Thursday, October 13, 2005

Buying an annuity is a good option!

12 October 2005

Forum Page
Straits Times

I refer to the letter "Buying an annuity may not be the best option" by Dennis Ng Kah Wan (St Times, 7 Oct

Mr Ng said that if he keeps the minimum sum of $90,000 with the CPF Board, he will get a monthly payout of about $711 at the age of 62 for 20 years. He said that if this sum is invested in a life annuity, the payout will be between $398 and $483, depending on which annuity plan you choose and whether you are male or female.

Under the annuity plan now offered by NTUC Income, we pay a guaranteed monthly sum plus bonus. The bonus is determined yearly based on the average yield earned on the investments in recent years. Over the long term, we expect the bonus to vary from 1% to 3% per year, but this is not guaranteed.

If the $90,000 is used to buy a life annuity at age 55, we expect to pay a monthly sum of $543 from age 62, comprising of a guaranteed sum of $473 and an estimated bonus of $70. The monthly annuity will continue to increase each year based on the bonus declared for that year. Assuming an average bonus of 2% per year, the
monthly payment is expected to reach $662 at 72, $807 at age 82 and $984 at age 92.

The life annuity offers two attractions:

- it is payable for the lifetime of the annuitant
- the payment will increase with bonus in most years, providing a cushion against inflation.

From actuarial statistics, about 30% of male and 40% of female are expected to live beyond age 82. This proportion is expected to increase in the future, due to longer life expectancy.

Over 25,000 people have bought a life annuity from NTUC Income. A large proportion of them invested their CPF minimum sum with us. They do not wish to take the risk of living beyond age 82 and running out of money. We have a market share of 65% of all life annuities sold in Singapore. The remaining 35% are shared among 5 other
life insurers.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Tuesday, October 11, 2005

Insurance Website of the Year


We are delighted to be awarded the Insurance Website of the Year in the 9th Asian Insurance Industry Award.

Our new website was designed by an internal project team comprising of our young officers. Our aim is to provide information that is easy to access and can provide useful information to the public. We adopt a practical approach in the design of our website, and avoid the excesive use of graphics, to reduce the downloading time.

We have a website in English, Chinese and Malay to cater to our customers who are familiar with the common languages in Singapore.

Our website now attract 10 million hits each month. It continues to grow rapidly each month.

The website will be the core of our business strategy for the future. It will be the central source of information for our customers, agents and employees. It will contain information about our products, practice notes, forms and other materials. All parties will refer to the same source of information. This will provide transparency and consistency of practice.

The website will be expanded to allow transactions to be submitted. We will actively advertise our website, and will attract more visitors.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Pay $6 an hour?

Today Paper

I refer to the article "15 jobless citizen enlisted in the mozzie inspector brigade" (Today, 11 Oct 2005).

I congratulate the Holland Bukit Timah Town Council for this excellent initiative to provide jobs to our unemployed citizens and to get them to do useful work. They go round the housing estate to look for potential breeding places of mosquitoes and take the remedial action.

These inspectors are paid $100 a week for 25 hours of work. This works out to a hourly rate of $4.

I suggest that the town council should consider paying $6 an hour. For a person that works 8 hours a day, this will give an income of $1,000 a month. This is necessary to meet the high cost of living in Singapore.

By paying a more adequate rate, the workers can work with pride and treasure their job. They will not move to another employer that pays slightly more. They can build expertise.

I understand the reluctance of the government to impose a minimum wage, due to the need to keep business cost down in Singapore.

Perhaps, the publicly funded bodies can set an example to pay a more adequate wage, and this can set the benchmark for other employers?

Tan Kin Lian

Monday, October 10, 2005

Culture of Goodies

The organiser of a corporate outdoor event said that they gave out 1,500 goodie bags, with tee-shirts and other attractive items.

1,500 people collected the goodie bags. Only 300 took showed up for the outdoor event.

Is this cheating?

Cheating on bus fares

Some people cheated on bus fares. They tap their ezLink card immediately on boarding the bus (instead of time of exit), so that they pay a lower fare. The government is passing a law to punish these cheats.

Is there a better way to handle this problem?

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