CPF Medisave Required Amount to be raised to $38,500

‘SINGAPORE: From January next year, the Medisave Required Amount (MRA) in the Central Provident Fund (CPF) will be raised to S$38,500 from the current S$32,000.

The MRA refers to the amount that must be set aside in the Medisave Account, after the CPF Minimum Sum requirement has been met.

The CPF Board said those who have met the CPF Minimum Sum and have an MRA shortfall at the point of withdrawal have to make a top-up to the Medisave Account....’

This is the latest. Does anyone want to ask the CPF Board who gives them the authority to raise the minimum sum? Who does the Board think they are?

SGX – The truth is out

It is reported, finally, in the ST that all is not well in the stock market. For a particular month, many remisiers were earning less than $1000 in commission. This is nothing better than the cleaners in the foodcourt. And in a normal month, many are raking less than $2000. What are the implications?

It is not simply a dying profession for the remisiers. The broking houses need the commission to pay its staff or they too will have to close shop. The green eye monster has done its job well to kill this industry that once was a roaring business and supporting many other businesses in one way or another. The drastic changes in turning a stock market into a casino drove the final nail into the coffin.

The volume of trading appears to be high but simply fictitious in a way, generated by computers for brokerages or trading houses, house trades that bear no commission. The real participation of traders, retail and institutions too is dwindling and drying up.

The state of health of the market is best seen by good stocks being delisted as their real values are higher than the stock values in the market. It thus does not make sense for good companies to waste their time and paying fees to be listed. And with so many penny stocks, 1c or less than 1c stocks in the main board, it simply says something is embarrassingly wrong.

Surely the people responsible for ensuring a healthy and viable stock market know what is going wrong and how to put it right. They are not paid in the millions for nothing. Once the stock market is crippled, with remisiers and supporting staff quitting the industry, with brokerages shrinking and folding up, the damage is very difficult to repair. There will be a loss of confidence and a fleeing of funds. The offices in the financial district could go empty and rentals will slide as well.

The job loss in the industry is insignificant to the demise of a stock market and the finance industry. Make no mistake about it. The numbers don’t lie. The market and the associated businesses are going kaput while millions are being paid and there is still no light at the end of the tunnel.

The final assault on PAP

PAP has been a very successful political party for nearly 50 years. Through this period, it was the dominant and unchallenged ruling party and well supported by the majority of people of all races and political affiliations. It has chalked up an impressive track record from successful policies that brought wealth and material comfort to the average citizens and all. And this track record has been the PAP’s first layer of defence. It always, without fail, waved this track record to the voters in every election. This is what we have done and achieved, and challenged the people whether their lives are getting better than before. Its two other armours are super talent MPs and Ministers and impeccable and selfless men and women in leadership roles.

This first ring of defence is starting to crumble. The people are having doubts of their well beings. The elite have no problem identifying with the great material success as everyone of them is a symbol of success.. Even then, some elite are also starting to question things that are not as right as before. Those further down the pecking order, needless to say, are clearer as to whether their lives are getting better or going to get worst.

The second level of defence the PAP has built around it is the quality of its leadership. They are able and talented men and women of great abilities. They are the best of the best, the crème ala crème of the country. This is now ringing hollow. Many policies have failed. Many ministries and ministers are found wanting in their areas of responsibility. And the new recruits at the lower level are viewed with so much scepticism and cynicism that it is not a laughing matter. It was like scraping the bottom of the barrel. The aura of greatness, of infallible men and women with great talents and ideas somehow is drawing a blank. Many are being ridiculed publicly in the social media, in public conversation and private gossip mills.

The third and final ring of defence, the integrity of the leadership, is now exposed to attacks. These include honesty, incorruptibility, moral righteousness, compassion, sincerity, selflessness and other goodness that are expected of benevolent rulers. Now the criticism and challenge are targeted at very personal level, very close to the heart and the persona of each and every leader in the party. This is not just about the ability to deliver anymore, though many are seen as not delivering. The people have gone past the stage of material well being. It is about the softwares, the ideas, the feelings, the hearts and the intangible goodness of being national leaders, to inspire and to lead, for the people and for the country.

When the characters of the leaders are being challenged, and if they cannot hold, there is nothing left to keep the party afloat anymore. Many good and charismatic rulers could survive and rule for years in spite of bad policies and bad administrations. No leaders can survive if they cannot win the support and trust of the people. The last chip to play by unpopular leaders that have lost the support of the people is to usurp power by ruling with an iron fist, authoritarianism, dictatorship, military junta etc etc.

Is the ruling party facing this final stage of assault on their rights and legitimacy to rule the country and people? If this is so, then it would not be long before the final curtain falls.

Contract for service, short term contract and employee

There are still many discussions with regards to the SMRT drivers and whether the pay for a job should be the same or different. Let me just share a little on the HR practices with regard to this.

In the case of a contract for service, the workers are employed simply to do a specific job with a specific pay. Period. There is no employer employee relationship, no benefits or difference in pay between one worker and another.

In the case of a short term contract, there is an employer employee relationship, but the pay can be different and the terms and conditions of employment can be different. The main argument in this SMRT driver issue is whether the pay should be the same or different.

Allow me to clarify this. Thereotically, the basic pay for jobs of the same specification is the same. So there should be no quarrel over the job worth. Two persons doing the same job would be paid the same basic pay for that job. In practice this is hardly the case.

The computation of an employee’s pay, assuming new sign ons, will still have to take into consideration many other factors. Qualifications and experience would affect the pay offered if they are relevant. New sign ons could be offered different starting pay because of these factors.

The other factor that is in play in this case is the nationality. Workers come from different countries with different cost of living and could be comfortable with different pay offered. $100 can be a lot in some countries and not enough in others. A simple example is the pay of a similar worker producing Apple Iphones in Indonesia, China or Thailand. Their pay will be different for the same job because of the country they are in. If they are to be paid the same as those in the USA, then there is no advantage to farm out such jobs to lower cost countries. Same job different pay because of different cost of living of a country is only practical.

An added factor to this is that the foreign workers are not working in their own countries and bearing the respective cost of living. They are now in Sin City and have to bear the higher cost of living here. Thus, this point must also be input into the pay to ensure that they are adequately compensated or else it will be meaningless for them to be here. This amount could be the same to all foreign workers here as it is related to the cost of living here.

Employers also have to account for the cost involved in hiring them. And the workers must also take into consideration the amount they have paid to the recruiting agents to be here.

In summary, employers recruit foreign workers for competitive cost advantage. But there are occasions when there is a shortfall of skilled local workers and employers would be willing to pay more to bring in foreign contract workers even at higher pay then locals to complete a job. The final computation of pay for a worker is thus not a simple factor of same job same pay irrespective of nationalities and other factors. The critical issue is that the pay must be fair to the workers and to the employer after taking into consideration all factors, and both parties perceived that it is fair. This is the tricky part of salary administration. It is not QED.

The deadly derivative game

Justice Pillay had made a major ruling against Deutsche Bank of the lost of $59m for recommending derivative trading to a client few days back. In 3 months, the client, Dr Chang Tse Wen, lost $59m! This must be a kind of a record for the speed and the sum to be lost by an individual client.

The client was recommended to put money in discounted share purchase programme commonly known as accumulator. Whatever names they called it, derivatives, in whatever combinations or clever arrangements, are nothing more than betting slips. They are not investments but high risk betting or gambling.

How could such gambling slips be approved and be sold so widely across the world is troubling. The amount of derivatives bought and sold is mind blogging and could be the very instrument that could collapse the world financial system. But many high net worth clients would have to go first, losing their millions and their pants.

Investors who do not know how the derivative games are played are best to stay clear from such instruments.