additional vehicles every year. Against this is the fact that road growth was only 1 per cent per year in the last 15 years, going down to about 0.5 per cent over the next 15 years.

As long as we want more cars on the roads, ERP coverage will invariably get more extensive and charges higher over time. This is a key trade- off that we have to make if we want both car growth and smooth flowing roads. The Government is thus looking at what the appropriate balance should be in the future, between vehicle growth rates, usage charges and ownership taxes.

These measures will be part of the current comprehensive review of our land transport policies. We will need to make significant changes in order to keep our roads free-flowing, our trains and buses efficient and convenient and our city liveable and both people- and business-friendly. We are studying these measures carefully and will announce them early next year after the completion of the review.

Our aim is to have a sustainable transport system that supports continued population and economic growth and the higher expectations that come with being a First World city.

Building a better public transport system is a critical part of this. Refining the ERP system in tandem with other measures such as road-building and controlling vehicle population growth is equally important. Together, these measures ensure that we have a quality urban living environment - a city in a garden and not, as in many cities of the world, a city in a carpark.


These measures ensure that we have a quality urban living environment - a city in a garden and not, as in many cities of the world, a city in a carpark.

Annual Bonus For Each Year You Wait

Source : The Straits Times, Aug 24, 2007

Bonus amounts to be revealed later. Move will further increase retirement sums, says Eng Hen

OLDER workers who delay drawing down the Minimum Sum in their CPF account will get a bonus - for each year of deferment.
Manpower Minister Ng Eng Hen yesterday announced the move to give them the bonus every year at the opening of the annual Central Provident Fund roadshow.

This annual bonus will apply to those affected by the later draw-down, as well as those who voluntarily defer on their draw-down.

Prime Minister Lee Hsien Loong announced in his National Day Rally speech on Sunday that the draw-down age for the Minimum Sum will be postponed from 62 to 63 in 2012. It will then be gradually raised to 65 by 2018.

To sweeten the wait, those affected - people aged between 53 and 57 - are supposed to get a 'D-bonus', a one-off Deferment Bonus interest, paid into their CPF Retirement Account.

A smaller 'V-bonus', or Voluntary Deferment Bonus, will be given to those aged 58 and older who are unaffected by the changes, but voluntarily delay drawing down their Minimum Sum.

The Minimum Sum is the amount people must keep in their Retirement Accounts after withdrawing their CPF at age 55. The current Minimum Sum required is $99,600.

Before the change announced on Sunday, people got a monthly payout from the Minimum Sum at age 62.

Said Dr Ng yesterday of the yearly bonus: 'This will further increase retirement sums and, for most workers, this will translate to many more years of income support after they retire.'

He told reporters that the bonus amount will revealed later. He added that those with the Vbonus can choose to defer their draw-down until they turn 65.

While more details will be announced in his ministerial statement in Parliament next month, Dr Ng reassured Singaporeans that the changes will be made progressively to allow them time to adjust.

And amid the changes, he challenged the CPF Board to make it easier for all members to plan their retirement.

Besides launching a new retirement-planning online portal called Retirement Ready @ my cpf, he asked for more measures to educate the public that would involve just 'a few simple steps'.

More resources will be pumped into this, he pledged, and cartoons will soon be publicised to better explain the recent changes.

Annuities Are One, But Not Only, Solution

Source : Weekend TODAY, August 25, 2007

ITS history can be traced to the United States in 1740, when the Presbyterian Church gave regular payouts to provide for the needs of the clergy and widows till the day they died.

Now, annuities are set to be a permanent feature of Singaporeans’ lives, as the Government looks to make it compulsory for the nation’s rapidly ageing population.

Earlier this week, Manpower Minister Dr Ng Eng Hen said the scheme would call for a small portion of the Minimum Sum in the Central Provident Fund (CPF) to be used as premium for an annuity.

This would supplement the current Minimum Sum payout — which typically lasts for 20 years till age 82 — by providing members with a subsistence sum of about $250 to $300 by present-day standards, said Dr Ng.

Experts, however, feel an annuity alone is not the sole solution to retirement needs.

What is an annuity?

A contract to provide the annuity-holder with a tax-exempt guaranteed income for life or for a specified period of time after a person retires, which is currently at age 62 for Singaporeans.

Currently, CPF members can buy a life annuity from any of eight insurers (AIA, Aviva, Great Eastern Life, HSBC Insurance, NTUC Income, OAC, Prudential, TM Asia Life), or from the three local banks (DBS Bank, United Overseas Bank, OCBC Bank) with their statutory Minimum Sum when they reach 55.

But last year, only 4 per cent of those who turned 55 did so, said the Life Insurance Association.

NTUC Income said most people who deposit the full Minimum Sum prefer to receive a flat $790 every month from the CPF Board over 20 years.

“They think that they might not live till age 82, but statistics show that more people in Singapore are living up to 85 and beyond as life expectancy keeps improving,” said a spokesman from NTUC Income.

To plug this gap, financial consultants generally recommend an annuity that would pay out for life. But the longer payout period comes with a lower monthly payout sum.

“For the current CPF minimum sum of $99,600, Great Eastern provides a guaranteed sum of $535.35 per month from age 62 onwards if you are a male, and $494.26 if you are a female,” said Mr Tan Hak Leh, managing director (Singapore) of Great Eastern. “However, for most individuals, this guaranteed sum might not be enough.”

NTUC Income said it was exploring “more innovative forms of annuities”, which would allow regular contributions from an early age.

Presently, the insurer has an annuity option for its existing regular premium whole-life plans, where policyholders can convert their existing cash value to an annuity upon reaching the age of 60.

“An annuity kicks in to provide a stream of income during the actual retirement years, but the question is how much lumpsum money one has at that point for an immediate annuity, or at a point of five, seven or ten years before that to buy a deferred annuity?” said Mr Mark O’Dell, president of the Life Insurance Association.

“Ideally, one can say that the “accumulation stage” should begin as you start working. Start small but long-term interest rates compounded over 20, 30 or 40 years can go a long way to grow the money
you earmark for retirement.”

Mr Stephen Chew, principal consultant with Summit Planners Advisory Group, agreed an annuity is the best form of insurance to cater for retirement due to the guaranteed income.

But “returns from annuities are usually not as attractive when compared to other forms of retirement funds, for example endowment funds, which do not have a guaranteed feature but offer higher returns in the long run,” he added.

Industry experts, therefore, advise individuals to consult their personal financial advisers and to adopt a holistic approach when setting up a retirement fund by using a combination of financial instruments.

This includes the CPF minimum sum, cash savings, insurance policies and reverse mortgage or downgrading one’s property to monetise capital gains.

“It is difficult to pin down a percentage of each portion to cater for retirement,” said Mr Chew.

“The amount payable from CPF is quite constant. As for the rest, it depends on many factors such as type of employment, profession, family structure, cash flow and desired retirement needs.”

SGX Checks DBS’ CDO Exposure

Source : Weekend TODAY, August 25, 2007

The failure to provide full and complete disclosure has raised a black mark ...— CLSA, in a research note

THE Singapore Exchange (SGX) is looking into DBS Group Holdings’ previously-underreported exposure to collateralised debt obligations (CDO), which repackage bonds, loans and credit-default swaps and use the income to pay investors.

The bank has $2.4 billion worth of exposure to CDOs, which is more than the $1.3 billion exposure it had initially disclosed on Aug 7 in the wake of the United States sub-prime mortgage meltdown.

This came to light on Aug 22 in a research note by brokerage firm, CLSA, followed by DBS’ confirmation of the figures to the media.

“As a matter of principle, we will look into anything particularly unusual. We will look into anything not consistent with disclosure regulations,” a senior exchange official told Dow Jones Newswires.

CLSA said in its note that DBS can “certainly bear the additional CDO exposure”.

But it added: “The bank’s failure to provide full and complete disclosure has raised a black mark against management transparency and corporate governance.”

The CLSA note said DBS might have more CDO exposure through a special purpose vehicle or conduit.

Shares of DBS fell after confirmation of the additional CDO exposure, closing at $20.30, down 1.5 per cent. The wider Singapore market ended down just 0.04 per cent.

DBS has said previously that it sold $2.6 billion in structured products involving
CDOs to institutional, private banking and retail investors.

In its note, CLSA said that of the $2.6 billion, “$1.1 billion is parked in a DBS conduit”.

To fund these CDOs, the conduit sells commercial paper that is renewable every three months to third parties.

CLSA said that in the event the paper is not renewed, “DBS is obligated to provide liquidity and as a result brings these onto their books.” The note added: “We believe this is a more than likely possibility, given the current market for CDOs.”

When contacted, a DBS spokesman said none of its CDO exposure, including the additional CDOs reported Friday, is linked to US sub-prime mortgages.

“We are comfortable with our exposure to the conduit,” she said, declining to comment further.

Singapore’s two other banks — OCBC and United Overseas Bank — do not have vehicles similar to DBS’, representatives told Dow Jones Newswires. — DOW JONES

Same Old Traffic-Stopping Story

Source : Weekend TODAY, August 25, 2007

SHOULD we be worried when we consult a doctor for a persistent cough and he keeps prescribing more of the same medicine?

If the medicine is not helping the cough, a wise doctor would probe further to find out what other factors might be causing the cough and prescribe a different treatment.

Following the same logic, has the Land Transport Authority (LTA) ever wondered why despite putting up more and more Electronic Road Pricing (ERP) gantries, the traffic congestion never seems to ease?

We now have 62 gantries on our small island, and you bet Singaporeans know better than to stop counting.

Whenever a gantry goes up, motorists using that particular stretch of road are likely to find an alternative route to their destination. And this leads to congestion elsewhere, on these alternative roads.

I know of many motorists who can’t stay on these alternatives — and usually longer travelling routes — for long, and they almost always end up inserting their cashcards reluctantly and using the same old roads again.

And so, the same old story repeats itself — the traffic piles up again, motorists continue paying for the use of equally congested roads while the ERP coffers continue to fill up.

Apart from being a fixture of any bustling city in a developed, affluent country, traffic congestion on our roads can be attributed to many other factors: Poor road design and a lack of foresight in constructing more roads to meet rising usage, overly easy credit for car ownership, poor public transport design coupled with unreliable travelling times and of course, citizens who simply can’t do without cars.

All are problems that have to be tackled with different approaches. The ERP cannot be a fix-all solution.

Each time the LTA announces hikes in ERP rates or more gantries, members of the public have called for more concrete statistics and studies to be presented to show that the ERP is indeed the right panacea for the persistent traffic problems.

However, such calls seem to have fallen on deaf ears.

Property Prices Among Issues Tabled for Parliament

Source : Weekend TODAY, August 25, 2007

CONCERNS over whether the Singapore economy is at risk of overheating, and if recent spikes in prices and property rentals are impacting its competitiveness, dominate the list of issues to be debated in Parliament on Monday.

Four Members of Parliament (MPs) have tabled questions on these issues, with Madam Halimah Yacob, for example, asking what the Government intends to do to ensure the overall cost of doing business stays competitive.

Also on the agenda are questions about recycling efforts and the recent Asean Regional Forum. Nominated MP Thio Li-Ann has asked what the proposed setting up of an Asean human rights commission would mean for Singapore laws and foreign policy.

Several Bills are scheduled to be introduced, including proposed amendments to the Land Titles (Strata) Act and two new pieces of legislation – the Inquiries Bill and the Pharmacists Registration Bill.

Coming up for a second reading and debate are four bills, including one on accounting standards. Also tabled is a notice of motion calling for Parliament to authorise the Finance Minster to borrow — by the issue of Treasury Bills — a further $30 billion, for a total not exceeding $60 billion.

Higher Grants For More Low-Income Families

Source : Weekend TODAY, August 25, 2007

THE Housing and Development Board (HDB) has announced details of the enhanced Additional CPF Housing Grant (AHG) Scheme that would give lower-income families a bigger subsidy for their first HDB flat purchase.

The income ceiling for the AHG has been raised from $3,000 to $4,000. The maximum grant has gone up from $20,000 to $30,000 for those whose average monthly household income was $1,500 or less over the last two years.

The changes apply to those who book their flats, or whose resale application was received by the HDB, on or after Friday.

The enhanced scheme is expected to benefit an additional 1,300 first-timer households annually, bringing the total number to an estimated 4,000 per year.

The enhanced AHG scheme was first announced by Prime Minister Lee Hsien Loong in his National Day Rally speech last Sunday. Mr Lee had said home ownership was the “best form of social welfare for citizens because it gives every Singaporean a stake in Singapore’s success”.

The AHG scheme was introduced on March 3 last year.

Since then, it has provided lowerincome families with an additional housing subsidy of between $5,000 and $20,000 to buy their first HDB flat. As of July 31 this year, about 3,300 lower-income families have benefited.

To qualify, at least one of the flat buyers must have worked continuously for at least two years when applying to buy the flat. Upon the sale of the flat, the AHG will be reinstated to the recipient’s CPF account.

For enquiries, call the HDB’s sales/resale customer service line: 1800-8663 066, the Sers enquiry line: 1800-8663 070 or the branch office service line: 1800-2255 432.

Win, Not Lose, When You Draw Later....

Source : Weekend TODAY, August 25, 2007

WHAT YOU WILL GET If you defer the draw-down age by ...ONE YEAR
Earn two years’ payout

Earn seven years’ payout

MOST will have no choice come 2012—but for older workers who will be spared the deferred draw-down age on their Central Provident Fund (CPF) minimum sum, an even bigger carrot is being dangled to get them to voluntarily receive their money later.

A bonus will be given to them for every year they voluntarily delay withdrawing their minimum sum.

The exact amount of the voluntary bonus, or V Bonus, will be announced at a later date, said Manpower Minister Dr Ng Eng Hen on Friday.

From 2012, the drawdown age — currently 62 — will be pushed back in increments to 65 by 2018.

All those currently in their 50s, who will be the first affected, will get a one-off “deferment” bonus in their retirement account, it was earlier announced. But those aged 58 years and above who will not be affected by the new rules, can also choose to defer their withdrawals.

Dr Ng explained how the sums work in favour of those who voluntarily push back their draw-down age.

“We want to encourage older workers to continue working if they can. And if they draw down later, it will add many more years to their payout,” he said.

If a person defers his draw-down age by a year, he stands to get the equivalent of two years’ worth of payouts because the entire minimum sum collects interest for another 12 months.

Defer for three years, and the returns are even greater — seven years’ worth of payouts.

“That’s a good multiplier and you really stretch out your retirement savings,” said Dr Ng, who was speaking to reporters after launching the Retirement Ready @ My CPF roadshow at Marina Square.

This new portal ( is the first such resource available on the Internet to help Singaporeans do their retirement planning sums.

Turning to compulsory annuities, or “longevity insurance”, Dr Ng said he would study all feedback before he delivers his ministerial statement in Parliament next month.

On Friday, labour chief Lim Swee Say noted how unionists had suggested keeping the compulsory annuity payment to “as small a part of the minimum sum as possible”. Among the many suggestions Mr Lim discussed, at a separate press conference on the various National Day Rally initiatives, was one to stretch the minimum sum withdrawal period from 20 to 25 years.

Dr Ng said the priority now was to bring in industry experts to come up with the most suitable process.

“We’ve gotten many creative suggestions. But we must have a simple and effective way of doing this. There can’t be a situation where we have 100 ways and we tell people to please choose one,” he said.

Dr Ng said the CPF Board was looking into providing new online calculators on the CPF and Ministry of Manpower websites, to help members gauge how much interest they will receive under the new CPF interest rate structure.

From Jan 1 next year, all members will get an additional 1-percentage point in interest for the first $60,000 in their various CPF accounts.

GuocoLand Full-Year Profit Up 81%

Source : The Business Times, August 25, 2007

Revenue jumps 94% to $702.5m; Q4 earnings more than triple to $194.7m

QUEK Leng Chan's Singapore-listed GuocoLand yesterday posted fourth-quarter net profit of $194.7 million, more than triple the $53.7 million in the same year-ago period, boosting full-year net earnings to $281.9 million, up 81 per cent from the preceding year.

By the year-end, GuocoLand is preparing to launch at least three projects, including a luxury condo on the site of Casa Rosita

GuocoLand attributed the improved bottom line for the year ended June 30, 2007 partly to higher profits recognised from residential development projects in Singapore and from the sale of residential apartments in West End Point in Beijing.

In addition, GuocoLand's other income increased 33 per cent to $194.7 million; the figure includes revaluation gain of $116.5 million on investment properties in Singapore (mainly from Tung Centre) and a $19.3 million gain from the sale of the group's long-term investment in BIL International Ltd.

Revenue for the fourth quarter ended June 30, 2007 jumped to $361 million from $59.6 million in the same year-ago period, while full-year revenue jumped 94 per cent to $702.5 million.

The full-year increase was due primarily to a nearly 90 per cent jump in revenue from property development to $652.8 million.

By end-December 2007, GuocoLand is preparing to launch at least three projects - a freehold luxury condo named Goodwood Residence on the Casa Rosita site in Bukit Timah, Phase 1 of the residential component of a Ho Chi Minh City p``roject, and the maiden phase of Ascot Park, a 1,112-unit condo in Nanjing.

The group's China land bank currently stands at about two million square metres gross floor area, while its Singapore land bank is about 236,000 sq m saleable area.

Full-year earnings per share rose from 24.43 cents to 46.15 cents.

Net asset value per share stood at $2.30 as at June 30, 2007, up from $1.83 a year earlier. Ordinary shareholders will receive an 8-cent per share first and final dividend, just like in the preceding year.

Boulevard Vue @ Cuscaden Walk

Boulevard Vue. Located off Orchard Boulevard. It is just a stone’s throw away from the world renowned shopping paradise and the bustling night life of Singapore.

Imagine living in a bungalow in the sky. That’s what you will experience as a resident of this prestigious project. Only 28 exclusive units are housed within this 144m tall tower.

Offering only 26 typical units of 4500sqft and 2 penthouses of 7227sqft and 9930sqft. Only one unit occupies the entire floor, thus you can enjoy total privacy to the fullest. Every unit has 2 private lifts, allowing you to reach the comfort of your home in double quick time.

No details are spared to give you the luxury of space and a touch of class. Every apartment has a full-glass facade, offering panoramic views of Orchard Road and the Business district. Two large balconies provides ample space for outdoor furniture, jacuzzi and BBQ equipments.

Flustered about where to park your Ferraris, Lamborghinis or Bentley convertibles? You don’t have to worry now as you are entitled to a 3-lot personal garage at the project’s basement carpark.

24-hour Concierge service is also avail in this project, so you don’t have to worry about getting airline tickets for your last min trip or making reservations at a popular 5-stars restaurant. If poolside parties are your forte, Boulevard Vue offers chef-on-demand to cook delicious food for the occasion at the Gourmet outdoor kitchen. Your guests can enjoy alfresco dining experience in the moonlit ambience.

Location: Cuscaden Walk (District 9)
Map Source :

-Prestigious Address along Boulevard Road
-Unique ‘Bungalows in the sky’
-Units only available from level 7 onwards
-24 Hours concierge services
-Drop-off point at first level & basement 1 for residents’ convenience
-Large Balconies as sky gardens
-Outdoor gourmet kitchen cum entertainment area
-Lush tropical landscape

Tenure : Freehold
Expected TOP : 2011
Site Area : 44,732sqft
Total Units : 28 in One 33 Storey Tower
Total Carpark Lots : 138

Est. Price : $4500psf onwards from 4th floor

Unit Types:
4 bedrooms ~ 3,758 sqft
Lower Penthouse ~ 5,480 sqft
Upper Penthouse ~ 5,433 sqft

-Pool Deck
-25sqm Infinity Lap Pool
-Spa Pool
-Sun Deck
-Children’s Play Area / Lawn

Banks Get Flexible With Property Needs

Source : Weekend TODAY, 25 Aug 2007

The short supply of available office space in the central business district is driving financial institutions to be more flexible when planning their real estate needs.

“Currently, banking and finance tenants occupy 36 per cent of all Grade A stock in Singapore, or close to 500,000 sq m,” said Justin Kean, associate director of Asia Pacific occupier research at consultancy Jones Lang LaSalle (JLL).

“This figure has increased by approximately half since the beginning of 2006.”

Added Mr Kean: “This implies that much of the recent rental movements in this market can be attributed to the banking and finance sector.”

A JLL white paper on real estate trends in the banking and finance sector showed financial institutions are exploring ways to create a better work environment, besides just looking at physical locations for expansion.

Advancements in data storage and communication technology have enabled the separation of front and back-end operations. The latter are then moved to cheaper locations.

To optimise office space, some banks here are considering the possibility of hot-desking, or allowing staff to work off-site or from home.

Such arrangements, together with the adoption of flexible work hours, would give the banks the flexibility to absorb minor shocks in the market, which might result in the reduction of staff numbers, without downsizing their real-estate portfolio.

JLL said, in line with the rise in corporate social responsibility within the sector, more real estate managers are making it an important part of their portfolio management strategy, including selecting eco-friendly buildings.

Don’t Limit Flat Buy-Back To ‘One Bite Of Cherry’

Source : The Straits Times, 25 Aug 2007

I AM glad that the Government will introduce a scheme to buy back two- and three-room flats of older HDB owners and allow them to live in the same flat for another 30 years.

However, it was stated by the Prime Minister in his National Day Rally speech that the scheme would apply only to those people aged 62 and above, and who have had only ‘one bite of the cherry'’, i.e., who had bought only one flat from HDB.

This last criterion is too stringent and I hope the Government will consider relaxing it.

My family of three has lived in an HDB flat since its inception, moving from rental flat to home-ownership.

We sold our flats twice and bought our present flat in the open market as we were not eligible for a new flat, having used up the two chances as set by HDB.

Downgrading to a smaller flat was mainly due to family commitments beyond our control. I was the only breadwinner at that time, supporting my family and parents.

I am now 67 years old and my wife is 64, and we live in a two-room flat. I have been jobless since my retirement, while my wife works part-time, getting a small allowance which goes towards paying the public-utility bills and household expenses. I would be very worried if she stops her part-time job.

In view of our circumstances, I hope that the Government will relax the rule to allow people like me who had two bites of the cherry and are now living in a two-room flat to shorten their flat’s lease to 30 years and buy back the remaining lease so that we will not face financial difficulties, necessitating us seeking public assistance as we age.

Benson Quek Hock Teng