Consumer should also act responsibly and fairly

24 October 2005

Editor
Online Forum
Straits Times

I refer to the letter from Lai Chong Seng entitled "Consumer protection law should also cover financial services" (ST Online, 21 Oct 2005).

NTUC Income supports the proposal to extend the consumer protection law to cover financial services.

We believe in offering products that are fair to consumers. We are a cooperative society and do not intend to make profit at the expense of our policyholders. We distribute most of our annual surplus to our policyholders, and distribute them fairly.

We believe that the law should also encourage consumers to act responsibly and not pursue their self-interest at the expense of business organisations.

I now wish to address the issues raised by Lai Chong Seng.

We have always made in clear in our communciation that non-guaranteed bonus could mean zero bonus in some bad years. In illustrating our bonus, we act responsibly in estimating the likely investment income in the future. Our illustration in 1996 reflect the global economic situation at that time.

Subsequently, the global economy went through several years of low interest rate environment. This has reduced the return on investments. Mr Lai was protected by the high guaranteed rate of return on his annuity. He has benefitted from his annuity contract.

It was made clear in our policy contract that the bonus is declared by the appointed actuary. In doing his work, the actuary has the duty to be look after the solvency of the insurance fund and the long term interest of all policyholders.

Each year, the actuary recommends to the board of directors on the rates of bonus to be declared for different series of policyholders, and ensures equitable treatment of all policyholders.

As this is a complex matter, it is not possible for the bonus declaration formula to be spelled out in the policy contract.

In 2001, we issued two new series of annuity contact to offer a lower guaranteed return. This was necessary to reflect the lower interest rate. The new series did not adversely affect the old annuity contracts, such as the annuity taken by Mr Lai.

Although the new annuitants enjoy a bonus during the last two years, they still receive a lower return compared to the high guaranteed return enjoyed by Mr Lai.

I understand that Mr Lai has raised this issue with us in the past. We have provided the explanation to him previously. He is still not convinced.

If Mr Lai still feels that he has been misled into buying the annuity contract, I wish to offer him a refund of his invested sum with interest at 4.5% per annum, less the annuity payments that he has received.

The proposed rate of 4.5% is the average net rate that was earned on our investments during the past 10 years. I shall also be making this offer to other annuitants who had bought the same series of annuity as Mr Lai.

Tan Kin Lian
CEO
NTUC Income

Use MMS to take picture of accident

USE MMS TO TAKE PICTURE OF ACCIDENT

NTUC Income has come out with an innovative way to help policyholders in their motor accident disputes through the use of MMS technology.

NTUC Income handles about 2000 accidents each month. About 10% of these cases involve disputes between the parties on the cause of the accident. The parties give conflicting versions in the accident in the accident report. This makes it difficult for the insurers of the vehicles to decide on the party that should pay for the damages.

Some motorist try to distort the fact of the accident so that they can avoid liability. They want to put the blame on the other party and keep their No Claim Discount.

To help our policyholders in these disputes , NTUC Income is starting a service to encourage them to send an MMS of the photos taken at the accident scene. Many motorists now carry a mobilephone that can take pictures and send them to us immediately by MMS.

Photos showing the position of the vehicles as well as the damages caused by the accident are useful in the investigation of accident liability. It will also prevent aggravation of damages after the accident to inflate the repair cost.

Our policyholder should also give other useful information like the third party claimant's contact as well as whether there are any injuries substained due to the accident.

The MMS can be sent to XXXX XXXX to be stored directly into our server. Alternatively, the motorist can download the photo into a computer and send them to us by e-mail at photo@income.com.sg. When the motorist call our 24 hour accident reporting center, our staff will tell them about how to send the MMS or e-mail.

We hope to solve 50% of the disputes through the use of this new initiative.

Tan Kin Lian
Chief Executive Officer
NTUC Income

You can buy the annuity between 55 and 62

22 October 2005

Editor
Forum Page
Straits Times

I refer to the letter "Buying annuity ? No need to rush, can wait till 61" by Mr Dennis Ng Kah Wan (ST, 20 Oct 2005)

Mr Ng said that in the current low interest environment, it is better to leave the CPF Minimum Sum in the retirement account to earn guaranteed interest of 4% per annum. There is no need to decide whether to convert the minimum sum into annuity at age 55.

I agree that the guaranteed interest paid by CPF is attractive. The retiree also has the choice to decide on buying the annuity at any time between 55 and 62. Many of them are aware about this choice, if they speak to our insurance adviser.

As stated in my previous letter, if $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 bonus amount will depend on our investment yield in future years and is not guaranteed.

If the $90,000 were to be kept in CPF Retirement Account up to age 61 years and 11 months, the sum will grow to about $118,000. Using the sum to purchase an annuity then, the monthly payout from age 62 will only be $528. Based on this example, an earlier purchase of an annuity is a better decision.

I will let each retiree decide on whether it is better to buy the annuity earlier or later. If you buy the annuity later, you will have to take the risk that the plan may not be available at that time, or the terms may change.

For people who are interested to know more about the annuity plan, I suggest that they attend our educational seminar. I will be happy to make a presentation and to answer questions from the floor.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Annuitants who did not receive a bonus in recent years

22 October 2005

Editor
Forum Page
Straits Times

I refer to the letters "Don't bank on bonuses to boost monthly payout" by Mdm Ng Lee Chin and "Why was no bonus declared?" by Chen Zhide and Chiang Bak Hoi (ST, 20 Oct 2005).

The three writers bought an annuity plan from NTUC Income. They were disappointed that they have did not receive any bonus during the past three years.

From the information gathered, the writers have invested in our earlier series of annuity policies.

NTUC Income started the participating annuity plan in 1993. They offered high guaranteed payout. For example, a male at 55 investing $90,000 was given a monthly payout of $765 per month. The annual payout amounts to 10.2% on the amount invested. This is a very attractive payout, considering the low interest rate environment
in recent years.

For this series, we used a guaranteed interest rate of 5% to compute the guaranteed payout, and pays a bonus if our average investment yield is higher than 5%.

The annuity is payable for a lifetime, which may stretch for 25 years or longer. In the event of early death, the annuity is payable for a minimum of 15 years.

As the average investment yield in recent years was less than 5%, this batch of annuitants did not receive any bonus. But, they did receive an attractive guaranteed payout which is more than can be obtained from other types of low risk investment today.

We introduced two new series for new purchasers. The series introduced in 2002 provided a lower guaranteed payout, computed on an assumed interest rate of 2.5% per annum. They will receive a bonus if the average investment yield is higher than 2.5%. This batch of annuitants have received a bonus of 0%, 2%, 2.5% during the past 3 years, or an average of 1.5% per year.

We have notified our annuitants on several occasions about our system of declaring bonus on their annuity plan.

We invited our annuitants to a dialogue session on 26 February 2005 for them to ask questions and seek clarification. About 100 annuitants attended. At the dialogue, the earlier batch of annuitants realised that they had a better payout than the later batches. The later batches of annuitants asked if they could be placed in the same footing as the earlier batches. We explained that this was not possible.

As an insurance cooperative, NTUC Income aims to act fairly in the interest of all policyholders, including annuitants. We declare most of our surplus to our policyholders, and invest their money prudently to safeguard their long term interest. We distribute the surplus fairly to all policyholders.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Two ways to buy a life annuity with your CPF

A CPF member is required to keep $90,000 in the CPF to be withdrawn in monthly installments. He can buy a life annuity with this sum.

Here are two ways to buy the life annuity:

- buy at age 55, and receive the monthly payment from 62 years.
- keep in CPF to earn 4% per annum, and to buy the annuity at age 62

Which is better?

If you buy the annuity at age 55, we pay you a guaranteed interest of 2.5% and bonus that depends on the earnings of our insurance fund. Based on our past record, we expect the bonus to vary from 1% to 3%, but this is not guaranteed.

If you keep in the CPF, you will get a guaranteed return of 4% per annum, which is quite attractive. You can invest in the life annuity after age 62. The amount that you can get depends on your age, gender and the amount invested.

Generally, our life annuity gives a guaranteed return of 2.5% plus a bonus that depends on the earnings of our insurance fund. We also give a higher payout, as the capital sum is consumed during your lifetime.

Many people find it quite attractive to buy an annuity at age 55. The guaranteed return of 2.5% plus the bonus (assuming 2% per annum) will be better than keeping the money in CPF.

Pay an annuity to an injured person

Some people are injured in an accident. They are paid a lump sum as a compensation.

It is better for these victims to receive an annuity of $X a month for a certain number of years, or for a lifetime.

This ensures that the money is used for the purpose, ie medical and living expenses, and not used for other purpose, eg buy a property or speculate in investments.

Pay regularly using an annuity

Singaporeans donated $70,000 to the parent of the Nepalese twin (Gangga and Jammu) to take care of their expenses for 8 years. The parents claimed that they did not receive the money.

It would have been better if the money had been given to the parent in the form of a monthly annuity. The monthly payment could have been around $800. This will ensure that the money is used for the living expenses, and not used for other purpose.

A 8 year term annuity is suitable for this purpose. Technically, this is called an "annnuity certain", but I prefer to create a new name, called the term annuity.

Buying an annuity is a good option!

12 October 2005

Editor
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
2005).

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

Insurance Website of the Year

STATEMENT

www.income.coop

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?

Editor
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

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?

Deductible under Shield plans

QUESTION:

I am currently a IncomeShield Plan B policyholder and will like to seek some clarifications on how claims are processed under IncomeShield.

An agent shared with me the attached article. It is taken from Business Times. It was doing a comparison on the payouts from the different Insurers. I was very surprised that most of the insurers, including Income does not pay a cent in the example where a policyholder stays at Mt Elizabeth for 2 nights.

Could Income explain how the claims are processed? For example, what items will be considered for the deductible. Lastly, if the policyholder had bought the IncomeShield rider, how does it helps in this example?

ANSWER:

All the Shield plans are required to have a deductible, representing approximately 5 days of hospital stay. The principle is that the patient should pay for the first 5 days, and the insurance will pay for 90% of the bill in excess of the deductible.

This condition is imposed by the Ministry of Health.

We offer a rider that charges a separate premium (to be paid by cash) that will cover the deductible and the balance of 10%. Many people have opted to buy this rider.

Tan Kin Lian
CEO, NTUC Income

Private shield plan can cost up to $3,500 per year

Customers compare the coverage offered by private shield plans. They think that the higher coverage, the better the plan.

Here are a few important facts:

- in most cases, the higher coverage is not needed, especially if the patient is treated in the appropriate ward in a restructured hospital.

- a plan that offers a higher coverage can cost up to 60% more in premium.

For example, under plan A, a plan that pays "as charged" will cost $3,500 per year at age 80. NTUC Income offers a similar plan that charges a premium of about $2,100 at age 80, ie $1,400 lower. Our plan pays the same amount for most of the typical hospital stays.

Private Pension Plan - opt out scheme

Prime Minister Lee has announced that the CPF is studying an opt-out pension plan for CPF contributors. The aim is to encourage CPF members to invest in a pension plan that can provide:

- a better return than CPF interest rate
- well diversified
- low charges.

The Combined Fund from NTUC Income fit into this description. By investing in the Combined Fund, the CPF member can get the benefits of the proposed opt-out plan and enjoy the freedom of choice.

Claim 100% of ward fees

Snow White asked this question: "What is your advice regarding the enhanced medical plan, where policyholders can claim 100% of the ward fees (less co-insurance) even if they opt to stay in better wards like B1 or A-wards? The premium are almost 3 times of the original Medishield plan. Should I stay with a hospital and surgical plan."

My reply:

- the limits provided under Incomeshield plan (from NTUC Income) is suffient to cover the charges in B1 and A ward in restructured hospital.

- our premiums are about 50% to 100% higher than Medishield, but are lower than the medical plans provided by other insurers.

- 800,000 people are insured with Incomeshield (giving the largest market share)

- it is better to buy an Incomeshield plan earlier, as it provides lifetime coverage. The H&S plan is a yearly renewable plan. You may not get the coverage when you leave your present employer.

Test your Logic: www.income.coop/logic9

Test your logic.

Try the Logic9 game at www.income.coop/logic9. This game is similar to the game called SuDoku, which is the craze in many countries.

You are to fill the blank squares with the digit 1 to 9, so that it is not repeated in any row, any column or any box (3 x 3).

For the easy version, you have to fill 3 out of 9 boxes. For the more difficult verion, you have to fill 4, 5 or 6 out of 9 boxes.

Have fun.

About Life Annuity

Editor
Today Paper

I refer to the letter entitled "Annuity conumdrum if I die early" by Lim Boon Hee (Today, 27 September).

Under the CPF Minimum Sum Scheme, a retiree is allowed to invest the minimum sum of $90,000 in a life annuity plan at age 55 and to receive the annuity payment from age 62.

Mr Lim asked what happens if the annuitant dies before age 62 (without receiving any payment) or at age 65 (after receiving only a part of the $90,000). Will the annuitant lose part or all of the $90,000?

Under the annuity plan now offered by NTUC Income, we will refund back the balance of the $90,000 with interest up to age 62, after deducting any payment that has been received by the annuitant. If death occurs before age 62, we will refund back $90,000 with interest. If death occurs after age 62 and the annuitant has received $20,000 (say), we will refund back $70,000 with interest earned up to age 62.

The annuitant will only lose the interest after age 62. This interest is left in the annuity fund to benefit the annuitants who live longer. The life annuity will continue to be payable for the lifetime of the annuitant, even if the annuitant lives beyond age 90 or 95 years.

If the retiree leaves the money in the CPF to earn interest at 4% per annum and takes out the monthly sum allowed by CPF, the minimum sum will be fully used up by age 82. After age 82, the retiree will have no further source of income.

With longer life expectancy, many people are expected to live beyond age 82. We can see many people around, who have lived beyond that age.

About 28,000 people have invested in a life annuity from NTUC Income. They realise the benefit of this type of insurance product. They do not wish to take the risk of living too long, and running out of money. We provide about 65% of all life annuity in Singapore.

If the retiree wish to leave behind some money for their family, they probably have a property and perhaps other savings or assets.

Tan Kin Lian
Chief Executive Officer
NTUC Income

NTUC's plan for low income workers

NTUC has suggested that workers earning less than $1,000 be exempted from CPF. This will save them 20% of their wages. They need the full wages to meet a basic lifestyle, due to the high cost of living in Singapore.

NTUC suggested that the government should top up the CPF savings of these low income workers, so that they can buy their HDB flat.

I think that this is a wonderful idea.

In some countries, the government pays people who do not work. It is called unemployment benefit.

The approach by NTUC is to encourage these unemployed workers to work, even if it is a low income job. The government can help them by contributing to their CPF savings. It is an indirect way to give some help to these workers, but they must work.

Wrong way to attract people to attend a seminar

I attended a seminar recently on investment-linked product. It was organised by a few important organisations.

There was no charge for the seminar. More than 500 people attended.

The organiser gave an attractive goodie bag (worth $15) and a sumptious meal (worth another $15). Some of the attendees appear to be regular attendees at these seminars.

Do we need to spend so much money to organise the seminar? Are we attracting the wrong people who attend for the wrong reason?

Reply to: Policies similar but returns differ

Editor
Forum Page
Straits Times

I refer to the letter from Mdm Dorothy Ballard entitled "Policies similar but returns differ" (Straits Times, 11 Aug 2005).

Mdm Ballard said that the endowment policy that she bought from NTUC Income 20 years ago gave a return on maturity of 5.47 percent compounded annually. A similar policy taken from another insurer gave a lower return of 4.29 per cent.

This difference in return, compounded over 20 years, produces a 14% higher payout from NTUC Income.

I wish to explain why it is possible for NTUC Income to give a better return to our policyholders:

- we are a cooperative society
- we pay lower commission to our insurance agent
- we keep our salaries and expenses at a modest level
- our shareholders receive a modest rate of dividend.

By spending less, we are able to give a better return to our policyholders through lower premium or higher bonus. This can amount to a lot of money over many years.

Many people think that the key factor is skill in investment management. This is not so. Over a period of years, most large sized funds will produce an average rate of return that reflect the economic fundamentals.

We hope to convince Mdm Bollard and other policyholders that it does matter who they choose to invest their long term savings with, and that they will choose a well managed cooperative.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Add a term rider to your Ideal plan (ILP)

Add a term rider (LTA or DTA) to an Ideal plan. It should be 20 years of savings. For example, if the policyholder wish to save $250 a month, the term rider can be for $60,000.

Under LTA (level term assurance), the term rider pays $60,000 on death during 20 years, plus the saving in the Ideal plan. After 20 years, the rider expires, and the accumulated savings (which is $60,000 plus gains) will be paid.

Under DTA (decreasing term assurance), the term rider pays $60,000 reducing by $3000 each year over 20 years, plus the savings in the Ideal plan. Although the term rider reduces yearly it is more than offset by the additional savings in the year.

On death at any time, the total payout (including the savings in the Ideal plan) should be more than $60,000.

The annual premium is:

Entry  -- Male --    -- Female -
Age     LTA   DTA      LTA   DTA    

25       84    42       55    25    
35      211    85      139    57    
45      686   290      455   190

The premium rate for DTA is less than half of LTA. The cost difference is more significant at the higher entry ages.

The premium rate for female is about one-third lower than males.

The annual cost of LTA and DTA at the younger entry ages (ie less than 35) is less than $200, and is highly affordable.

RECOMMENDATION: Add a LTA or DTA to our Ideal plan. The premium is level and does not increase with age.

Training Bond

New employees joining NTUC Income is required to sign an agreement to pay us back one month's salary if they leave our service within the first year.

This is a training bond. It is intended to compensate us for the cost of training the new employee. Our actual cost is much higher.

We have implemented this condition for the past five years. It has produced an unexpected benefit. A new employee who is not serious about joining us will not accept our job offer. Those who accept our offer are serious about making a career with us.

This is an effective "selection process". We get the right employee to join us. We enjoy a low turnover rate, and reduced wastage in recruiting and training the wrong people.

We have a few cases where the new employee is not suitable for the job. We ask the employee to leave and waive the training bond.

Singapore has adequate talent

I often hear the remark, "Singapore is short of talent".

I disagree. We have adequate talent. However, they are not well used.

We have many well educated people. Look at the number of graduates, including those who have pursued university degrees on their own. We have many MBAs.

The problem is: are they able to apply their knowledge well? The answer is, "many people are over-educated and under-utilised".

If they learn how to apply their knowledge effectively, we will have more than sufficient talent.

Pay an adequate hourly rate

I found, to my surprise, that casual workers are paid as low as $3 an hour, for example, at fast food outlets.

If they work for 8 hours a day, they earn only $500 a month. This is too low to make a living. The cost of living is quite high.

I suggest that the minimum wage should be at least $6 an hour. A person working 8 hours a day should earn about $1,000 a month all-in.

Maybe $6 is still inadequate, but it is better than $3.

Digital navigation system a hazard?

Editor
Forum Page
Straits Times

I refer to the letter entitled "Digital navigation system a hazard?" by Michael Yeo Khee Hiang (St Times, 10 Sept).

I have tried a few PDA and PC-based navigation systems in my car over the past 12 months.

They are very useful and quite safe to use. All provide clear voice directions and do not require the driver to watch the video screen.

By giving directions earlier, it helps the driver to keep to the correct lane and drive more carefully. It avoids accidents due to unfamiliarity with the roads.

It may take a new user a few days to get used to the system. During the initial period, the problem raised by Michael Yeo could arise. But, the benefit will accrue after that.

I encourage more cars to be installed with the navigation system to promote safe driving.

Tan Kin Lian
(sent in my personal capacity)

Car sharing for newly qualified drivers?

The Editor
ST Online
9 September 2005

I refer to the letter from Tan Tiong Heng (ST Forum Online 8 Sep 2005).

NTUC Income operates the car sharing scheme to provide an afforable means for its members to share the use of the cars owned by the cooperative. We operate a fleet of 180 cars located at 70 convenient locations. The current fleet serves 5,200 members.

At present, we impose a condition that a member must have at least 30 months of driving experience. This is to reduce the incidence of accidents. If there are many accidents, the cars will not be available and will adversely affect the quality of service to other members.

New drivers can borrow a car from family members, friends or colleagues. They also often benefit from being accompanied by another experienced driver while practising.

We do not think it is suitable for the car cooperative to mix the needs of new drivers with the general needs of our members. Nevertheless, we do adopt a flexible approach and will be prepared to waive the 30 month bar if the applicant can demonstrate his car handling capability.

We have taken note of the views of Mr Tan. We will see if we can set aside a few additional cars to serve the needs of newly qualified drivers.

Lewis Chen
General Manager
NTUC Income Car Co-Op

Risk is to your advantage

I advise investors to invest in a large, well diversified mutual fund, such as the combined fund operated by NTUC Income. They ask, "is it risky?"

I reply, "yes, but risk is to your advantage". Here is my reason:

- if you invest $100,000 to earn 2.5% for 10 years (ie a safe investment), you will get $128,000

- if you invest to earn 6% (ie a risky investment), you will get $178,000.

- risk can work both ways - you can get more or les than $178,000 at the end of 10 years

- if you get more than $178,000, you can realise your investment

- if the market is bad and you get less than $178,000, you can wait 1, 2 or 3 years for a better time to realise your investment

- risk is to your advantage, if you can wait for the right time to realise your investment.

Many people who attend my educational seminar agree with my statement, "Risk is to your advantage". They choose a fund that has a higher proportion invested in equities.

A wonderful message

A reader of my blog sent me this wonderful message:

Dear Mr Tan

Thanks for putting in the extra effort in writing a blog. Yours is very informative and straight to the point. No nonsense, short and sweet. It's the best I have ever come across.

Fuel Subsidy

Poor countries face a dilemma with rising oil prices.

If the government keeps the domestic price low, they bear the cost of the subsidy. Their people can take advantage of the subsidised price and buy more and make a profit from re-selling the fuel.

If they adjust the price to reflect the world market price, the ordinary people cannot afford the higher price.

What should they do?

Trading in Structured Warrants

Dr Larry Haverkamp wrote an article in Business Times. He said:

- many people are trading a lot of money in structured warrants
- last month the amount was $1 billion, representing 20 per cent of the stock exchange’s total trading volume
- structured warrants are a "zero-sum" game; for every $1 million won by some people, others will lose $1 million.

Dr Haverkamp also told me separately:

- the structured warrants are created by the issuing banks
- they set its price at issuance
- issuing banks are also the market-makers
- they do not reveal how much they charge for issuing the warrants OR for market-making

I have never invested in structured warrants, structured deposits and other complicated products. Without full disclosure of their costs, I prefer to avoid them.

I favour to invest in unit trusts that offer low charges. The investments are likely to earn an average of 5% to 8% per annum over the future. If the charges are less than 1%, I will be able to keep most of the profit for myself.

Handle issues at the proper level

As the CEO, I am available to my customers. I give my e-mail address for them to contact me directly.

Some of our customers are not considerate. They will ask me to handle an issue that can be handled through my colleague.

Here is an example. A policyholder receives a bill that he has already settled. He sends me a complaint that "the bill has already been settled".

My reply to the customer: "I believe that the bill tells you where you can call to make an enquiry. Frankly, I am the CEO but not the person who handles every enquiry. I will pass your enquiry to my officer. "

I hope that people can be more considerate.

Do not involve irrelevant people

A policyholder send an angry letter about not being able to use Medisave to pay the premium under the Managed Healthcare Scheme from 2007. He copied his letter to several ministers.

I replied to the policyholder:

quote
It is my policy never to reply to a person who writes to me, with a copy to the media or to important people in the government. I find this attitude to be unacceptable.

I suggest that you withdraw your previous e-mail (and notify the other people). If you write to me separately on this matter, I shall be happy to reply to you at that time.
unquote

He acted on my request and told the other people that he will liaise directly with me. Although this does not amount to a "withdrawal", I agreed to reply to him.

What is better than ??

Here is a brief summary of an excellent speech given by Butch Jimenez to the graduating class of the University of the Philippines:

What's better than focusing on the negative? Focus on the positive.
What's better than working hard? It's working smart.
What's better than dreaming? Imagineering.
What's better than doing something for yourself? Doing something for your
country.
What's better than a vision? A cause.
What's better than a long speech? Definitely, a short one.

Talk on Investment at Marine Parade Community Club

I gave an educational talk on investment at Marine Parade Community Club on Saturday 27 August. It was well attended with 200 participants. The Q&A session was very lively and interesting.

The audience found the talk to be useful. They also enjoy a bonus of 2% (ie $2,000 for an investment of $100,000) when they invest within 14 days.

We hold a seminar every week, either at NTUC Income Center (Bras Basah Road) or at a community club. Go to www.income.coop to find out about these seminars. Or call 6788 1111 to find out details of the next talk.

Lowest interest rate for policy loan

An AIA policyholder (Ms Bollard) wrote to the Straits Times to complain that AIA charge 8% for their policy loan.

Other insurers charge from 5.5% to 7%.

There is only one insurer that charge 5.5% for the policy loan, ie NTUC Income. The other insurers charge 6% to 7%.

Singapore is too hot?

Singapore is a nice place to live. It is safe, clean and pleasant.

It has a major drawback. It is too hot.

Long ago, we can enjoy the breeze, which makes life more comfortable. But, the breeze has gone. It is blocked by the buildings. The air conditioning from the houses also blow hot air outside.

I am looking for a way to create breeze. If we can have more breeze, it will be more pleasant.

We are now able to create drinking water using science, and be economical. Maybe, we can use our technology to create breeze?

When will the 10% discount on motor insurance cease?

Someone asked me, "When will the 10% discount on motor insurance cease? His car insurance will expire in a few months time. Will the discount be available on his expiry date?"

My reply, "If you wish to enjoy the 10% discount, you can call our hotline now and register. We will keep the discount for your next renewal. If you do not register now, you will not enjoy the 10% discount when the offer ceases in 1 or 2 months' time. "

So, act now. Register first. You can decide at the expiry date, if you wish to take up the offer.

Educate our young on "character"

Our education system focused on "excellence".

To be excellent, a student has to be top in the class. He have to compete against his classmates. Unconsciously, he learns to be self-centered and selfish.

I prefer an education system that is more balanced. Apart from excellence, it has to teach our students on "character". He has to learn to be considerate, to be generous, to be honest and to show concern for others.

Difficult to make regular saving?

A young person told me that his salary is not enough. He has to pay back a university loan. He finds it difficult to make regular saving. What is my advice?

I replied that his priority should be:

- be frugal and modest in his expenses
- repay his university loan in installments
- make regular saving of 10% to 15% of his salary

After that, he can use any spare saving for travel, entertainment and other expenses. He should avoid taking a loan for a car or other major expenses, as the interest charges are high.

It is important to have regular saving now, when he has a job. In the future, jobs will be less certain. He may be retrenched or the company may close down. At that time, he will have to draw down on his savings.

The best way to invest the saving is in a flexible plan, such as a ILP (investment linked plan).

I hope that this advice is useful for other young people.

Repair new cars at distributor workshops?

Someone asked me, "Why can't NTUC Income discuss with the distributor workshop to repair new cars at their workshop and protect the warranty? "

My answer is:

- we are prepared to work with the distributor workshop
- we have approached them on many occasions in the past
- some are willing to agree with us on a price that is 150% of our quality workshop
- other distributors insist on their repair charges, ie 250% of our quality workshop.

We suspect that the distributors discriminate against us on their pricing. They are willing to give discounts to their tied up insurer, but not to us.

We suggest that the motorist register with us, and come to us after the first year. You can enjoy a 10% discount on our competitive premiums.

Insure your new car with NTUC Income

I encourage owner to insure their new cars with NTUC Income:

- you enjoy lower premium

- if your car is repaired at our quality workshop and your distributor void the warranty, we will take over the warranty.

You do not have to pay higher insurance premium or servicing charges, just to protect your warranty.

My advice: you can use the free warranty provided by the distributor for the initial period. After that, you can forget about the warranty. Many motorists tell me that any defects in the car is likely to be identified within the first few months.

If your distributor gives you an incentive to insure with their tied-up insurers, you can take the incentive for the first year. For the second year, you can come to NTUC Income.

If you register with us now, we will give you a discount of 10% on your insurance. You enjoy this 10% discount ON TOP of our competitive premium rates.

Call 6477 7722 or go to www.income.coop

48 million hits in June 2005

The various websites managed by NTUC Income has hit 48 million hits in June 2005. This is a 5 fold increase from 9 million hits 3 years ago.

The visits have increased signifcantly due to:

- launch of Big Trumpet
- revamp of our Income.coop website

We are probably one of the top 10 websites in Singapore - and this counts the large banks with internet banking and the internet service providers.

Visit:

www.bigtrumpet.com.sg
www.income.coop

For candidates who want to work in NTUC Income, visit our recruitment portal:

www.income.coop/careers

Happy National Day.

Singaporeans should learn to see "grey"

In my interaction with many Singaporeans, I find quite a common trait. They see things as "black" or "white". They cannot see things as "grey".

For an issue, they make judgement on what is "right", which is based on their personal opinion. They cannot see that there are many other choices that can also be "right".

They are not able to accept that some things are "not right", but they are also "not wrong".

There people are quite to jump to conclusions (without checking the view of the other person), to make judgement and to criticise other people. We see them reported as the "ugly Singaporean" when they travel overseas.

Here are some tips:

- recognise that there is "black", "white" or many shades of "grey"
- recognise that there can be several "right" choices - not only your own
- respect the views and opinions of others
- as you fight for your "rights", remember that other people also have "rights".

Happy National Day.

Cost to Video Record your home

Some owner want to install a camera at their home, and record the visitors into a DVR recorder. he following is available at Sim Lim Square:

a wireless camera (9V battery operated) + a receiver: $98
DVR with 80 GB HDD: $600.

The 2 equipments allow video recording of the entrance at your home. The hard disk allows rcording for up to one month.

National Day, 9 August 2005

We are celebrating the 40th anniversary of our Nation.

This year's National Day is a happier occasion:

- the economy is growing
- the stockmarket is robust
- jobs are now easier to find

We must look further ahead. Globalisation will continue to make a big impact on our way of life:

- business is getting very competitive.
- margins are being squeezed
- customers are more demanding

We need to innovate and change.

Here are some tips to ordinary people on how to cope with the challenging times:

- be frugal
- be modest
- have some savings

I wish you a happy National Day.

Visit 3 attractions for $10

Here ia a great way to spend a weekend with your family.

You can visit 3 attractions at only $10!

- Enjoy snowy cool fun activities at Snow City
- See the high-tech world of sports at Science Centre
- Experience the thrills of the giant screen at Omni-Theatre

The usual price is $28, so you save $18 per person.

This promotion is exclusive for policyholders of NTUC Income, and is available for a limited period only. Call 6788 8788.

Privacy?

Some working couples leave their maid at home alone during the day. They stand the risk that the maid may invite visitors into their home.

I suggested that they install a camera at home to record visitors. A few people argued that this shows a lack of trust of the maid or intrude into their privacy.

Here are the positive reasons:

- the camera record the main entrance to the home only
- there are many parts of the home that the maid can keep her privacy
- when we use an ATM machine or visit a shopping mall, we are being recorded

Trust is mutual. If the maid does not respect my right to protect my property, it is all right. I can look for another maid.

There are many ways to show kindness and respect to the maid. We can pay an adequate salary and give time off.

A new way to recruit employees

NTUC Income has adopted an innovative way to recruit new employees. It is producing encouraging results.

Earlier this year, we advertised in the major newspapers about the various types of jobs that will be available in 2005. They include insurance officers, marketing officers, customer service officers and professionals, such as accountants, actuaries, lawyers and others.

Interested applicants were invited to register in our recruitment portal. About 3,500 candidates responded and registered in the portal at www.income.coop/careers.

During the past 6 months, we have sent out the specifications of 50 jobs to suitable candidates, based on their area of interest and expected salary. These candidates are selected based on the details recorded in the database. On average, we invite about 50 candidates for each job.

The invited candidates are able to study the specification of the advertised job, and to respond, if they are interested. Based on their replies and preliminary assessment, we are usually able to shortlist about five candidates for an interview.

We have recruited 250 employees duirng the past 6 months, using this new approach. The quality of the candidate is as usually better than the traditional method.

Standing Arrangement on Policy Loan

LETTER TO BE SENT TO POLICYHOLDER OF NTUC INCOME

Dear Policyholder

POLICY XXXXXXX - LOAN BY TELEPHONE

You have taken a life insurance policy with us for more than 5 years. It has
accumulated a large cash value.

We wish to offer you an attractive arrangement:

- you can take a loan against this cash value by giving us a telephone call
- the loan will be credited to your bank account immediately
- interest will be charged at the prevailing rate, which is currently 5.5% per annum

To benefit from this arrangement, you have to open a "standing arrangement" with
us, as follows:

- you have to sign and return the attached agreement
- the fee of $50 is waived, if you sign up within 1 month of this letter.
- you do not pay any fee, apart from interest on any sum that is drawn down

For more information, call XXXXXXXXX

----------------------------------

WHY WE ENCOURAGE OUR POLICYHOLDER TO TAKE A LOAN?

We want to make it easy for our policyholders to take a loan from us.

Many are not aware, and they take a loan from credit card which carries 18% or 24% interest. Borrowing from loan sharks is higher. If they borrow from other insurers, they pay 6 to 8% interest.

If they take a loan from us, they save on the interest. It makes our insurance plans look much better.

Inexpensive to cover for Personal Accident

Recently, a cyclist crashed into a barrier in Tampines and may be paralysed for life. This unfortunate accident is a poignant reminder of the uncertainty of life. Besides the emotional trauma, the financial strain on his family can be quite considerable.

Accidents can happen anywhere, anytime. It is useful for people to have Personal Accident insurance. The payouts can help relieve the financial burden.

For as little as $6 a month, a person can receive up to $100,000 on permanent disability. This can tide over the immediate financial burden, as it will take time and cost to puruse a legal claim for compensation.

Our personal accident plan provide worldwide accident cover, 24 hours a day. It also covers natural perils and reservist training at no additional cost. You can aslo insure for payouts for temporary disablement and medical expenses.

Investment-linked product: choice of life cover

NTUC Income will offer 2 choice of cover for our Ideal plan (ie an investment linked product or ILP):

- level term
- decreasing term

Both covers will be paid by a level premium, which is lower than the premium under a traditional policy. The sum assured is payable in addition to the savings accumulated in the ILP plan.

For example, a policyholder who saves $2,000 a year may take a level term or decreasing term to cover $50,000 over 20 years.

Under level term, the sum of $50,000 is payable in addtion to the accumulated savings.

Under decreasing term, the sum is reduced by $2,500 each year, and is payable in addition to the accumulated savings.

The cost of the term insurance cover is quite modest. To find out more, visit our office in Bras Basah Road. You can also attend our educational seminar.

Call 6788 3366.

19 people gave their "wish for Singapore"

A colleague posted an article "I wish for Singapore..". 19 persons responded. Some posted more than 1 wish.

Consideration, less kiasu, more helpful - 6 wishes
More prosperous, more gracious, patience, happiness - 6 wishes
Terrorism-free - 4 wishes
Cooler weather, 4 seasons - 4 wishes
$250 per month for elderly people - 3 wishes
Self sufficiency in water and a hinterland - 1 wish
More green concious - 1 wish

Make a third party claim against NTUC Income

Here are the questins posed by a third party claimant, and reply given by me.

Question:
Friends from the industry have told me, that insurers make it difficult for people who are claiming against it for motor insurance policies. I just got my car banged by someone and Income (who insured the other party) have been refusing to coorporate with my workshop for the third-party claim, despite my workshop sending in pictures, to get it expedited.

I'm told that this delaying tactic is common practice for Income when a workshop or insurance company wants to claim against it, and now I've experienced it first hand.

Reply:
We have found, over the years, that the workshop likes to submit an inflated bill for motor repairs. If they can repair a car for $X for their customer, they will charge 2 times of $X for an insurance company, especially for a third party claim. The distributor's workshop (ie the distributor who sell the car) will charge even more.

Negotiation over the price of repair is the main cause of delay. We like to settle the claim early, but at a reasonable price.

We have advised third party claimants to report their claim to our Idac center immediately after the accident. This allows us to assess the damages and estimate a fair repair cost. As we handle many repairs each day, we are able to get a repair cost that is fair and acceptable to the repair workshop.

If your workshop cannot accept our price, and many other workshop find the price to be reasonable, then your workshop is trying to profiteer on the repair.

If you choose to bypass our request, and you go to your own workshop, and they send us an "inflated bill", what do you expect us to do? Do not blame us for making things difficult. I think that you and your workshop have to be fair to us as well.

If you wish to form a fair opinion about our claim process, I invite you to visit our office. You can look at the number of repairs that are done by us, and the customer satisfaction rate, including the satisfaction for third party claims submitted through our Idac procedure.

Question:
Sure, I know of workshops that charge inflated rates. But why can't the victim of an accident go to his own workshop? How can it be that I have to go patronise Income's workshops?

Reply:
If your workshop is willing to charge a reasonable price, we agree to let the repair be done at your workshop. But, we have to agree on the price first.

There are many workshop that can repair the vehicle, using new parts (for a new car) and provide an acceptable standard of repair, for a reasonable price. This should be the "benchmark" price.

Question:
If you were involved in an accident, would you send in your Mercedes to just any workshop that the third party insurer assigns you to? Obviously not, because it's of no fault of yours that workshops are inflating prices and that your vehicle is banged into by someone else.

Reply:
My honest answer is "yes". I will let my insurer handle the repair, provided that they undertake to ensure that the repair is of an acceptable standard. They are many workshops that can do an acceptable level of work at a fair price. Over the past years, I have a two accidents (also caused by other parties) and have been happy to let my vehicle be repaired at the quality workshop under NTUC Income.

Question:
While insurance firms hagger over costs, they often forget that their customers are already stressed out with an accident, struggling to repair things and move on.

Reply:
Our policyholders are happy to let us arrange the repair. Based on our post repair survey, over 95% of our policyholders have expressed satisfaction at the quality of repair and customer service.

If the third party claimant is willing to follow this procedure, I am sure that they will find it to be stress free.

Question:
People buy insurance so that when the unexpected happens, we have something to fall back on. Claimants do not profiteer from the process. We expect insurance firms to help us, not prolong the uncertainty of a claim.

Reply:
The correct procedure is for you to claim against your own insurer and let them claim from NTUC Income. It is their duty to provide this customer service to you, as you are their customer. If you are not at fault, they should allow you to keep the No Claim Discount.

By making your claim direct against us, you are not being fair to us, because you do not follow our process and insist on your right to make the claim in your own way. We also have our right to protect our interest.

Question:
If others in the industry try to profiteer, it cannot be that the insured is asked to pay the price. My car only rolled out four months ago. It's only fair that I go back to the distributor for the original parts - I'm sure you know there are not many workshops that have the parts to fix my vehicle.

Reply:
I believe that our quality workshop is able to repair your car to a satisfactory standard. If they are not able to, we will certainly use your distributor.

Question:
Is it against "correct procedure" to claim against a third party? Sure, I can claim against my insuer first. But I will fight my case because I am confident of it.

Reply:
I understand your wish to insist on your right. Do be considerate of the right of the other party as well.

We handle 50 repairs of our policyholders on the "tender system". It works quite well - even from the customer perspective. If you do not trust this system, we accept your point of view.

Work Life Balance - more than Flexi Work

Editor
Forum Page
Straits Times

I refer to the letter 'Work-life balance? If only flexi-work is okay' by Ms Lynn Chong Fui Lian (ST, July 22).

I agree with Ms Lynn that more local companies should embrace flexi-work arrangements. Family friendly programmes at the workplace helps staff strike a balance between family obligations and work. Such practices contribute to a high satisfaction rate among staff and a motivated workforce.

Some of NTUC Income's practices:

a) Staff with children below 12 years old can apply for part-time work. This encourages the working mothers to remain with us. They can choose to work half day or alternate full days. Those who are not able to make suitable arrangements for childcare can opt to work from home. They agree with their supervisor on the scope of work, level of productivity and quality standards.

b) Staff can apply for up to two years of no-pay leave to take care of their families.

c) Currently, staff receive one month of paid leave every three years. They enjoy this leave in addition to the normal annual leave. This special leave allows them to spend time with their families, learn a special skill or go on an extended overseas vacation.

d) Staff can select their starting time of work from 7 am to 10 am to suit their family commitments.

To minimise work disruption, NTUC Income has a pool of temporary employees who are trained and deployed when necessary to handle routine functions while an experienced employee handles the complicated ones.

The experience has been positive. Employees like the flexible work arrangements. The organisation enjoys high staff retention and achieves good business results.

NTUC Income has constantly received the 'Family Friendly Employer Award' in recognition of its positive actions in helping employees achieve work-life harmony.

Patricia Ng
Senior Manager, Human Resource
NTUC Income

Principle of insurance - share the loss

A policyholder wrote to ask my advise about a dread disease plan for his other who is 55 years old. He said that the premium is high. Term insurance is cheaper, but he will "lose money" on the insurance.

My advice to him is:

- the dread disease plan is not essential for your mother. If she falls ill, the hospital bill can be met by the hospital insurance (which she is already covered)

- if the premium is a burden on your cash flow, you can probably use it better elsewhere, e.g. to save for your own retirement needs.

You should not refer to "losing money" when you buy insurance. You are paying for the cost of insurance, and not "losing money".

Similarly, when we pay a premium to insure our vehicle or home, we are paying for the cost of insuring the risk. In fact, we are happy that we do not make any claim.

The premium that we pay is "not lost". It is used to pay the claim suffered by other people who meet with an accident or loss. We are helping other people.

If we suffer the loss, other people are helping us. This is the principle of insurance - to share the loss.

A hospital plan that pays without limits

A insurer has introduced a hospital plan that pays the bills "as charged". It does not impose any limit on the amount that can be claimed for each day of hospital stay or on the surgery fees.

This plan is likely to lead to an escalation in hospital bills. The private hospital and doctors will increase the charges to the patient who is covered under this plan, as the insurer has deep pockets.

This will lead to an increase in premium rates for the "as charged" plan. Experience in other countries have shown that this type of plan has the highest escalation in premiums.

If you are interested in the "as charged" plan, you should look at the premium rates. It is around $6,000 a year, at the older ages. This is the premium rate today. In 20 years time, it can be many times higher, due to escalation in medical expenses.

Can you afford this premium, when you grow old? Do you need to have money left for other living expenses?

You need to have an affordable plan that can cover you for a lifetime. Choose a plan that provides adequate coverage at an affordable premium.

Produce More Babies

Many countries face an declining and aging population. People are getting married later, and producing fewer children. Singapore face worse than many countries.

The root cause is the desire of women to compete with men in the working world. Many give priority to a university degree and a steady career. By the time that they are ready to get married and start a family, they are in their late 20s or early 30s. This is past their most productive years.

To change this trend requires a new approach by the government. The state should be willing to bear a larger part of the cost of raising children, and reduce the burden on the individual family.

I propose that each non-working mother should be given an adequate monthly allowance for each child, up to a maximum of three children in the family. The amount should be adequate to meet 80% of the cost of raising the child, and can be paid until the child is 18 years old. I think that a suitable sum is $500 per child.

This will encourage more women to choose to stop work and to raise a family. The women may marry at a younger age and produce a family with 2 or 3 children. The family will not need to depend on foreign maids.

This family payment will be an added cost to the state, and will have to be met with higher taxation. I think that the people who choose not to have children should share in the national cost of producing our next generation.

Many countries already have generous family allowances, of the type proposed by me. They have problems in implementing the benefits, which can be abused. I am sure that we can find a way to prevent the abuse, and focus on the positive aspect of this proposal.

Is ILP suitable for older people?

Editor
Forum Page
Straits Times

I refer to the letter from Ms Seah Geok Hong entitled "Time Life Insurance Association spoke up" (Straits Times, 19 July). Ms Seah asked the Life Insurance Association to substantiate its claim that regular premium investment plan are suitable for older people.

I like to speak for NTUC Income and address the underlying question.

Compared to a traditional life insurance plan, an investment-linked plan (ILP) has the following advantages:

- flexibility in making regular and adhoc savings, including temporary suspension,
- choice of investment funds,
- flexibility in types and amounts of insurance coverage,
- transparency in the mortality, expense and other charges.

In choosing between different ILP plans available in the market, the consumer should look at the charges and also the investment risks in the various funds.

Older people pay a higher mortality charge for their insurance protection. However, the amount of insurance needed at the older age should reduce, as the children are older and the policyholder has probably already accumulated sufficient savings.

One way to reduce the charge is to deduct the accumulated savings from the initial amount of insurance. The premium will reduce with the lower insured amount. The policyholder also has the flexibility to terminate the insurance coverage on their retirement.

A flexible ILP plan is more suitable for today's uncertain job environment.

The policyholder will need to be properly advised on how to tailor this plan to meet their needs. NTUC Income offers free financial counselling to our policyholders using salaried insurance consultants. We will extend this free service on a limited scale to the general public.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Buy Term and Invest the Difference

"Buy Term" refers to term insurance, which is an insurance contract payable on death. The cost of term insurance is very low, as the chance of making a claim is usually less than 1%. To insure a sum of $100,000, you need to pay $500 or less, depending on your age.

Some people pay more than $5,000 on a life insurance plan to insure $100,000. This is a traditional plan that provides insurance cover and savings. When the policy is terminated at a future date, there is a cash value that is refunded. It represents a portion of the premium, accumulated with interest.

Under the "Invest the Difference" concept, the balance of the savings is invested separately. Usually, it will give a much higher return.

Insurance agents like to sell the traditional plan because they can earn a high rate of commission (up to 100%) of the annual premium, including the saving portion.

If you "buy term" separately, you only pay commission to the agent on the term insurance premium. You save commision on the saving portion.

How much to save for the future?

Someone asked for my advice: how much of my earnings should I save for the future?

My advice - you should save 10 to 15 percent of your earnings. They are for the following:

- in case you lose your job
- for unexpected medical and other expenses
- to supplement your savings for retirement

Many people think that they do not earn enough to meet their living expenses. This is not correct. If they look at how people who earn less cope with their budget, they will find that it is possible to set aside the savings.

They can cut down expenses on buying a car, or they can buy a smaller flat, or spend less on holiday or children's tuition.

It is a matter of priority.

Make some savings. Take care of your future first. Then, you can take care of others.

Third Party submit an inflated claim

Editor
The New Paper

I refer to the letter 'Premium rose after minor accident' (TNP, 13 July) by Ms Janet Chua Yah Choo.

Ms Chua said that she was involved in a minor accident recently. The damage on the third party's vehicle was small but the claim was quite substantial. As a result, she had to pay a premium loading and had her no-claim discount reduced by her insurer during the policy renewal.

Ms Chua is not insured by NTUC Income. As this is a common situation, we wish to share our current practice in dealing with this type of claim, so as to protect the interest of our policyholder.

When we receive a third party claim, we write to our policyholder with the details of the claim. We ask our policyholder to give us his feedback on the claim. If the claim is inflated, we will get a statement from our policyholder to reject or contest the third party claim. If the unjustified claim is not withdrawn, we will take legal action against the motorist who has authorised the workshop to file the claim.

If we are able to reject the claim, we will allow our policyholder to retain the No Claim Discount.

If a third party wish to make a claim against our policyholder, they are advised to go to an Idac center within 24 hours of the accident. We will assess the damages and make an offer to settle the claim expeditiously. We will also offer a cash settlement and allow the third party to find their own repair workshop.

Freddy Neo,
Senior Claims Manager,
NTUC Income

Boot licker?

Someone posted a positive comment about me, but preferred to remain anonymous. He was afraid of being accused of boot licking.

I have a way to overcome this fear.

I like to find positive things to say about other people. I am just being decent and encouraging. I am not boot licking.

We need to promote a climate of positiveness. We have to find positive things to say about other people. We have to create an optimistic climate.

I encourate other people to think positive, and be positive.

Ideal plan - best plan for an uncertain world

I wish to recommend the Ideal plan from NTUC Income as the best plan for an uncertain world.

It allows you to make regular savings when you are employed. You can top up with adhoc savings, out of your annual bonus or occasional income.

If you have a cash flow problem, you can stop your savings for a short period. There is no penalty.

Your savings can be invested in the Combined Fund from NTUC Income. It is a large, well diversified fund, have $3,500 million of assets, and is managed by 9 top fund managers.

I expect the fund to earn an average of 6% per annum over 10 years or longer, but this is not guaranteed. As it is a large and well diversified fund, the risk is reduced. A few bad investments will not affect the long term return of the fund.

Here are two additional advantage:

- you can buy insurance protection in a separate policy and pay a separate premium
- 100% of your savings is invested from the first month
- our charges are probably the lowest

To know more about this plan, you should attend our educational seminar that is held every two weeks. Call 6788 6636. Website: www.income.coop

How much does the CEO of NTUC Income earns?

Someone posted in my blog - how much does the CEO of NTUC Income earns. He wants to know about this information, following the media report on the court case by the CEO of the National Kidney Foundation.

I will give a reply on my salary at a suitable forum in the future. Maybe, this can be a question to be raised at the annual general meeting of NTUC Income. The chairman of my board of directors can address it.

I will give a hint. I earn less than 50% of CEOs of large listed companies that are reported regularly in the newspapers.

I wish to state the following:

- I fly by economy class, including long distance travel
- I drive a 8 year old Mercedes E200 and will keep it for a few more years.

I am quite frugal in spending money for NTUC Income, including paying for computer systems and management consultants. This helps us to keep our expense ratio low, and reduce the premium rates payable by our policyholders.

Yob Culture in the UK

I read that some teanagers in the UK behaved badly. It is called yob culture. "yob" is the opposite of "boy" and refers to a hooligan.

The source of this problem appears to be single parents and lack of parental supervision. The correct values are not taught to the children.

Tony Blair, prime minister of the UK, is worried about the culture of "lack of respect" and "freedom without responsibility". He is trying to promote the value of respect.

The problem is so bad, that they have to pass a law on "anti-social behaviour". I am worried that some of these behaviour are happening in Singapore.

What does a CEO do?

A CEO is:

Chief Executive Officer - everybody knows that.

However, I have to play the following additional roles:

Chief Explanation Officer - when I write in my blog or send my reply to letters in the newspaper.

Chief Excuse Officer - when I have to explain mistakes made by my colleagues, and pacify my customers

Chief Education Officer - when I conduct public seminars on insurance matters.

and finally

Chief Entertainment Officer - when I have to boost the morale of my colleagues, in facing competition and demanding customers.

It is FUN.

Advantages of Late Marriage

A frequent reader of my blog suggest that I should post views from other people of the advantages of late marriage.

If you have this view, you can send them to me. Keep it short. I will post it to create the diversity of views.

I expect that most people already hold this view, which is why marriages are getting later, or may not happen at all. This is why I have to give special attention to those who prefer early marriages.

A lady's view on Early Marriage

FROM A LADY COLLEAGUE

I wish to give my views on the pros and cons of getting married early.

I have read your blog and agree that getting married early does have its advantages. I married at the age of 23, gave birth at 25, completed my Masters in Business (Accounting) at 27, gave birth to my second one last year at 31.

Pros:
Able to start family earlier therefore able to plan for retirement better as the age whereby children reach university level does not coincide with retirement age.
After we settle down, time to concentrate on career.

Cons:
Friends and colleagues about the same age are able to enjoy themselves without the commitment as being married, we are tied down. Getting married earlier, financially not strong. Buying house is deferred.

On the whole, I still encourage people to get married early. I have been the envy of many people as my elder son is already in Primary 1. While other people about my age just gave birth to their first child or still have not given birth, I already have my second child.

Getting married and starting family early is like tasting bitter first and then tasting the sweetness at the end of the life journey.

Car Navigation System - now available for older cars

You may have seen this system in expensive new cars in Singapore or overseas.

The car naviation is now available for installation into older cars. I have recently installed the system in my 8 year old car, at a cost of $2,000.

The system is useful. It plans my route and has a voice system to alert me to make the correct turns. I use the system even if I am travelling on familiar roads, as it reminds me (in case my thought strays).

We plan to install this system on the shared cars that is being operated by our car coop. If you are interested, you can try the system on our coop ars.

We will make the shared cars available for people to drive into Malaysia. The navigation system now has the maps of Johore Bahru. It will be extended towards the whole of Malaysia towards the end of this year.

Reply to: Beware pitfalls of reverse mortgage

Editor
Forum Page
Staits Times

I refer to the letter from Mr Chong Kiam Khiun entitled 'Beware pitfalls of reverse mortgage' (ST, 24 Jul).

NTUC Income offers a reverse mortgage to assist a retiree to receive a monthly income to meet the living expense. The monthly income is taken as a loan charged against a private property and accumulates interest at a modest rate.

The loan is usually repaid at a future date when the retiree sells the property and find another place to live. Alternatively, on death of the retiree, the property is sold to repay the loan and the balance of the proceeds is returned to the estate.

To prevent any misunderstanding on the terms of the loan, we have taken the following measures over the years:

- We explain the working of the reverse mortgage to the retiree
- We ask a family member to acknowledge the retiree's acceptance of the agreement.
- The retiree and a family member have to attend the lawyer's office to execute the agreement

We also send an annual statement to the retiree. Details of the accumulated loan and other particulars, including the prevailing interest rate, are shown in the statement.

In the case quoted by Mr Cheong, the reverse mortgage was taken in 1997. At that time, the agreement was signed in the presence of another family member. Unfortunately, due to the drop in the price of the pledged property, the outstanding loan has reached the 80% level faster than anticipated. The retiree and family member are now discussing with us on the best arrangement to repay the loan. As there is still a buffer of 20%, we have sufficient time over the next two years to work out the best alternative.

The reverse mortgage has been helpful to many people. However, as this example shows, there is a need for the retiree to understand the terms and to make the appropriate adjustment to meet changing circumstances.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Reply to "Exercise caution when buying ILPs: Income chief "

Editor
Forum Page
Straits Times

I refer to the article entitled "Exercise caution when buying ILPs: Income chief " (Straits Times, 23 June 2005).

Your correspondent has quoted me correctly on most parts of the article. However, I have been quoted out of context on the following point:

Mr Tan suggested that term insurance without any investment component may be a better option. 'Buy term and invest the difference so that you can avoid paying the commission payable to agents' he said.

I wish to clarify that the insurance adviser receives a commission on the premium paid under the term insurance policy.

In my view, the adviser should also be paid to advise the policyholder on insurance and financial planning. This is a valuable service that should be adequately remunerated. The adviser has to spend considerable time to acquire the knoweldge to provide this advice.

Under the new ILP plan that will soon be launched by NTUC Income, we will pay a modest flat fee to the insurance adviser, which will be recovered from a small charge over the next 20 years.

The adviser will also earn a modest rate of commision on the regular savings in the ILP plan. As the charges are low, this plan will allow the savings to earn a fairly good rate of return over the long term.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Video record your home

Some families leave the maid alone at home. There is the risk that the maid can bring in strangers to the home.

Here is a simple way to take care of this problem. Install a camera with a DVD recorder. Record the view of the entrance throughout the day.

When you return home, you can use 32X speed to view the happenings in your home. This can be done in 15 minutes. Any visitor can be spotted easily.

You do not need to do this all the time. If the maid is aware about the recording, the maid will not take the risk. It will be a useful deterent.

When silence is the norm, but helps no one

I refer to your news comment by Adrian Tan in Today paper of 14 June, entitled "When silence is the norm, but helps no one".

Adrian Tan referred to recent cases involving a few listed companies that are being investigated by the Commercial Affairs Department. The managers and investigators remained silent about what was happening. The investors were caught holding the shares, and did not know what to do with them.

Adrian Tan suggested that a panel of wise people be formed to help decide on what information could be displosed to the investing public.

I strongly support this suggestion. The panel can help to clear the following uncertainty:

- Who should decide? Yes, the panel.

- How to decide when things are uncertain? The decision is made through discussion, judgement and by majority of the panel.

We have to accept that many issues are not clear cut, and some decision has to be taken. We cannot wait until things are certain. We cannot procrastinate.

In America, many issues involving the public are debated over television. This is a healthy process in dealing with diverse views. I hope to see this done more actively in Singapore.

Keep the serial number of your mobilephone

Before anyone loses his/her mobile phone, one should first check the serial number of the phone by keying in *#06# where a 15-digit number will appear on the screen.

Please record it down and keep it for reference. In case the phone is lost, the rightful owner can call the service provider (Singtel, M1, Starhub, etc) to disable the phone by providing the serial number.

That means, the person who took the phone cannot use it at all even if they insert a new SIM card. If everyone knows this procedure, there would not be much use Taking away someone's phone. Please feel free to circulate this message.

Give the foreign made a day off

Some employers do not give their foreign maid a day off for fear that the maid may engage in promiscuous activity or mix with bad company and may esult in pregnancy or running away from home. This may result in the $5,000 bond being confiscated by the Ministry of Manpower.

The risk is quite small. If the maid gets pregnant, it will be discovered in the medical checkup. The employer can arrange to send the worker home.

Promote Car Pooling

In the United Kingdom, the authority found that there are too many cars on their motorways. They are implementing a system of car-sharing.

We have a similar situation in Singapore. When I attend a social function, eg wedding dinner, I usually find most people come alone in their cars. The car parks are full.

We should encourage people to car-pool. The guests can contact each other, and come in one car.

We tried to introduce an internet-based car pooling system previously. It did not work.

I like to try again. This time, we will use our call center. If anyone wants to car pool, they contact our call center (special number) and indicate their function. The call center should be able to locate another person who is attending the same function and get them to contact each other.

Let us give it a try.

Get Married Earlier

I have been encouraging our ladies to get married earlier, before they embark on a career. Most people disagree with me.

I was surprised to hear this story of someone who had actualy done so. Here is her story.

-------------------------------------------------

I MARRIED DURING UNIVERSITY

Marriage for the Singaporeans' ladies seems to be a secondary priority and late marriages and childbearing is most common in Singapore and many developed countries especially for the educated women.

I tend to differ. I believe that early marriage and child birth provides more benefits though the early years are are tougher with lesser income and stronger need for career building.

I married in my third year of University, and gave birth at the age of 24 and 26 years old. This is most rare as most of my friends only got married at the age of 30.

The decision was to settle early and have an "early" retirement from motherhood. Starting early mean that at the age of 40, the prime of my career and life, my 2 children are already teenager and babysitting is no longer required.

Furthermore, youth provides me with more energy to nurture and play with my children.

YO

It is stealing

A sushi restaurant installed a system to charge a customer based on the sushi plate that is taken off the conveyor belt. This is captured through a RFID device placed on the plate.

A group of students discuss how to prevent customer from "beating the system" by taking the sushi from the plate, and leaving the plate on the conveyor belt. The system will not be able to detect that the sushi has been removed.

The solution is simple. Put up a sign that say, "Removing the sushi from the plate is considered as stealing".

We should know the difference between stealing and "beating the system".

Visit Batam for Tranquility

I attended a retreat at Batam View.

On my return, I waited at the ferry terminal. It was slow pace, tranquil and peaceful.

I enjoy the cool breeze, and the rustling of the leaves on the trees. A few people were at the terminal, including the employees and shop attendants. It was a calm.

I will like to visit again, especially during the weekdays, when there is no crowd.

Financial Tips - do not roll over your credit card

Excessive spending on credit is the No 1 cause of bankrupcy in Singapore.

4 in 5 young people roll over their credits monthly, and pay interest of up to 24% per year. If late payment and other charges are added, they may be paying up to 30%.
For a credit of $5,000, the charges can be as high as $1,500.

There is a better way. Take a loan from the cash value of your policy, and pay interest at only 5.5% per year. You can save up to $1,200 on a credit of $5,000.

Call 6788 1122

Lower Charge on our Investment Plan

The Straits Times printed a table to show the allocation on investment linked plans offered by various life insurers.

In the case of NTUC Income, our allocation is 85% for the first 3 years, and 100% thereafter. This means that the total charge is 45%. If you invest $1,200 per year, your total charge is $540. This goes to pay the insurance adviser and covers the expenses of issuing the policy.

Some other insurers have total charge of 100% to 150% of the premium. For an annual premium of $1,200, the charge is $1,200 to $1,800. This is much higher than NTUC Income.

Another difference is the spread on the investment. In NTUC Income's case, the spread is 3.5%. For most other insurers, the spread is 5%. A lower spread means that a larger proportion of the premium is invested.

In brief, the charges imposed by NTUC Income are quite modest. They are more than offset by the higher return earned from investing in our Combined Fund.

Motorist prefer to insure direct

Some motorists prefer to insure directly with NTUC Income at our branches, instead of going through an agent.

We give them a loyalty discount of 5% on the premium. They enjoy this discount on renewal as well. Based on an average premium of $800, they can save $40 by coming direct.

However, many motorists prefer to go through an agent or adviser who can provide advice on the most competitive rate and handle the insurance and road tax renewal for them.

Cash Settlement having a slow start

We started to offer cash settlement for motor repairs at three Idac centers from 16 May.

It made a slow start with 2 cases for the first day, but activity is picking up. We are now handling 5 cases a day.

We will be taking a weekly advertisement to remind motorists about this option.

Casinos in Batam closed down since January

The casinos in Batam has closed down for the past few months, since January 2005. It is probably due to enforcement action taken by the central government in Jakarta. It seemed that the casinos were operating illegally.

With the closure of the casino, several thousand workers in Batam have lost their jobs. Batam was relatively quiet. Few people used the ferries, or visited the island.

The hotel manager in Batam told me that he expects the casino to re-open later in the year, after the Batam and central government has sorted out their jurisdication.

How to get out of the "time bomb" in your ILP plan

Question:

I bought an investment-linked product from another insurance company (not NTUC Income). It has increasing charges for my life insurance cover. How do I get out of this "time bomb" ?

Reply:

Ask your insurer to give you the coverage and premium that you have to pay for the current and the next few years.

You can compare them with the cost of similar coverage under the Family Insurance Policy offered by NTUC Income.

If our cost is lower (which is likely to be the case), you can ask your current insurer to terminate the insurance coverage. Ask them to state if they have imposed any penalty for this termination. You can continue with the investment with your current ILP plan.

I think that some insurers charge high premium rates for the coverage under their ILP plan.

Direct settlement of injury claims

Editor
Forum Page
Straits Times

I refer to your article entitled "Case questions cost-saving tactics"
(Straits Times, May 4, 2005)

You reported a comment from a lawyer, Manoj Raj as follows, "Well before we
begin any proceedings, they call my clients and tell them they have no case."

Mr Roy's statement is not correct.

Here is what actually happens. We approach the injured persons and encourage them to make their claims directly with us. This will allow us to make immediate payment to cover their medical expense and loss of earnings. The compensation for permanent injury will be determined at a later date, when the extent of the injury is determined.

Our action is explained in a practice note which is given to the claimant.

Where our policyholder is liable for the accident, which applies to 80% of these cases, our officer will encourage and assist the injured person to make a direct claim. For the remaining cases, our officer will advice the injured person to claim against the actual party at fault. However, if the injured person wish to make a claim against us, they can still do so.

Our aim is to be pro-active in giving prompt and fair compensation to the injured person and to reduce legal expenses.

Tan Kin Lian
Chief Executive Officer
NTUC Income

New or re-conditioned parts?

Editor
Forum Page
Straits Times

I refer to the article in St Times May 2, 2005.

It reported that Mr Abdul Masood was unhappy that the repair to his 7 year old van was done using second-hand parts.

I wish to inform the public that insurers generally practice the following guidelines on the repair of vehciles. This is posted at the website for General Insurance Assocation and stated in the consumer guide that is made available to the public:

quote:
The aim of most policies is to have your vehicle restored to a condition similar to the one it was in before the accident. Based on this principle, for a relatively new vehicle, damaged items will usually be replaced with new parts, which are either genuine or OEM (original equipment manufacturer) parts.

However, for vehicles more than three years old the insurer might opt to use good-quality reconditioned parts. Such parts are carefully checked to ensure they do not compromise the safety or roadworthiness of the vehicle. A six-month warranty for repairs is usually provided by the workshop.
unquote

I wish to state that the practice adopted by NTUC Income conforms with the market practice. Our aim is to give the appropriate repair at a reasonable cost, so that motor insurance premiums can be kept low.

Tan Kin Lian
Chief Executive Officer

Work-life Balance

Editor
Today Paper

I refer to Ms Lena Soh Kwee Kim's letter "Work-life balance: Bosses too have part to play" (ST, May 3).

Ms Soh asked bosses to be flexible in giving concessions to all employees to help them deal with stress, work and family demands. I agree with this view.

I wish to share some of our practices in NTUC Income.

We believe that a competent and happy employee is able to give better service to our customers. We encourage our employees to achieve a balanced work-life and a healthy lifestyle. This is done without sacrificing our competitive edge or increasing business costs.

Our employees enjoy the following schemes:

- flexible working hours
- part-time work
- telework, working from home

Our flexible working hours is most popular. Our employees can choose to start work at any time between 7.30 to 9.30 a.m. and to work 8 hours during the day.

About 300 employees, or 25% of the workforce, have opted for a different starting time, according to their individual need.

Last year, we introduced a one month paid leave for an employee who has completed
three years of service. This benefit cost 3% of payroll but is offset by the savings of 3% in employer CPF contribution.

Our employees enjoyed this benefit, as they can spend time with their family and friends, learn a special skill, or take an extended overseas vacation.

Our human resource practices have made a positive impact on our employees, leading to a high satisfaction score and a low turnover rate for our employees.

In our regular survey, our employees voted the work-life balance to be a strong
positive factor in our work environment.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Lower premium for female motorists

From 1 July 2005, female motorists insured with NTUC Income will enjoy a 6% reduction in premium rates.

Based on our past year's claim experience, female drivers have lower average claim cost.

The lower claim cost reflect that females are involved in less serious accidents and have lower repair cost. Perhaps they also use their cars less often, due to their indoor occupation.

NTUC Income has the largest market share of motor insurance, representing about 43% of all vehicles in Singapore. Our dominant share is attributed to our competitive premium rates and satisfactory quality of service.

Cash settlement for minor accidents

NTUC Income is implementing cash settlement for minor accidents from 16 May 2005:

- On-the-Spot Cash Settlement.
- Get the repair done at your workshop and keep the difference
- Within 7 days, you can return the cheque and ask us to repair the vehicle.

Our cash settlement centres are open Monday to Friday, 9am to 6pm at:

- STAC Sin Ming Road, 302 Sin Ming Rd, S'pore 575627
- STAC Portsdown, 5 Portsdown Rd, S'pore 139296
- NACS Paya Ubi, 51 Ubi Ave 1 #01-25, Paya Ubi Industrial Park

Hotline: 6788 6616.

Get your daily news about your neighbourhood

NTUC Income is launching eNN, an electronic newsletter for each constituency in Singapore, from 1 May 2005.

The aim of producing eNN is:

- to promote an awareness and interest of happenings in the neighbourhood
- to promote social cohesion
- to create a target of 500 new jobs when all the constituences are operational

The newsletter will be sent to residents who registerd at the website:
www.enn.com.sg.

This is intended for local news. It covers local events that happened in the constituency, such as the events organised by the community center, school, town center, library and others. These news are usually not covered in the national newspapers due to lack of space.

It will also carry advertisements from the local shops and service providers. The shops can advertise their special offers and interesting products. Service providers can advertise their services, such as tuition, child care, baby sitting, elderly care, car wash, home repair, computer repair, etc.

To register: www.enn.com.sg

Tan Kin Lian
CEO, NTUC Income

Coping with a business downturn

Someone ask me, "how is business"? I replied, "Business is down. But it is good".

Why?

When business is down, everyone should work less, earn less and spend more time with the family or pursue a hobby.

We should not expect business to be always good, and to work hard all the time. We need to take a break.

I want to encourage people to be on a "holiday resort" mentality.

During peak season, they work very hard. During the off-peak season, only a few shops are open for business. The other people take the time off to do something else.

They manage their earnings to survive on their earnings during the peak season.

Similarly, people who work in other industries should have a lifestyle based on 70% of their regular earnings. They should set aside the 30% as savings for the rainy day.

If they wish to change or lose their job, they can draw on their savings. They will not face any financial hardship.

I also encourage employers to adopt a more humane approach. When business is down, reduce the salary of all workers proportionately, with proportionate time off. Do not retrech the workers, unless they are able to find alterantive jobs elsewhere. Let the sacrifice be shared equally.

Survey: Integrated Resorts

The Singapore government recently announced the development of two integrated resorts with casinos at Marina Bay and Sentosa. We carried out a survey with 100 people representing a cross section of Singapore.

1. The two resorts will attract more tourists to Singapore and boost our tourism industry. Agree: 92%

2. The two resorts will turn Singapore into a vibrant hub in Asia, ahead of its regional competitors. Agree: 79%

3. I support the development of two resorts, as they serve different needs and will complement each other. Agree: 70%

4. I have confidence in the government to minimise potential social harms brought about by the casinos. Agree: 68%

5. The economic advantages brought by the casino resorts will outweigh the social harms. Agree: 68%

6. Social harms brought by the casinos will be minimal, as they constitute only a minor part of the resorts. Agree: 49%

7. The high entrance fee and ban on credit will protect Singaporeans against the ills of casino gambling. Agree: 39%

8. Are you in favour for casino development in Singapore? Yes: 71%

Period of Survey: 21 - 27 Apr 2005

How to join NTUC Income

NTUC Income has an innovative way to recruit people.

We ask them to register in our recruitment portal, www.income.coop/careers/ and tell us the jobs that they are interested in.

When we have a vacancy, we will contact them to submit an application. This will reduce the time taken to recruit a person, and also ensure that our advertisement is not overlooked by those who are really keen to join us.

We now have 2,000 people who have registered and told us about the jobs that they like. We carry out preliminary screening of these candidates, and will be able to offer them a suitable job as soon as it becomes available.

www.income.coop/careers/

Reduce tax on "green cars"

A friend told me that environmentally friendly "green cars" are more fuel efficient. There is a potential saving of 25% on fuel.

With high prices, we should encourage "green cars" on our roads.

However, there is an obstacle. Due to our tax system, "green cars" cost about $20,000 more than the conventional cars.

With an average monthly consumption of $200 in petrol, the monthly saving is only $50. It will take 30 years to recover the additional cost of the green car.

In the USA, green cars cost about S$5000 more than conventional cars. It will take less than 10 years to recover the investment.

I suggest that our tax system in Sigapore should be reviewed and a lower tax burden be placed on "green cars". This will encourage more people to use "green cars" and save on petrol.

Silence not golden for shareholders

Today (18 April) has this headline: "Silence not golden for shareholders".

It says, "As the Commercial Affairs Department investigates corporate wrongdoing, silence prevails, leaving investors in the cold".

The CAD is investing Accord Customer Care Service and Citiraya. In both cases, shareholders have not been informed about the nature of the investigations. The uncertainty has dragged on for several weeks. It is not clear whether the company or CAD should be releasing updates.

My friend told me that, in the USA, they have a faster way to resolve these issues. Action is taken quickly, and the issue is settled within a short time. In some cases, the CEO gets replaced quite quickly. In other cases, the matter is settled.

I hope that the authority in Singapore can find a way to resolve these issues more promptly.

Vehicle Navigation System

I installed a Vehicle Navigation system in my car. It cost about S$1,500.

It works well. The system allows me to set the destination. It guides me along the way. It shows the roads to take and when to turn. It is easy to use and quite reliable.

I will look for a way to help to introduce this system more widely in Singapore. I may buy a few units and offer it as a lucky draw prize for owners who insure their vehicle with us. I may offer a discounted price for our motorists.

Abusive customers

In recent years, an increasing proportion of customers are getting to be impatient, rude, abusive, demanding and unreasonable. Some employees do not want to work in the frontline to face customers.

This situation appears to happen in other countries as well. Recently, I was in Healthrow Airport. I saw a sign at the Information Desk. It goes along this line:

"Our customer service officers will do their best to serve you. Please do not abuse them. It is our duty to protect our employees. We will take legal action against any customer who harrass our employees".