Deputy Prime Minister Lee Hsien Loong announced in Parliament last Friday that the Government is giving New Singapore Shares (NSS) to adult Singapore citizens. The total cost of the NSS scheme is $2.7 billion.

Qualifying Singaporeans will get between 200 and 1,700 NSS, worth $1 each. The shares will earn annual dividends in the form of bonus shares from 1 March 2002, at a guaranteed minimum of 3% per annum. An extra dividend will be declared yearly, equal to the real GDP growth rate (if positive) of the previous calendar year. This means that the better the economy performs, the greater will be the amount of bonus shares issued. The NSS cannot be traded or transferred. Both the NSS and dividends will be exempt from tax.

NSS holders will earn most by holding onto their shares until 2007. Even the lowest dividend rate of 3% p.a. is higher than the fixed deposit rates offered by banks today. However, those who need cash urgently can exchange their NSS for cash at any time, subject to not more than 50% of their allotment before 1 November 2002. Thereafter, 100% of their NSS can be withdrawn. Exchange for cash must be in minimum amounts of $200, unless the shares allowable for exchange is less than 200, in which case all of them must be exchanged.

The fastest and most convenient way to get cash from any NSS exchange is to request for direct bank credit. This will take a maximum of two weeks depending on how many people are asking for it at the same time. If the NSS holder does not give the CPF Board his bank account number, a cheque will be issued to him by mail. This will take up to three weeks. Special arrangements have been made with participating banks for those who wish to receive cash on 2 November 2001. They must mail their instructions with a valid bank account number to the CPF Board by 23 October 2001, or send them to the CPF Board via the NSS web sites / NSS PAL-Phone by 25 October 2001.

On 1 March 2007, all outstanding NSS will automatically be exchanged for cash at $1 each and paid to NSS owners. If an NSS owner passes away before 1 March 2007, his / her NSS will immediately be exchanged for cash and handed to the Insolvency and Public Trustee’s Office, for estate distribution, or claims by administrators nominated by the deceased.

All who qualify for the CPF Top-Up for 2000 / 2001 will automatically get the NSS.

Those who did not qualify for the CPF Top-Up can still get the NSS if they are Singapore citizens aged 21 years and above on 30 September 2001, and contribute at least $50 to their CPF account between 1 January 2001 and 31 December 2001. This $50 can be monthly CPF contributions, Medisave contributions or voluntary CPF contributions. Those who contribute $100 by 31 October 2001 for the CPF Top-Up for 2000 / 2001 do not need to make a further $50 contribution for the NSS.

This $50 contribution is not a co-payment for the NSS, but a way to ensure that they are not given to inactive CPF accounts. The NSS will be distributed free.

The number of NSS allotted depends on income level or housing type, age and NS status. Details are in Annex A.

From 17 October 2001, qualifying Singaporeans can check their allotment via :

• NSS Web Sites (CPF PAL-PIN required)
• <www.nss.gov.sg>
• <www.newsingaporeshares.gov.sg>
• <www.ecitizen.gov.sg/nss>
• NSS PAL-Phone: 1800-7-885-NSS (1800-7-885-677) (CPF PAL-PIN required)
• Community Development Councils (CDCs) – Internet terminals for public use (CPF PAL-PIN required), as well as help especially for the elderly (NRIC required), are available at all CDCs
• CPF Offices – NRIC required.

Depending on when individuals qualify for NSS, there will be three NSS issuance dates:

• 1 November 2001 if an individual:
• has qualified for the CPF Top-Up for 2000/2001 as at 15 October 2001; or
• has made a $50 CPF contribution between 1 January 2001 and 15 October 2001
• 1 December 2001 if an individual:
• qualifies for the CPF Top-Up for 2000/2001 between 16 October 2001 and 31 October 2001; or
• makes a $50 CPF contribution between 16 October 2001 and 15 November 2001
• 15 January 2002 if an individual:

• makes a $50 CPF contribution between 16 November 2001 and 31 December 2001.

Singapore citizens who need to make a voluntary CPF contribution to qualify for NSS should complete form VC6 in the NSS information package which they will receive in the mail. They can pay via:

Dividends will be paid in the form of bonus NSS every 1 March from 2002 to 2007, based on the individual’s holdings as at 15 February of that year. All bonus shares issued will be rounded up to the next whole number.

Dividends given out on 1 March 2002 will be based on the period 1 November 2001 to 28 February 2002, i.e. 4 months, regardless of when the NSS was issued. Subsequent dividends will be based on 12 months.

If an NSS owner gives up his / her Singapore citizenship, no dividends will be paid from the next dividend date. All outstanding NSS can be exchanged for cash according to the normal rules.

The NSS can be exchanged for cash at any time, limited to 50% of allotment before 1 November 2002. There is no limit thereafter.

There can be multiple requests for cash exchange, but each must be in sums of $200 or more. Amounts of less than $200 will be allowed only in the following two cases:

1. Before 1 November 2002: if the NSS owner was allotted 200 or 300 NSS, he / she can exchange for cash $100 or $150 worth of NSS respectively, plus any bonus NSS; and
2. On or after 1 November 2002: if the NSS owner has 200 or less NSS in total (including bonus NSS), he / she must exchange all the shares for cash.

• NSS Web Sites (CPF PAL-PIN required):

• <www.nss.gov.sg>
• <www.newsingaporeshares.gov.sg>
• <www.ecitizen.gov.sg/nss>

• NSS PAL-Phone (CPF PAL-PIN required): 1800-7885-NSS (1800-7885-677)
• CDCs – Internet terminals for personal access are available (CPF PAL-required) as well as help especially for the elderly (NRIC required)
• CPFB Offices – Via completed NSS Forms for Cash Exchange (NSS/1) available in the information package, either posted to the CPF Board or deposited in a CPFB Office.

Direct bank credit is the fastest way an NSS owner can receive the cash from any NSS exchanged. The money will be credited within two weeks of receipt of exchange instructions and a valid bank account number. If the account is invalid, a cheque will automatically be sent.

Cheque issuance will take about three weeks, but NSS owners can only get cash after depositing the cheque into their bank account. Those who wish to cash the cheque immediately may do so with their NRICs at all branches of Citibank, UOB / OUB, and selected DBS / POSBank branches up to 30 April 2002 (please refer to Annex B for details). Thereafter, this service will only be available at Citibank branches. A service charge of $5 will be levied for the cheque cashing service. The banks have decided to exempt those who are 62 years old and above from the service charge.

ANNEX A

ALLOTMENT TABLE FOR NSS