Leong Sze Hian
Starting September 2009, parents of intellectually disabled children can set up a trust for their children, with the newly formed Special Needs Trust Company.
The projected return on trust funds is three plus per cent per annum, as the funds would be put in low risk income producing investments.
The up-front fees payable for investing the trust funds are 6 per cent for the first $5,000, 4.75 per cent for the next $2,000, 3.75 per cent for the next $3,000, 2.5 per cent for the next $10,000, and 2 per cent for subsequent amounts.
The fees charged on the interest earned is 5 per cent for the first $1,000, 4 per cent for the next $1,000, 3 per cent for the next $1,000, and 2 per cent for subsequent amounts.
In addition to the above fees, there is also a set-up fee of $1,500, annual pre-activation fee of $250, one-time activation fee of $400, and annual post activation fee of $400.
Parents have been informed that the minimum amount to start is $10,000.
For $10,000, the up-front fees payable for investing is $507.50, annual fee on interest earned (assuming 3.5 per cent interest) is $17.50, set-up fee is $1,500, and annual pre-activation fee is $250.
Does this mean that it may take more than 12 years for the compound rate of return of 3.5 per cent to re-cover the total fees of $5,217.50? ($1,500 set-up + $250 x 12 years pre-activation + $507.50 up-front + $17.50 x 12 years interest fee)
Similarly, for an amount of $50,000, it may take more than two years to re-cover the total fees of $3,517.50.
Once the trust is activated, the annual fees will be $480 ($400 post-activation and $80 fee on interest earned).
This means that about 27 per cent of the annual interest earned of $1,750 (3.5 per cent of $50,000) may go to paying the annual fees.
After paying the various fees from the projected annual interest of three plus per cent, the net return may hardly be able to beat inflation.
This scheme is also meant for lower and middle-income parents who may not be able to afford or have access to private trust services.
With the amendment of the insurance act this year, parents may also like to consider an alternative, primarily from a costs perspectively, that is from September 2009, parents can set-up or possibly use an existing investing-linked account, an irrevocable trust naming the children as beneficiaries and appointing trustees.
Such a trust arrangement is free, and does not incur any set-up, activation or pre/post activation fees.
In view of the above, I would like to suggest that the scheme and its charges be reviewed, as I understand that this new scheme is the outcome of years of proposals, deliberations, and calls from parents, to help address their concerns of pre-deceasing their intellectually disabled children.
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maybe the trustee managing the funds have got special needs too… that’s why need to pay such high fees…
“The projected return on trust funds is three plus per cent per annum”….
3% is not even enough to beat inflation.
Has Temasek and GIC lost so much that the govt needs to use this as a ruse to con more money? After conning able-bodied citizens in the form of CPF, ERP, GST, etc, now they’re setting their sights on those with special needs…
How low can one stoop?
giving a billion dollars to the special needs children is NOT OK
loosing ten or twenty or forty billion dollars in bad investments is OK
what has newater done to some folks?
nabei
wah our prince the prime minister his son same status as us the ordinary peasants har?
what is next? upon birth when the baby is ABnormal+..suffocate the baby to death perhaps?
As parent, I’m utterly disappointed with this Trustee Scheme! Where do we find $$$$ to keep topping up to maintain the fund & pay the very high fees req’d?? It’ is fortunate that Mr Leong show us the breakdown otherwise we parents will be ‘donating’ our $$$$ to ??? !!!
Some say one can afford to Die but not to be Sick or something along that line.
1. Medical Fees : becoming old and no money to pay and pay expensive medical services.
2. Abnormality / Defects / Illness: having a child that cannot compete with FTs that are able bodied and having >= normal brain.
Having said this, its not the end of the world for people with disabilities or illness or defects. It just means life in a competitive and expensive place will be tougher than normal.
It’s a very sad situation we face in Singapore!
Even when the citizens (and tax payers too) are prepared to save up for their ID offsprings to fund their needs when the former have passed on, the government is not prepared to provide the management and administration without levying a fee! Business as usal I guess!!!
At the same time the government is considering making it a law for filial piety! All the time we are promoting leadership by example but where are the exemplary leaders?
Parents of ID children may be distressed enough with the extra care and expenditure for their children, the last thing they need is the complicated fee structure and amount to pay. All I can say to the money mongering Ministers up there is, please come down (to earth) and visit your people some time, at least once in your high places. It will do your position and your soul a lot of good.
If Temasek can set up a foundation fund of 50million to help people of other countries in the region couldn’t they do the same or set aside a percentage of their long term profit (as recently declared by HC with respect of recent losses) to help those disabled people left behind after their parents past on. After all Temasek’s money is our peoples’ money.
If singaporeans are indeed HAPPY people,
and Family is the source of Joy,
why so many are not getting married and so many married but not intending to have babies or having only 1 baby?
I see all the zeroes each month happy is it?
This is despicable! that comes from having a government which has strong business links.
Think LDP, vote out PAP.
If they can even set aside 10 millions to make foreigners feel at home, but not willing to help the ID and their parents. This is a sad case, They only know how to enrich themselves by having millions dollars salary.
“With the amendment of the insurance act this year, parents may also like to consider an alternative, primarily from a costs perspectively, that is from September 2009, parents can set-up or possibly use an existing investing-linked account, an irrevocable trust naming the children as beneficiaries and appointing trustees.”
What are those? Can you direct the readers to these other scheme???
Instead of helping the ID, the gahment see it as an opportunity to make money. It’s sad and morally wrong. I don’t think we had elected a gahment but rather a pack of businesemen out there to take any opportunity to take more money from us. There is no social responsibility or duty of care toward the citizen. The spirit of public service is truly dead and the motto ” Money talk” rules. We are not a country anymore but a big hotel for people to stay and if one is broke, there is nowhere on the island for any of us. One just wonders why do we pay taxes? Why should all the male citizen have to spend 2 year of their precious life serving the NS? Who are we defending? This is not what we want.
Information on irrevocable trust
http://www.lia.org.sg
Ffor those low/middle income who have no spare $$ to feed the trust fund or have people to take care of their special needs child when they are gone, are they suppose to end their child’s life (share the same coffin) to avoid child being left alone, bullied, ill-treated or tortured? Money makes the world go round so no money no talk (assistance)!!
Up till this day, why our govt, big companies and those rich people willing to finance/help foreigners (in Spore and out of Sg) but don’t want to care for its own citizen? They talked about trust fund but in the end, who benefit from it?
Those low or middle income group who have no spare cash to feed the Trust Fund are the people most in need of help when they are old or sick. Look at this trust fund, they rolled out a Fund but not for the interest of special needs people.
Special needs parents or main caregivers from low or middle income group suppose to bring their beloved special ones into their coffin since they can’t find a trusted organisation or kind people to take care of their living special ones? This Trust Fund is a disappointment!! ….. “The projected return on trust funds is three plus per cent per annum, as the funds would be put in low risk income producing investments.
The up-front fees payable for investing the trust funds are 6 per cent for the first $5,000, 4.75 per cent for the next $2,000, 3.75 per cent for the next $3,000, 2.5 per cent for the next $10,000, and 2 per cent for subsequent amounts.” …. They just want our money!! Totally uninterested to think in our shoes or the well-being of those SEVERE special needs!!
FYI, there are some intergated special needs childcare and student care centres BUT no special needs centre to care for BELOW 18 years old (do not meet the entry requirements of special needs childcare and student cares).
http://www.specialneedstrust.org.sg/FAQ.html
The info on this web is vague. The cost incurred wasn’t illustrated.
Since SNTC is a non-profit trust company to provide trust services for the benefit of persons with special needs, why need above fees? ie set-up fee of $1,500, annual pre-activation fee of $250, one-time activation fee of $400 and annual post activation fee of $400 = $2550. Are we suppose to fund SNTC? Did I miss anything? I don’t see this Trust Fund work in our best interests.
After paying the various fees (use figures computed by Leong Sze Hian) from the projected annual interest of three plus per cent, the net return not only couldn’t beat inflation, WE ARE CASH STRAPPED till we, parents die, right?
Let’s not to use this site to vent our frustration but to appeal to the government for continuous improvement to this scheme. l am not sure how much we, the parents of special needs being involved in the process of setting up this SNTC. If the involvement is insufficient, then we could suggest to the relevant organisation to review the feedback or the current scheme.
Le’s work with the government for the sake of our special needs children. Few constructive proposals that we can try to influence our govrnment to consider:
- insurance with government appointed organisation such as SNTC or NTUC Income as “public trustee” for special needs
- Annuity plan for our kids with with government appointed organisation “public trustee” for special needs
- Will with government appointed organisation such as SNTC or NTUC Income, Minds, as “public trustee” for special needs
l knew that parents with special needs children from other countries teamed up to set up a trust fund or organisation to help themselves.
(l am disappointed too to see such scheme after so much anticipation when it was announced few years back about help for special needs.)
Hi KC
Yes, agree with you on working something out
Do contact me at pengchiew@yahoo.com
I have a special kid.. no special funds ..school fee is so so high n so difficult to get in..with no extra cash to save n no back up in our law..i wonder how to live?it mean no retirment for me too..Other countries hv so much plans for special kids…we hv long way to go..sntc is for wealthy family…mid income,single family w low or mid income cannot support the fund at all…therapy is a must for our kids but its charges is very high..30min worth of therapy can go up to $200..school fee can be $200 to $2000 per mth.haiz….