hi, all,wishing each and everyone a truly blessed, healthy and prosperous lunar new year. these chinese new year holidays are meant to give us a nice breather from our daily hectic work schedules but sigh, with the breather also brings with it, the yearly tradtional visits (pai nian) to the homes of family members, relatives, colleagues and friends which can be rather taxing but i'm certainly not complaining except for the fact i sure 'lose' one in terms of the other traditional practise of giving hongbaos because i have one son only as against the national average of 2 or more children for other families.oh well, let me not digress because the topical news is on the new cpf rules on investments kicking in on april 01, 2008:NEW! - How the CPF Reforms Affect CPFIS1) What are the new restrictions on the CPF Investment Scheme (CPFIS) arising from the CPF Reforms?From 1 April 2008, you will not be able to invest the first $20,000 in your Ordinary Account and first $20,000 in your Special Account. To invest under CPFIS-OA, you will have to set aside $20,000 in your Ordinary Account before the remaining savings in your Ordinary Account can be used for investments. Similarly, to invest under CPFIS-SA, you will have to set aside $20,000 in your Special Account before the remaining savings in your Special Account can be used for investments. This restriction is in place because of the extra 1% interest that you will earn on the first $60,000 of your combined CPF accounts from 1 January 2008.However, you can continue to service your regular premium insurance policies (but NOT recurring single premium insurance policies or regular savings plans for unit trusts) and agent bank fees even if your Ordinary Account balance falls below $20,000.If you have already made investments using your Ordinary Account or Special Account balances, you will not be required to sell these investments.2) If I sell my investments after 1 April 2008, will I be able to re-invest the sale proceeds if my Ordinary Account or Special Account balance is below $20,000?When you sell your investments under CPFIS-OA, the sale proceeds will be credited into your CPF Investment Account. You may re-invest the balance in your Investment Account, even if your Ordinary Account balance falls below $20,000. However, if the sale proceeds is refunded to your Ordinary Account, you may not re-invest the balance if your Ordinary Account balance falls below $20,000.When you sell your investments under CPFIS-SA, the sale proceeds will be credited to your Special Account and you may not re-invest the balance if your Special Account balance falls below $20,000.3) If there are adjustments under CPFIS in my Ordinary or Special Account, what interest rate will be used?Any adjustments under CPFIS in your Ordinary or Special Account will be based on the CPF interest rates for the respective account. The interest rate will not include the extra 1% interest that is paid on the first $60,000 of your combined balances.4) Will the CPF Reforms affect my stock and gold limits?There is no change in the computation of your stock and gold limits. However, you will not be able to invest the first $20,000 in your Ordinary Account even if you have sufficient stock and gold limits.source: www.cpf.gov.sginspite of this and according to our minister for manpower, dr ng eng hen, up to $42 billion (or approximately 50%) of cpf-oa and cpf-sa balances will still be available for investments come april 01, 2008.however, the current president of the lia, mr mark o'dell is appealing to the government to allow money in cpf-sa to be invested in cpfis products but there has not been much progress as yet.the new ruling is expected to affect the big 4 insurers like aia, great eastern life, ntuc-income and prudential to a greater extent because of their bigger share of the cpf single premium market.my comments:despite the new rules coming onstream on the 1st day of the 2nd quarter of 2008, my sincere lunar new year wish is that the life insurance industry and all financial professions will remain primarily focused on wealth protection planning because the latest statistics from the life insurance association continue to show our population not only under-insured but the average death claim to be below $35,000.00 per policy as disclosed in the following:In 2007, the local life insurance industry paid out a total of $6.42 billion to policyholders or beneficiaries. Of this total, $328 million was in respect of death, critical illness and disability claims whilst the remaining $6.10 billion was in respect of policies that matured. The average claims payout for death was approximately $34,099 per policy in the fourth quarter of 2007. The average sum insured is estimated to be $31,970 and $47,933 for single premium and regular premium policies respectively. source: www.lia.org.sgalthough the tied channel still accounts for some 69% of sales, one other significant observation is the share of new business for the fa/ifa channel (including direct) has grown to an astounding 12%. but this has been at the expense of the bancassurance channel whose share has dived to 19%.my other lunar new year wish is for consumers to:a. not continue to sit on the fence in terms of not doing their wealth protection planning and periodic reviewsb. be more circumspect in the choice of their financial adviser.and another lunar new year wish from me is to appeal to our government to consider introducing two new cpf funded insurance schemes (with opt-out option):a. disability income planb. 30 critical illness coverthese additional insurance schemes will provide an 'umbrella' over the national medishield and the integrated shield reform implemented in mid 2005.and last but not least, my best advice for all consumers when sitting with ANY financial adviser is to exercise discerning facts from opinions.