Co-Ops Brought up to Speed

60 cents | http://www.ntucthisweek.org.sghttp://www.ntucthisweekk.org.sg | MICA (P) 295/10/2007 19 SEPTEMBER 2008 Pg14 Stand Tall Pg 5 Plus 5 Makes Pg Where A Door Closes, Pg Be Connected And Win An ASUS Among Giants 4 A Perfect 10 6 A Window Opens 12 EEE-PC 4GB White Model UP Co-ops Brought Up To Speed he changing face of cooperatives in Singapore With 1.7 million individual over the years has brought about changes in members, their impact the way they are to be run. Under a Bill passed in Parliament on 16 September 2008, legislation and signifi cance on the lives of governing the cooperative sector in Singapore “ordinary Singaporeans cannot be Twill be streamlined for greater accountability, governance underestimated.” and risk-focussed regulatory regime. The changes also seek to make cooperatives more fl exible, competitive and Halimah Yacob on the role of co-operatives. conducive for growth. Moving the Co-operative Societies (Amendment) Bill, Minister of State for Community Development, Youth and Sports Mrs Yu-Foo Yee Shoon told the House that the legislative changes in the Bill are introduced after consultation with key stakeholders of the cooperative movement, all the cooperatives and the public. Based on the recommendations of an interagency team that reviewed cooperative regulation, she said the “changes are necessary for the long-term development of cooperatives in Singapore”. Mrs Yu-Foo said the most affected will be the credit cooperatives, or thrift and loan societies, that number 41 out of 87 registered cooperatives today with about 1.7 million members: “They will need to adjust to prudential and other regulatory requirements consistent with their greater today leaves much to be desired. custodial responsibility.” Having said that, Madam Halimah called for measures With the last major amendment in 1980, Mrs Yu- to make smaller, less established cooperatives more Foo said updating is necessary to be relevant: “Some effective: “There is a great disparity today in terms of growth cooperatives have complained that the law is too restrictive, and development of cooperatives in Singapore, and smaller especially when they compete with companies as the cooperatives could benefi t from a sustained programme Companies Act does not have these restrictions. As a that they can rely on for expertise, skills or any other form of result, cooperatives are not able to respond fast enough in help. Due to their small size, they may not be able to have today’s rapidly changing business environment.” access to such capabilities.” She highlighted the important social role that Labour MP and NTUC Fairprice Managing Director NTUC cooperatives, in particular the big players like NTUC (Singapore) Seah Kian Peng was also all for the changes, Fairprice Co-operative Limited and NTUC Income Insurance saying: “As we embark on this round of legislative changes, Co-operative Ltd, play in moderating the prices of food, I see it as a step towards the anchoring and strengthening insurance, dental and medical care, child and elder care of the role of the cooperative movement in Singapore. and other services to society. Hence, it is imperative to Having these measures in place will reinforce corporate effect the legislative changes to maintain the status quo. governance and accountability, and improve public Labour Member of Parliament Halimah Yacob said: confi dence towards cooperatives.” “the reach of the NTUC cooperatives today has gone far Cooperatives have at least one year from the beyond that of its members as evidenced by recent events” commencement of the amended Act to make the and hailed the amendments as “not only timely but also necessary changes to their by-laws. by necessary.” She also felt there is unfulfi lled potential in that Key features of the Co-operative Societies (Amended) Bill in page 3 Marcus Lin cooperatives having been in Singapore since 1925, 87 NNTUCTWTUCTW 1199 SSepep 008.ind8.ind 1 99/18/08/18/08 33:53:25:53:25 PPMM thisweekinparliament • workingfor 3 CPF Loosens Up For Key Features Of Cooperative Top-Ups And Study Societies (Amended) Bill by provide lifelong income through CPF LIFE, we Marcus Lin also recognise the important role of the family unit as a primary social support structure. Duties and accountability of For this reason, we have been progressively 1 cooperative board members clearly he Central Provident Fund liberalising the rules for CPF Minimum Sum spelled out. (Amendment) Bill that was passed top-ups by family members.” by Parliament on 16 September With regard to further education, he Cooperatives have to comply with 2008 has given Singaporeans more said: “As part of the Government’s effort to 2 accounting standards formulated by leeway to help themselves and widen the opportunities for Singaporeans the Accounting Standards Council. Tothers better deal with the future. to upgrade themselves, there are now Rules have been relaxed that pertain to Government subsidised degree and diploma Individuals convicted of fraud CPF Minimum Sum top-ups and the use of courses offered by local institutions where the 3 and dishonesty offences will CPF monies for further education other than qualifi cation is conferred by a reputable foreign be disqualifi ed from serving on the in full time courses with degrees and diplomas institution. These include degree courses under cooperative board or as key employees. from an “approved tertiary institution” heavily the Polytechnic-Foreign Specialised Institution subsidised by the Government. framework and ITE’s Technical Engineering Credit cooperatives will be subjected In reading the proposed Bill, Acting Diploma courses. 4 to more stringent registration criteria. Minister for Manpower Gan Kim Yong said: “We have decided to allow CPF savings to They will be required to have clearly- “As our population ages, we need to refi ne the be used for such courses as they are similar defi ned membership criteria. CPF system. Even as we help individual CPF to those offered by the approved local tertiary members to better grow their retirement nest institutions except that the qualifi cations are Credit cooperatives subjected to eggs through higher CPF interest rate and to conferred by foreign institutions.” 5 higher levels of governance at board and management levels, and to have Audit Committees to review the internal CPF Minimum Sum 2008. This will allow time for givers to take controls and audit plan. • Annual cap of $26,393 which is advantage of the new tax exemption of imposed on all mandatory and voluntary up to $7,000 of top-up announced earlier 6 Only members and immediate contributions will no longer apply at Budget when they make cash top-ups families can make deposits in credit on Minimum Sum cash top-ups for to other CPF members before the end of cooperatives. They can give out loans recipients below age 55. the year. This exemption will be in addition only to their employees, members and their immediate families. • Minimum Sum to the $7,000 exemption for making cash cash top- top-ups to their own CPF accounts. Credit cooperatives to concentrate ups would be 7 on their core thrift and loan allowed up to CPF Education Scheme operations and not use depositor funds the prevailing • CPF monies can be used to establish other lines of business. Minimum Sum, for courses conducted at Topping Up Goes A Long Way. like Minimum an “approved educational Cooperatives no longer need the Sum CPF top-ups. institution” in Singapore. 8 Registrar’s approval for investments • CPF Board does not need to refund top- The approved educational in property and other cooperatives. ups in excess of the annual cap. institution need not be a tertiary institution, • CPF members will be allowed to No need for a cooperative to set and the course of study 9 receive cash top-ups to their Special aside a portion of its surpluses as conducted may lead That Piece Of Paper Is or Retirement account from all parties, Within Reach. a statutory reserve fund in its balance to a degree or diploma including extended family members and sheet. conferred by another educational employers. institution (includeing a foreign educational The Registrar will no longer set • Restrictions on the recipient-member’s institution). 10 honoraria limits for cooperatives. It age and the relationship with the giver • The amendment facilitates administration is to be approved at a general meeting for cash top-ups removed. of the scheme and for the recovery of of the cooperative. • When the recipient of top-ups dies, or in sums not returned to the member by the the case of a non-citizen recipient, when student or guarantor to benefi t from the 11 To facilitate the registration of more he withdraws his CPF upon leaving Government Proceedings Act. cooperatives, the Bill will allow the Singapore permanently, cash top-ups • The CPF Board can recover monies paid Registrar to accept declarations from would be treated as if they were gifts to to an educational institution in error, and applicants that they have complied with the recipient. Currently, top-ups via cash where the educational institution had the registration requirements. or CPF would be returned to the giver. caused or contributed to the error, to However, cash top-ups made after the The maximum fi ne will be raised to be reimbursed for reasonable expenses new rules take effect would no longer be 12 $50,000 for more serious offences incurred in rectifying the error, and to be returned to the giver. In the case of the such as providing fi nancial services indemnifi ed against any liability incurred. It recipient’s death, the cash top-ups will without being registered as a credit allows the CPF Board to refuse permission be distributed by way of CPF nomination society.

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