29 July 2014

NUS, SAF Making Life Easier

It beginning to seem that some organisations are changing standards to make people happy.

Grade-Free First Semester
Two months ago, National University of Singapore ("NUS") announced that it will implement a grade-free first semester for first-year undergraduates who are on the modular system. Students will be graded and they can either keep the grade and have it counted toward their Cumulative Average Point ("CAP") or choose a satisfactory / unsatisfactory grade and not have it counted toward their CAP.

NUS says that the objective is to enhance the quality of an NUS education.

Everyone knows, of course, what will happen — students will opt to keep good grades and discard all other grades.

17 July 2014

Government's CPF Public Relations

The Ministry of Manpower and Central Provident Fund Board released the following advertisement (TODAY 16 July 2014):
It is a curious piece of public relations.

16 July 2014

Temasek's Protection Of Past Reserves

In its latest annual Temasek Review, Temasek Holdings (Private) Limited set out how it protects its past reserves.

"As a Fifth Schedule[1] entity, our Board has a responsibility to protect our Company’s past reserves. This includes ensuring that every disposal of investment is transacted at fair market value[2].

"Our Board and CEO have a duty to seek approval from the President before any draw occurs on our Company’s past reserves.

"There is no draw on past reserves as long as our total reserves equal or exceed our past reserves.

"Mark to market declines on existing investments would not be a draw on past reserves. Similarly, a realised loss on disposal of an investment would not constitute a draw on past reserves, as long as the disposal was done at fair market value."

10 July 2014

MediShield Life Winners

People With Pre-Existing Conditions
People with pre-existing medical conditions will be happy just to be covered under MediShield Life. The loading — up to 30 per cent for ten years only — barely covers the significant cost of insuring them. Existing MediShield policyholders will be forced to subsidise them, with the remaining cost being borne by the Government.

People With Undisclosed Pre-Existing Conditions
It is not clear how the MediShield Life administrator will determine whether anyone who is not a MediShield policyholder has any pre-existing conditions. There are likely to be quite a few people who will deny having any pre-existing conditions. Unlike private life insurance or hospitalisation insurance, there are no penalties (e.g., withdrawal of coverage) for lying about pre-existing conditions under MediShield Life.

09 July 2014

MediShield Life Losers

Existing MediShield Policyholders
People with pre-existing medical conditions will pay a loading of up to 30 per cent for ten years; thereafter, they will not be subject to any loading.

However, this loading is hardly enough to cover the significant cost of insuring them. Existing MediShield policyholders, many of whom bought MediShield coverage for no other reason than to protect themselves from future medical conditions (i.e., constituting pre-existing conditions if they did not have MediShield coverage before the diagnoses), will be forced to pay 3 per cent more in premium in cross-subsidies, in a twisted interpretation of inclusiveness and collective social responsibility. Such cross-subsidies will increase further when the 30 per cent loading on existing pre-conditions is removed.

The remaining cost, said to be 75 per cent of the total cost of providing MediShield Life coverage to people with pre-existing conditions, will be borne by the Government.

03 July 2014

Why Government Wants Pre-Funded MediShield Life

The MediShield Life Review Committee in its Report dated 23 June 2014 said:

"Distributing Premiums More Evenly Over Lifetime. Our Committee also heard concerns that the elderly could have a problem affording MediShield Life premiums, because the premiums would increase with age. We therefore recommend that premiums be distributed more evenly throughout one’s life, i.e. higher premiums during working age, so that premiums rise by less in old age. In addition, policyholders currently only start receiving premium rebates (which reduce the net premium) from 71 years old. We recommend starting the premium rebates earlier at age 66. This will enable Singaporeans who have just retired or are near retirement to start benefiting from having paid premiums ahead when they were younger."

The stated rationale for pre-funding doesn't make sense.