WEALTH MANAGEMENT AND MONEYSENSE PROGRAMME

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WEALTH MANAGEMENT AND MONEYSENSE PROGRAMME: 9.

Miss Penny Low asked the Senior Minister (a) whether there is any plan to grow the retirement wealth management market in Singapore; (b) if so, what specific instruments or policies will need to be changed or introduced; (c) whether his Ministry sees a need to improve the perception and returns on annuity plans for retirees, in view of the fact that annuity plans remain unpopular due to the poor understanding and returns of such plans.

10.

Miss Penny Low asked the Senior Minister (a) if he will provide a status update on the MoneySENSE programme and how many people have benefited from general half-day seminars and in an indepth manner like courses; (b) how will his Ministry rate the success of the programme; and (c) how much funds will be allocated in the next phase and what will be the areas of focus.

The Minister for Education (Mr Tharman Shanmugaratnam) (for the Senior Minister): Mr Speaker, Sir, with your permission, can I take both Miss Penny Low's questions together?

Mr Speaker: Yes.

Mr Tharman Shanmugaratnam: Sir, in developing the wealth management industry in Singapore, MAS looks to grow the number of players in the industry, as

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well as the range of products and services offered in the industry.

Wealth management and pension management services catering to the specific needs and demands of retirement will become increasingly important with the ageing population in Singapore as well as elsewhere in Asia. We are exploring how we can further develop the market for retirement products, including annuity products, which provide a regular income over an extended period of time. We will encourage asset managers and insurance companies to offer a range of retirement products and services, to complement the role of the CPF and meet different needs. We will also step up financial education concerning retirement needs and products, in particular.

The CPF Board is developing materials which will give CPF members more information on annuities. MoneySENSE is reaching out to the public by conducting ongoing talks and, through the media, to raise awareness on retirement planning. And the National Council of Social Services is working with community groups and non-governmental organisations to develop guidelines to help the elderly make informed financial decisions. This is one of the initiatives coordinated by the Committee on Ageing Issues (CAI).

This will be a continuing effort in financial education. And in that connection, Miss Penny Low has also asked for a status update on the MoneySENSE programme. Since its launch, almost exactly two years ago, MoneySENSE has organised over 100 talks, seminars, courses and workshops. These activities have attracted over 12,000 Singaporeans from all walks of life. The events are quite well attended in general. For example, the recent MoneySENSE talk on investment-linked insurance plans attracted more than 500 participants.

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MoneySENSE has also published 16 consumer guides, which have been distributed very widely. Over one million copies were distributed. We have also been working with the media to disseminate financial education messages to a wider audience. Over the last two years, the local newspapers have published 85 MoneySENSE articles. MoneySENSE currently contributes fortnightly illustrations to the local newspapers to help consumers understand common financial documents, such as CPF statements and insurance policy benefit illustrations. And the broadcast media has also been very supportive of this effort.

Overall, based on the outreach statistics and feedback from participants, MoneySENSE is off to a good start. The coordination amongst Government agencies as well as the strong support and commitment we have received from the various industry associations, community groups, consumer bodies, grassroots organisations and media is enabling us to bring financial education to a wide group of Singaporeans. But there is much work ahead.

Earlier this year, we conducted a national financial literacy survey to benchmark Singaporeans' financial literacy. The survey identified gaps amongst Singaporeans in saving for emergencies, and planning for retirement. For example, only a quarter of adult Singaporeans had calculated the amount of money they need for retirement years. There was also inadequate understanding of common financial products such as life insurance and unit trusts, let alone things like structured deposits. The survey also revealed some wide variations in levels of financial literacy among different segments of the population.

So for the next phase of financial education, we will place special attention on those segments of the population that

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have low levels of financial literacy and are in greatest need of it. We will implement customised financial education programmes targeted at these segments of the population. One such areas of focus is low-income families. MoneySENSE and the Community Development Councils (CDCs) have jointly organised a programme - it is called the "Talking Dollars and Sense" programme - to educate those families who are on financial assistance schemes on basic savings and budgeting skills. The programme comprises a workshop as well as practical follow-up sessions where a trainer meets each family, one on one, over two follow-up sessions, to review their progress in managing their budgets and to help them set new targets for their savings, so that we can achieve over time a degree of self-reliance.

Another ground level initiative is financial planning for families. MoneySENSE has also worked with the Securities Investors Association (Singapore) and the Singapore College of Insurance (SCI) to launch a series of "Financial Planning for Families" seminars at community clubs to teach families how to plan for retirement. This series of seminars will run for five years and will reach out to many families. We will also be launching a quarterly newsletter in each of the major local dailies and all four languages to bring useful information and tips on money matters to the general public.

As for funding, the Government has allocated $3 million from the Financial Sector Development Fund (FSDF) to fund MoneySENSE programmes from October 2003 when we first started to October next year. It is a three-year programme. We will review the funding arrangement for MoneySENSE by the middle of next year.

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Miss Penny Low: Sir, may I declare my interest here. I was indeed one of the people who kick-started the "Talking Dollars and Sense" programme, although I am no longer involved in it.

Would the Minister consider extending that scheme itself or similar schemes to NGOs, VWOs and especially family service centres where you could do capacity building within these centres that already have a clientele of low income or needy families, or even dysfunctional families? Because certainly if we can help them to get financial problems out of their way, they would be able to get their lives together better.

Mr Tharman Shanmugaratnam: Sir, this is a very useful suggestion. We started off with the CDCs and I think they are learning from the experience. Both the CDCs, MoneySENSE as well as the private providers are learning from the experience. It will be a useful idea to broaden our viewership to family service centres and VWOs who have a clientele who are in need of basic advice on financial literacy.

Mdm Ho Geok Choo: I would like to ask the Minister, in preparing for a more ready population going forward, if he would consider incorporating maybe a modified version of the MoneySENSE programme into schools, as part of the moral education for students, knowing that children can actually be a very positive influence on their illiterate parents.

Mr Tharman Shanmugaratnam: That is the approach we agree with. We are in fact infusing financial literacy concepts into our school curriculum, starting in a very simple way from upper primary levels but extending into secondary school's CME classes, as well as other subjects like Mathematics, Social Studies, and so on. I use the word "infuse" deliberately. We are not incorporating a new

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component to the curriculum; we are not adding on to the curriculum. But it can be woven quite naturally into a Mathematics class; it can be woven quite naturally certainly into CME. It is really part of the life skills we want to inculcate in every young child when that person becomes a young adult, not just for the sake of them being able to pass on tips to their parents. But they would eventually be heads of households and we want them to have the basics in place. So, yes, we are working very closely - MoneySENSE, together with the Ministry of Education, and various other providers are working closely. We have been training our teachers. We have been providing them with guides and examples of lesson plans. And it is being rolled out fairly effectively.