Archive for the ‘Tan Chuan Jin says’ Category

Being Retirement Ready. Another change from 1 July – adjusting the Minimum Sum. Tan Chuan Jin says

Countries around the world are struggling with the impact of increasing life expectancy. In the recent meeting with my ASEAN +3 counterparts in Phnom Penh, I chatted with some on this topic. Japan for example, was facing a serious challenge as to how best to fund it. European countries are burdened by their crippling pensions. Who and how to fund it?

It is no different for us as we strive to ensure that we update our CPF system to keep it relevant. CPF Life is the one majorstep forward taken at Budget 2012. Keeping the ERC’s earlier recommendations on Minimum Sum on track remains part of this process.

Individuals must continue to also do their own planning and cater for their provisions as best as they can.


Some of my elderly residents come to see me about their retirement needs. There is a wide range of circumstances. Some enquire about their CPF withdrawals while some are worried about not having enough savings to tide things over. What is quite clear, is that while everyone needs to plan for his or her own retirement needs, the state needs to ensure that via the CPF, we can provide a basic level of adequacy for most, especially for our lower income Singaporeans.

This is where the CPF Minimum Sum (or MS) comes in. Every year, when we announce that the MS is being adjusted upwards, there is usually an outcry. I guess it would be the same again this year! Let me try to again explain how the MS works and why the increase takes place.

The MS exists to help Singaporeans set aside enough to meet a basic level of needs in retirement. When CPF members retire, they will receive a monthly payout from this sum of money they have set aside, to support their expenditure then. To achieve this objective, the MS needs to be adjusted to account for inflation and also members’ growing expectations of their quality of life during retirement.

In 2003, the Economic Review Committee (ERC) had recommended that the MS needs to grow in real terms to reach $120,000 (in 2003 dollars) by 2013, so that it is enough to provide for basic retirement needs.    While this target remains unchanged, the nominal amount will have to be adjusted upwards by inflation to ensure that it maintains its real value – so it should be worth as much in today’s dollars as what $120,000 was worth back in 2003.

We have now shifted this target back by two years to 2015 and will spread out the remaining MS increases needed to reach this target, over the coming 4 years.  We made the decision to do so to avoid too large an increase in MS in any one year.

Some of you ask why we continue to raise the MS, despite the fact that only about half of members at age 55 are able to meet it.This is a very valid and common question. For those who can meet the MS, the amount is meant to provide him with monthly payouts that will provide for a member’s basic needs in retirement. If we do not increase the MS in line with inflation, we may not ensure Singaporeans are financially provided for in their retirement years. Of course, I am aware that for a number of Singaporeans, they also do have other sources of savings and support, but we aim for the CPF system to provide a baseline adequacy.

We aim to boost members’ CPF savings to help them meet the MS in several ways.  For instance,

  • we pay an extra 1% interest on members’ CPF balances of up to $60,000.
  • We help low-income members build up their retirement nest through the Workfare Income Supplement (WIS) scheme.
  • We help older Singaporeans stay employed through re-employment initiatives and the Special Employment Credit.
  • We are also working on raising wages for low income workers.
  • Staying employed is, in fact, the best way for members to build up their retirement savings.

For those who still fall short of their MS, they may still have their own savings or family to depend on. Depending on their circumstances, we will step in to assist where we can. Some of my residents fall under this category and we have arranged for various forms of assistance to augment their payouts.

When I examined our data, it is actually encouraging to note that despite the rising MS, the percentage of active CPF members meeting their MS at age 55 has improved over the years. In 2011, nearly 1 in 2 CPF members (45%) met their MS, compared to about 2 in 5 members in 2007 (36%). The RA balance at age 55 has consistently been rising as well.  This will continue to improve with each successive cohort, as educational profiles improve and lifetime incomes rise.

Among those starting work now, about 70 to 80 per cent should be able to attain the current level set for the Minimum Sum in cash (adjusted for inflation), by the time they retire, even after they have withdrawn money for a home.

We will continue to review MS regularly to ensure it is not excessive while providing an adequate stream of income during retirement for CPF members.

Minister of State Tan Chuan-Jin
Link : Being Retirement Ready  Another change from 1 July – adjusting the Minimum Sum – Tan Chuan Jin


Desperately Seeking Singaporean. Sim Ann says

If you are a Singaporean web developer/designer, well versed in PHP, with 2 to 3 years of commercial experience, my constituent Mr Tan is looking for you.

Mr Tan owns a successful local SME specialising in developing web 2.0 business applications for corporate clients. Business owners like him don’t often walk through the doors at my MPS, but tonight Mr Tan did.

Mr Tan’s company hires 6 locals (including himself), 2 foreigners on S-Pass and 1 foreigner on Employment Pass. His business is growing and he needs to hire two more persons.

One opening is for a Client Account Manager. No problem – of the 89 applications he received, about 80% are Singaporeans. He plans to hire a Singaporean for this role.

The other opening is giving him a headache. He needs a Web Developer/Designer, and he has hardly any Singaporean applicants.

He told me he advertised on 2 well-known online job portals. On one job portal, 43 people applied, amongst whom only 1 was a Singaporean. Unfortunately, the person’s qualification and experience did not match what Mr Tan’s company needed.

On the second job portal, out of 16 applicants thus far, all are foreigners.

He is pessimistic about the prospect of finding a local web developer.

“There are Singaporean job-seekers, but they all want to manage projects,” he told me. “I already have enough project managers. I need someone to actually do the work.”

Is he prepared to train? “My company is prepared to train and groom any local talent we can find,” he said. “We do so even though we know that once they are trained, many Singaporeans job-hop and move on to MNCs.”

This is why he came to seek my support for an appeal to MOM to allow him to hire one more foreign employee on S-Pass.

If the appeal is not successful, he said he may well consider relocating his company to another country in the region.

“Where?” I asked him. Turns out he has already thought it through – Vietnam, Myanmar or the Philippines. He even gave me a succinct analysis of the pros and cons of each.

Mr Tan understands all the arguments why controls on foreign manpower are being tightened. He is a born and bred Singaporean, and doesn’t want his company to move if he can help it. Being a born and bred Singaporean, neither do I. I am also mindful that if his company relocates, this may mean his 5 local employees will have to look for new jobs.

So, if you are a Singaporean web developer/designer, well versed in PHP, with 2 to 3 years of commercial experience, send me your particulars at and I will ask Mr Tan to contact you.

But not foreigners, please. He has more than enough applicants already.

Sim Ann 沈颖    by Sim Ann 沈颖
Link : Desperately Seeking Singaporean


This is a recurrent story amongst SMEs especially. Singaporeans SMEs who employ Singaporeans. Providing employment for Singaporeans to the tune of over 60%, it is important that our SMEs remain not only viable, but successful.

Having access to a diverse workforce remains important even as we slow down growth of the foreign workforce. Not easy striking a balance.

For larger regional and multi-national set ups, it is also similarly important as it is one of the reasons why the companies invest here and why our local companies stay put instead of relocating. By being here, they create local jobs and also secondary jobs in supporting businesses.

Therein lies the tension between having access to foreign labour and reigning in growth of foreign labour numbers.

   Tan Chuan-Jin

“I do not wish to disappoint my mother again.” ( Tan Chuan Jin )

There has been much talk about good schools and whether all schools can be good schools….

I recently attended Ping Yi Secondary School’s Annual Speech and Prize Giving Day. The school has an active Parents’ Support Group. I met a couple whose children left 11 years ago, but yet they are still serving. I met a lady who is in the interior design line; she was an old Ping Yi-an and was in the school in the late 1980s, yet she still comes back. The students actively help out in the community. Ping Yi believes in encouraging student participation in their various CCAs even for sports which the students may not be strong in.

I heard many stories while I was there. Here are two that I asked Shanti, the Principal, to send to me.

Champions defy gravity 

The banner carried by their friends read “Champions defy gravity”. This was the first ‘C’ finals the school had ever reached in 20 years. Many were new to the team and a number came from less privileged backgrounds and received financial assistance. There is much the students need to contend with. To be able to achieve this is a testimony to the spirit of the boys and the teachers-in-charged.

Noor Hidayat Affendi is 14. “Sepak Takraw helped me get the scholarship and, with it, I was able to buy my school uniforms and books. From now on I can be focused on my studies and fulfil my promise to my teacher to study harder.” 

“I do not wish to disappoint my mother again.”

These were the simple but powerful words of a young man who has vowed to change for the better after being given a second chance. It was not easy growing up in a single-parent family. Throughout the interview, Muhammad Radhi Bin Razali spoke of his mother and his teachers with a profound sense of gratitude, appreciation and indebtedness.

Radhi entered Ping Yi as a Secondary One student in 2008. Behavioural issues started to surface within the first term in school. He was hauled up for playing truant and his mother was alerted about it. Radhi frequently violated school rules. He showed signs of disengagement and his deteriorating results saw him repeat Secondary One in 2009. It became a constant struggle for his mother and his teachers to imbue in him the right values and getting him to do the right thing. Throughout this period of time, Radhi’s mother and teachers never gave up and continued to provide that much needed support and guidance. However, Radhi continued to perpetuate in his wayward behaviour and the law eventually caught up with him.

This episode left an indelible mark on Radhi’s life. Fortunately, it also marked the beginning of a turnaround student’s journey in his quest to find meaning in life and to realize the importance of having a good education.

“He has shown great improvements in his studies and is much more responsible when it comes to his family. I am positive that his future is bright and although he is taking it one step at a time, with the amazing support given by his teachers, I am sure that he will eventually reach his goals,”said his mother, gleaming with pride.

Radhi persevered with the help of all his teachers. He began displaying interest in his studies and he took responsibility for himself, requesting for consultation sessions with his teachers after school hours so that he could clarify his doubts in the subjects he was weak in. Radhi’s teachers saw potential in him and recognised his inclination towards hands-on activities and selected him to attend a 6-months electrical wiring workshop. Despite being reluctant in the first place due to the long course duration and inconvenient venue of the programme, Radhi was finally convinced by his teachers and finally agreed to give the programme a try. This, he cited, was one of the best decisions made in his life as he finally realised his interest towards the construction industry, particularly in the domain of electrical wiring.

Radhi emerged as the top student for the entire course and this experience taught him a valuable lesson about perseverance, focus and determination. Radhi continued to strive harder. At the recently held annual Speech and Prize Giving Day on 13 April 2012, the determined Secondary 4 Normal Technical student managed to clinch subject book prizes for both English Language and Elements in Business Skills. Radhi enthusiastically explained his structured post-secondary education plans. He is determined to pursue a NITEC course in the Institute of Technical Education (ITE) in Electrical Engineering. He hopes to be part of the building or construction industry in the future.

Radhi’s success is a testimony of his teachers’ perseverance and belief that there is something positive in every child. It is this belief that led to the unwavering support and guidance showered upon Radhi to help him find meaning in life and set his own goals. It is a testimony of a mother’s love. And also a testimony of Radhi’s sense of purpose.

“I will aim high as I have realized that I can achieve if I am determined.”


Is this a good school?

Well, this is a school that places the students at the heart of everything that they do.

This is a school where teachers and parents care enough.

Can any school be a good school?

Can any teacher be a good teacher?

To all of you in Ping Yi Secondary School…Thank you!

   Tan Chuan-Jin  , May 5, 2012

How Time Flies – Tan Chuan Jin

14 years ago, I remember dozing on a sofa in the early morning and I was shaken by a nurse, “it is time!”

I stumbled into the delivery room and was quite disoriented with all the machines and gadgets around, or so I seemed to recall. It was quick. There was no time for epidural for my wife. She huffed and puffed and before you know it, there she was. All pink and quiet before a cry emanated from her little frame…announcing her arrival in our world.

It was a special moment. She was our first born.

As I look at her pictures over the years, you wonder how all that time just flew by…and she is now a young lady in her teens. Or as my ten-year old son will always hiss, with his face all contorted, “TEENAGER!”, as if it was the most deadly disease in the world 🙂

As you flip through the episodes and stories in your mind, you invariably want to reach out and catch them and hold them tight. Even as you despair at some gaps, you swoon and smile knowingly at the many silly heart-warming moments that populate your stream of consciousness. Long may it remain there as fresh as the day it happened.

I have always been very taken by a poem I studied in school. Although I have come to realise that the reality turned out quite differently for Sally, it remains a meaningful piece about what we wish for in our children.

Happy Birthday to my little girl!

Born Yesterday

for Sally Amis

Tightly-folded bud,

I have wished you something

None of the others would:

Not the usual stuff

About being beautiful,

Or running off a spring

Of innocence and love –

They will all wish you that,

And should it prove possible,

Well, you’re a lucky girl.

But if it shouldn’t, then

May you be ordinary;

Have, like other women,

An average of talents:

Not ugly, not good-looking,

Nothing uncustomary

To pull you off your balance,

That, unworkable itself,

Stops all the rest from working.

In fact, may you be dull –

If that is what a skilled,

Vigilant, flexible,

Unemphasised, enthralled

Catching of happiness is called.

~ Philip Larkin

    How Time Flies

Providing a House…Building a Home – by Tan Chuan Jin

 A number of you have forwarded to me a blog post written by netizen “Gintai”. He shares about his conversation on housing issues with two colleagues, before moving on to talk about the perceived inequities between locals and PRs in Singapore. He also asserts that he is not proud to be a Singaporean.

I will address the issue of PRs in another note. Let me just talk about the housing situation in Singapore. Is it really so dire? Is the HDB flat really so out of reach?

For a start, we need to understand why the flat pricing system works the way it does. Gintai seems unhappy that similar sized flats are not priced the same. When determining the prices of flats offered, HDB factors in the costs of building the flat as well as the prevailing market conditions at the time of the offer and the individual attributes of the flats. Therefore, a flat on the 16th floor and one on the 2nd floor would be priced differently. The price of a similar-sized flat in Jurong West and in Queenstown would differ. A flat near key amenities would be valued more than one with less.

Is there really a difference in value? Many Singaporeans who have sold their flats know that these different values would surface immediately in terms of the price their different flats can command. Should we therefore price them all the same? If they were, everyone would just wait for a flat on the top floors in a matured estate. And some would make huge capital gains compared to others when they sell.

Gintai’s colleague, “Anak Abu”, lamented about his flat loan instalment payments. While I don’t know Abu’s full details, as a first time HDB buyer, Abu’s flat’s price would include subsidies and he would be eligible for the Additional CPF Housing Grant and possibly even the Special Housing Grant. These would reduce the subsidised selling price considerably. But even with the grant, it’s striking to note that on a stated income of around $1,850, Anak Abu chose to buy a four room flat (not a smaller one), at a Sale of Balance Flat exercise (and not a mainstream BTO flat), in a mature estate (as opposed to a non-nature estate), near the top floor (rather than lower down), and next to the town centre (and not further away). 

Tanglin Halt

This is a common scenario. At my Meet-the-People Session, my residents come to see me to appeal for a bigger flat at choice locations. I understand the desire to upgrade and to live well, but there is also a need to take a hard look at personal finances as well, and to make the right choices. It would seem that Anak Abu had over-stretched himself here. For him, there will be less to set aside for other needs. It’s a decision each family has to make.

In general, even as we allow the use of CPF funds to pay for the monthly instalment for a flat, the money in the Special Account and the Medisave Accounts is not touched. Criteria for Minimum Sum is also factored in to help ensure that some money is set aside for retirement. Retirement sufficiency would be determined by an individual’s future income stream and his outlay on his home.

Eventually, when Anak Abu moves on in years, and when his children are older, he would own his Bedok flat. If he needs to supplement his retirement needs, he could decide to rent, adjust his lease via the Lease Buy-Back Scheme or sell and move to a smaller studio flat. If Anak Abu had bought a more affordable flat, he would have had more for retirement. If he had chosen not to buy the flat at all, he would have rented and would have more money in his CPF; but he would have had more cash outlay over the years and he would not have owned his own home.

Gintai also shared about another colleague, “Zaidi Blond” who was eyeing a similar unit in the same Bedok block as Anak Abu, but was now facing a selling price that is supposedly $68,000 more than what it cost a year and a half ago. He asserts that Singaporeans would feel “cheated and bitter”.

Why the differential? There is a time difference of one and a half years. The value of the flat may have shifted. HDB needs to price the flats with reference to their prevailing market value. The same rationale, as explained earlier, applies. Due to differing economic circumstances, there have been instances where flat prices dropped. When that happened, the ones who were angry were those that had bought earlier. It is human nature for all of us to want to get the best deal with the least risks.

Subsidies and grants remain in place for Singaporeans in order to keep a range of different flat types affordable for Singaporeans at different income levels.

Do buy within your means.

I know that these are emotive issues. But HDB does indeed cater to the vast majority of Singaporeans, from those in rental flats, to those who are comfortably in the middle classes. 80% of Singaporeans live in HDB flats. 90% of them own their own flats.

Would there be affordable and available options out there for you? The answer is yes. Our commitment is to ensure that for first time buyers, you will find a range of different sized flats in non-matured estates available, with subsidies, priced affordably for your respective income levels.

We will help provide you a house so that you can create a home.

Example of 2012 Fernvale Lea (in Sengkang) I had used in an earlier note

2 Rm. Typical price about $100,000. Couple earns $1,000. AHG $40,000 + SHG $20,000. 25 year HDB loan will see their monthly repayments ($182/mth) fully covered by their CPF contributions (OA). No monthly cash outlay.

3 Rm. Typical price about $170,000. Couple earns $2,500. AHG= $30,000. Cost of flat = $140,000. 25 year HDB loan will see their monthly repayments fully covered by their CPF contributions (OA). No monthly cash outlay.

4 Rm. Typical price is $280,000. Couple earning $4,500. AHG=$10,000. Cost of flat=$270,000. 25 year will see their monthly repayments being covered mostly by their CPF contributions (OA). $60 monthly cash outlay.

5 Rm. Typical price $350,000. Couple earns $6,000. 25 year will see their monthly repayments being covered mostly by their CPF contributions (OA). $50 monthly cash outlay

On average thus far, most HDB loans taken from onset is about 22 or so years. As income rises, and people choose to repay earlier, period can come down.When I last shared this a few months ago, those aged 55 who have not discharged their HDB loans are about 12+%

Fernvale Lea in Sengkang

by Tan Chuan-Jin on Thursday, April 26, 2012
Link : Providing a House…Building a Home

Related Link : 

Earn $1000 a month and you want to buy a flat?!


Only in Singapore…

Tears were shed by some, who lamented about the ability to buy flats for their parents in the future. Others raised their eyebrows when DPM Tharman made the point about the $1,000 income family being able to afford to buy a small flat. Online critics went to town to mock the im-possibility of this.


For a first time applicant, he can apply for a new 2-room standard BTO (Build-to-Order) flat in a non-mature estate. These flats are set aside for those earning $2,000 and below a month.

These households earning $1,000 can qualify for generous housing grants. Available to them are the Additional CPF Housing Grant (AHG) of up to $40,000, and the Special CPF Housing Grant (SHG) of up to $20,000. These grants could be used for the flat down payment. Total = $60,000

How much is a flat? Using the selling price of a new 2-room BTO flat in Fernvale Lea in Sengkang as an example, it is $100,000 (offered in the Jan 12 BTO exercise; the price range was from $83,000 to $112,000)

Deduct the $60,000. The applicant needs to pay $40,000.

With a loan for $40,000, repayment per month is as shown below:

– 30 years loan : $161/mth

– 25 years loan : $182/mth

– 20 years loan : $214/mth

For a young household headed by an income earner with a salary of $1,000 per month. He will have a total of $217 contributed monthly to his CPF Ordinary Account.

Monthly cash outlay = $0

This support for families enable them to move from rental to owning their own homes.

If they prefer to rent, rentals for those with income of about $1,000 is $90-123 for 1-room, $123-$165 for 2-room.

4300 of these 2-rm BTO flats have been built since 2006. More in pipeline this year. Situation is manageable.

Demand for rentals still remain high and we are increasing the building of rental flats. By 2012 we would have about 50,000 and waiting time would come down from 21 to 8 months.

This note will not be talking about the range of efforts undertaken for low-income Singaporeans. It is meant to explain about one aspect of housing. We have other initiatives to help, amongst which are transfers, job provision etc. Many of these are existing measures and new ones which this Budget 2012 addresses.

But I will just mention Workfare. If he’s aged 35-44, together with Workfare Special Bonus, he’d get $1,313 per year. If aged 45-54, $1,750 per year.

Miscellaneous Info for those interested in some data:

– The Average Monthly Household Income from Work among Resident Employed Households for the 1st-10th percent is $1,581 for 2011.

– 1 to 2 roomers comprise 4.6% of distribution of resident households.

– In Govt transfers, they receive an average of $3,270 per household member.

– Across the board, average household size is 3.5 For 1-2 roomers, average household size was 2.2

Key Household Characteristics and Household Income Trends 2011

An Inclusive Society…making it happen

Hdb Infoweb

Special Housing Grant

Additional Housing Grant

Help for low income families

ComCare Helping the Needy

TYPICAL 2-ROOM FLOOR PLAN APPROX. FLOOR AREA 47 sqm (Inclusive of Internal Floor Area 45 sqm and Air-Con Ledge)


Link :


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