Saturday, August 19, 2006

Reduced annual charges

NTUC Income is reducing its annual charges for the following funds from 1 July 2006:

New Charges Old Charges
Singapore Equity 0.65% 1.00%
Growth Fund 1.0050% 1.0575%
Balanced Fund 0.9375% 0.9725%
Conservative Fund 0.8700% 0.8875%

The reduced charge mean more return to our investors.

The largest reduction is for our Singapore Equity fund, which is also one
a top performing fund.

Do all investment funds charge similar annual fee?

Do all investment funds charge similar annual fee?

Most funds in the market charge an annual fee of 1.5% to 2%. The Combined Growth Fund from NTUC Income charge a lower fee of about 1%.

Assume you invest $50,000 for 20 years and the fund earns 6% per annum. The difference of 1% in annual fee gives $26,000 more on maturity. You get more by investing in our fund, due to its lower annual fee.

NTUC Income has recently lowered its annual fee for several of its funds, including the Combined Funds and the Singapore Equity fund. So, the difference is higher than quoted above.

Our funds continue to perform better than similar funds in the market.

Big cases closed at Business Center

The following big cases were closed at our Bras Basah Business Center recently:

$160,000 invested in Flexi-Cash
$96,000 invested in life annuity
$211,000 (5 cases) of Flexi
$70,000 Flexi
$300,000 in life annuity each (X 2 cases)

It seems that more people are willing to come to the business center to make large investments!

Several policyholders have decided to invest in the Flexi Cash to enjoy the lower spread of 0.1% during the promotion period. From 1 September, the spread will be raised to 0.25%.

Flexi Cash earned 0.28% during the past month (ie equivalent to 3.5% for 1 year). It is flexible and is not locked-in for 1 year. The only cost is the upfront spread.

How to select the right investment fund?


I read your article at your blog (My personal experience in managing my own money).

Please advise me on the basic criteria to selecting investment funds? How different is investing in such funds managed by NTUC as compared to the ones offered by banks or other finanical institutes? If I already have life insurance policies, does it make sense to buy investment-linked policies?



You can find the answers in the following FAQ for single premium and regular premium investments:

Many people have life insurance policies and is supplemented by investment linked policies. For example, they get their protection through whole life or term insurance policies and make their savings (including CPF savings) in the investment linked policies.

I will ask my colleague to get a product specialist to contact you. You can ask more questions from this specialist.

Tan Kin Lian
CEO, NTUC Income

Do we employ ex-prisoners?


Hi CEO Mr Tan Kin Lian,

Does NTUC Income employ someone who has been detained in Prison for an offence of not paying their fine. It is not a criminal offence.



We do not rule out any candidate due to past prison record (as they have already paid their penalty).

However, we will only consider them based on their suitability for the job (as there are other candidates available) and also if there is any vacancy.

Tan Kin Lian
NTUC Income

Reply to Dr Lim Boon Hee in Today Paper

Dr Lim Boon Hee asked, "did NTUC Income bite off more than it can chew"?

The frank answer is "yes". We are suffering from temporary indigestion. But, it is not serious. We hope to be able to recover from it fully by October.

When we tendered for the Medishield Plus scheme, we wanted to offer to the 300,000 members a better package that gives about higher coverage at a reduced premium. Our offer was the most attractive. We were given the entire portfolio of 300,000 members.

We made the best estimate of the likely work load based on our experience with 500,000 Incomeshield policyholders that are insured with us, and with the data provided by the Ministry of Health.

The actual volume of claims was higher than expected. This is due to the difference in the way of handling the claims through the integrated system. We have to change the computer system to deal with the higher situation and new way of processing. It takes time to design and implement the changes. There were other integation issues as well.

The matter was aggravated in June, when we introduced the Enhanced Incomeshield plan to meet with the many requests from our existing policyholders. We offered a two month period for upgrading of this plan. We received 60,000 requests. It was not possible for us to cope with this unexpected volume, as many policyholders rushed in to beat the deadline.

We have now decided to offer the upgrading to the remaining policyholders to take effect on the next renewal of their insurance plan. All existing policyholders will be given an additional opportunity for the upgrading within a 12 months period. The terms of the upgrading will also be clearly explained in the FAQ that will accompany the renewal notice.

We apologise to our many policyholders who were affected by our backlog. We plan to sort out this matter by October.

Friday, August 18, 2006

Good performance during the past 4 weeks

A month ago, we sent a letter to our existing policyholders to top up their investment in our fund, and take advantage of the recent drop in the stockmarkets. This allowed them to make additinal investment at a lower price.

A large number of policyholders took this advice and topped up their investment. They have benefitted from the move.

During the past 4 weeks, the investment funds managed by NTUC Income have earned a return of between 2% to 5%. The highest increase is for the Singapore Equity fund.

These are the positive factors leading to the improved sentiment over the past month, globally and in Singapore.

It is still a good time to invest in the funds, as the prices have not recovered to their earlier highs.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Slight fall in interest rate on money market fund

Generally, rates have come down some 0.1 to 0.2% for tenure up to 12 months. This would mean slightly lower return expected on our FlexiCash in the near future.

Despite the decline in rates, we should still be offering attractive returns to clients compared to savings rates offered by banks.

Globally, interest rates could be taking a pause in further hike, moving up higher only if the US Fed resumes rate hike on fear of inflation.

Wednesday, August 16, 2006

Call our hotline for home service

Straits Times

I refer to the article in "Buyer Beware" (ST, 11 Aug 2006). It featured a story about a customer who was overcharged by an electrician who advertised in the classified advertisements. The customer had to seek the assistance of the Consumer Association.

We advise customers to call our hotline, if the wish to engage a contractor for their home. Our contractors have to observe a code of ethics to provide quality service, fair price and and a 90-day warranty on the work.

More than 100 contractors covering 40 services are listed in our home service webiste. They cover many areas of home repairs and maintenance, including electrical, plumbing, air-conditioning and tuition. We check tht the contractors are licensed and have undergone the required training for their trade.

Our contractors are motivated to maintain a good standard, so that they can continue to be on our panel and enjoy a continuing flow of business from us. We handle an average of 150 customers every day.

After the contrator has completed the task, we call our customers to get their feedback. We received a satisfaction rating of 95%.

This is an example of the application of co-operative principles to benefit all parties, including the contractors and their customers.

Our referral service is available to policyholders and the general public. More information are available from our website: You can call our 24-hour hotline, 6788 8788.

Anthony Chia
General Manager
NTUC Income

Take Ownership, be Responsible

My colleague sent this letter to the newspaper. She asked me to publish the letter in my blog.


My daughter is in Nursery Class at a local kindergarten. Her kindergarten is organising a trip to the zoo the end of this month. My daughter brought back the parent’s consent form for this trip. I was appalled to see the following clause in the consent form: "I shall not hold the Centre responsible for any mishap during the trip".

I am indeed surprised to know that a kindergarten, that is suppose to take responsibility of the children when they are at school and at school activities would disregard their basic responsibility in such an outright manner.

Such a clause is indeed a blank cheque for the school to be taken a child safety very lightly. It now makes me wonder if the school would also completely write off their responsibility of my child’s safety if something was to happen during school hours.

If the school does not want to take responsibility, then should they organize such an activity? Is the school worried about their financial responsibility in case an accident occurs? Or are they just being very kiasu? Or is the school reflecting the kind of social fabric that we Singaporean are made up of: that it is not my problem, it someone else’s problem.

I believe that my daughter’s kindergarten is not unique in having such a disclaimer clause in the consent form. I believe the school is merely following guidelines set by the Ministry of Education. If so, then is it indeed the right of every parent to know why schools should organize activities that they don’t want to take responsibility of.

Would I trust my daughter to be sent out with anyone who irks their responsibility of taking care of her safety and well-being? I definitely would not.

Babita Rai

My friend's experience with insurance agents

My friend told this story. 25 years ago, when he started working, he bought a few insurance policies from company X. The agent keeps coming back to him every few years, to advice him to change to a new plan. He took the advice.

Later, he realised that the agent was taking him for a ride. The agent was not looking after his interest. Each time, when he changed the policies, the agent earned a big commission again. He cancelled all the policies, and dropped the agent.

Later, he moved to company Y. The agent gave him good advice, and served him well until today.

Both company X and company Y are not NTUC Income. My friend said that he now buy his home and car insurance from NTUC Income.

Advice: Do not allow your agent to advice you to switch your policies to a new plan. You will lose most of your savings. The agent earned a high commission during the first two years.

My personal experience in managing my own money

Zaobao's CEO forum

Although I earn a high salary as a chief executive officer, I spend my money carefully.

I give a monthly allowance to my wife to take care of the food and other household expenses. I spend carefully on my entertainment, clothing and other personal expenses. If I am not using the company car, I prefer to take a bus or MRT, rather than call a taxi.

I think carefully, before I buy appliances, furniture or other household needs. I keep things for several years and will not replace them unless they break down. When I travel on holiday, I will fly economy class and stay in modestly priced hotels. I do not want to be extravagrant.

My wife share my same values and avoid spending extravagrantly. But, she likes to wear nice clothes and to look pretty. Once a while, she will pamper herself.

I make a large monthly contribution to the Community Chest of Singapore to help the needy.

I have a lot of savings each month. I invest most of my savings in a large, well diversified investment fund managed by NTUC Income. I invest for the long term, i.e 10 years or longer. During the past few years, the fund achieved a very attractive rate of return of more than 15% per annum.

Previously, when I invested on my own in shares, I did not make much gain. Some of my shares made money, but others lose money. On the whole, I do make a small gain, but it was not spectacular. I learned that it is better to let the professional fund manager make the decison for me. They have more time to monitor the investments in the fund.

I live in my own house and own two other properties on rental. I bought my properties at a high price, so they do not make any profit for me. They earn a modest return on the rental.

People who buy property at a low price can make a big capital gain. But, in my case, I am not so lucky with my property investments.

If I were to earn a much lower salary, I will certainly have a monthly budget and make sure that at least 15 percent of my salary is saved for the future. I will be even more careful with my monthly spending. I wish to advise all young people to have a similar approach towards their spending and savings. Do not be extravagrant. Be frugal.

I have three children. Two are working. My youngest is still in university. I encourage them to follow my financial habit and be frugal.

I have taken an investment-linked policy and invested a lump sum for each of my three children. I prefer to give them some of my assets now, so that they can have some money that now belong to them. This will give them a sense of financial well being and independence. So far, they have been careful, and allowed the savings to accumulate and earn a good return. They have not taken out the money to spend.

Sunday, August 13, 2006

Invest now to enjoy a lower charge on Flexi Cash

Here is your last chance to invest in our money market fund (Flexi Cash) during our promotion (ie enjoy lower spread of 0.1%)

Our money market fund earned an average return of 3.5% during the past 1 month. It is better than the interest rate on fixed deposit, and there is no lock-in period.

Our promotion will end on 31 August. After the promotion, the spread for investing in the money market fund will be increased to 0.25%.

By investing now, you enjoy a saving of 0.15% in the spread. If you invest $100,000, the saving is $150. Act now. Enjoy the lower spread, an attactive return, and flexibility.

Call 6877 3366.

Need a loan? Go for Smart Credit!

NTUC Income has launched an unsecured loan called Smart Credit.

The attractions of Smart Credit are:

* available to policyholders above 21, with annual income of at least $30,000
* can be used for wedding, travel, medical, emergency and other lifestyle needs
* up to 2 months of salary
* no need for guarantors
* loan can be repaid within 5 years
* interest rate is only 12.88% per annum
* enjoy a rebate of 20% of interest charged, for prompt payment during the year
* instant online approval through the website

Details are available at

Banks and financial institutions charge 15% to 18% on their unsecured credit. Most of them do not offer any rebate on interest for prompt payment.

Be Smart. Use Smart Credit from NTUC Income.

Barbeque at Labrador Park

My daughter and her husband organised a barbeque at Labrador Park. I attended it. It was an enjoyable experience. I especially like the sea breeze, blowing all the way from Sentosa. It was quite refreshing.

I miss the sea breeze after moving out of Marine Parade 20 years ago.

I recommend friends to organise a barbeque at the sea side. We have many of these wonderful facilities in Singapore. And they are available for a small booking fee.

A few other families also held their barbeque at Labrador Park. The family in the next pit held a birthday celebration.


FAQ: Get a better return for your CPF savings

draft (subject to change)

1. How can I get a better return on my CPF savings?

Your savings in the CPF earns for you an interest rate of 2.5% per annum (ordinary account) or 4% per annum (special account).

If you invest your savings in our Combined Fund (which is allowed by CPF), you are likely to get a higher return. This will give more money for your retirement.

2. How much more can I earn?

The following table shows the amount at the end of 10 and 20 years, if you invest $100,000 of your savings:

Annual return over the term ..........
Term 2.5% 4% 6% 9%
10 years $128,000 $148,000 $179,000 $237,000
20 years $164,000 $219.000 $320,000 $560,000

If you keep $100,000 in the CPF to earn 2.5% per annum., you will get $128,000 at the end of 10 years. If you invest this sum to earn 6% per annum, it will grow to $179,000. You can get $51,000 more, by investing to earn a higher return.

If you keep $100,000 in the CPF to earn 2.5% per annum., you will get $164,000 at the end of 20 years. If you invest this sum to earn 6% per annum, it will grow to $320,000. You can get $156,000 more, by investing to earn a higher return.

If you can earn 9% per annum, the difference is $109,000 for 10 years and $396,000 for 20 years. It is staggering.

I have shown the figure above for the special account (which earns 4% per annum). You will find it attractive to invest your special account to earn a higher rate of return.

The return of 6% and 9% are used for illustration only. We want to encourage you to find out more about other ways to invest your CPF savings to earn a higher rate of return. It is worth exploring.

3. Do I have to invest in risky investments?

There is some risk in investing in equities (i.e. shares of companies) and in bonds (i.e. issued by companies or governments).

You can reduce the risk in the following ways:

* invest in a large, well diversified fund - reduce the impact of some investments performing badly
* invest for the long term - to average out the good and bad years
* invest only in quality shares and bonds - the return is still attractive, and the risk is low

If you choose this investment strategy, you are likely to get the market rate of return. Here are the returns for the past years:

Benchmark Return(Annualized)
10yr 20yr 30yr
Global Equity MSCI World (USD) 6.4% 8.7% 9.1%
Singapore Equity STI (SGD) 5.4% 10.1% N.A.
Global Bond LBAG(hedged to SGD)3.1% N.A. N.A.

Source: Bloomberg

Over the past 10 years, global equities earned an average yearly return of 6.4% and Singapore equity earned 5.4%. The return over 20 years and 30 years are better.

4. Do I have to incur high charges?

The investment funds offered by NTUC Income have lower charges, compared to similar funds in the market.

Our initial charge is 3.5%, compared to an average of 5% charged by other funds. Our annual charge is about 1% per annum, compared to an average of 2% charged by other funds. Other funds may have hidden charges that are not disclosed in the reported charges.

Over 10 years, our lower charges can earn for you about 10% to 20% more than similar funds.

If your investment in our funds earn $200,000 for you, another fund may pay you $20,000 to $40,000 LESS, due to their higher charges! This is a lot of money.

It is better for you to invest your CPF savings with NTUC Income. We will take care of your interest and give you a better return.

5. What fund should I invest in?

We recommend that you invest in our Combined Fund. Here are its key features:

* the Combined Fund is invested in $3,800 million of underlying assets
* the fund is invested in over 900 quality assets (ie equities and bonds)
* the assets are managed by 9 top fund managers based around the world
* the annual charge is among the lowest in the market, i.e. about 1% per annum
* the fund (growth) earned an average of xx.x% per annum during its first three years (2003 to 2005)

Note: Past performance is not indicative of future performance. This investments are subject to risk. The returns are not guaranteed.

6. Can I withdraw my investments at a later date?

You can withdraw your investment at any time.

We advise you to invest for at least 10 year, so that you can benefit from the higher return, and average out the good years and bad years. It also allow you to spread the initial front-end charge over a longer period.

If you decide to withdraw, wait for a good time, when the investment have appreciated in value and produce a good profit to you. Do not withdraw at a bad time, and make a loss.

If you invest using your CPF savings, the withdrawal have to be credited back to the CPF account.

Some people wish to withdraw their investment to pay for a property. They should consider taking a bigger loan for the property. If the interest on the loan may be lower than the return from their investments in our Combined Fund, it is better to keep your investment in the Combined Fund.

7. How can I find out more, before I invest?

You have these options:

* visit our website,
* visit our business center and talk to a consultant (call 6877 3366 to make an appointment)
* contact your insurance adviser to visit you at home
* attend our weekly eduational talk (call 6877 3366 to register)

8. Can I invest my cash savings?

You can invest your cash savings as well. It is better for you to take your savings out of fixed deposit and invest in our Combined Fund.

If you have invested in other funds that levy a high charge, or give you a lower than average return, you can withdraw from that find and re-invest in our Combined Fund.

9. Is this a good time to invest?

The stockmarket has corrected during the past two months. Many of the funds are now cheaper by 5% to 10%.

This is a good time to invest, for the long term. The investments are likely to recover in value over the next 6 to 12 months. (This is just an opinion, and is not a guarantee). You should act now, to take advantage of the lower price.

10. Is there a promotion offer?

We have a promotion offer for a limited period. If you come to our business center or our branch (to see your adviser), you can get a bonus unit of 1% or 2% depending on the amount that you invest.

For example, if you invest $100,000, the bonus unit of 2% will give you an additional $2,000 of investment.

11. How do I invest?

You can call your insurance adviser or visit our business center (call 6877 3366 to make an appointment). You can call the CPF to get a statement of the amount that you can invest.

Act now. Do not miss this attractive offer.

Get prior approval first for your loan

A borrower wanted to take a loan from several banks. He was rejected, as he had a previous bad credit record.

This is his history.

He operated a business before. The business failed after a few years. He had to sell his house to settle his debts. He has now found a job. We wanted to buy an apartment now. He even signed the purchase option. Then, he approached the bank for the loan.

The banks had access to his previous credit record, as it is now shared through a credit bureau. Several of the banks rejected his loan.

He approached NTUC Income for help. He needs a loan immediately as the option will expire within the next few days. We find it difficult to help him, but we will try.


Here is my general advice to other people who wants to buy a property:

* you can approach NTUC Income to get prior approval for a loan
* we will process your application for free
* you can then look for your property
* you can sign the purchase option without worring about the loan (as it is prior approved)
* we are likely to give you a lower interest rate or fairer terms

Be wise. Get proir approval.

Performance of Equity Funds

Performance of Equity Funds
between major insurers for 2003 to 2005 (3 year)

Investment-linked Fund Annualized
Global Equity
NTUC Income Global Equity 19.2%
Prulink Global Equity 16.0%
AIA Portfolio 100 14.3%
Greatlink Global Equity 12.5%
Singapore Equity
NTUC Income S'pore Equity 21.8%
Greatlink S'pore Equities 17.7%
Europe Equity
Prulink Pan European 19.8%
NTUC Income Europe Equity 19.5%
Greatlink Europe Equity 17.5%
Prulink Global Technology 20.7%
NTUC Income Technology 18.2%
AIA Global Technology 13.8%
Source: S&P Report

Think of your Future!

We live in an uncertain world. Jobs are uncertain, due to global competition. Life is uncertain, due to terrorism, war, disease and natural disasters. It is even risky to invest our savings.

Many people need insurance to take care of the uncertainty and risks.

The financial institutions, such as banks, insurers and fund managers, design financial products to address these needs. They are able to design complicated products that look attractive, but do not give a fair return to the consumers. Their aim is to make a big profit margin for their shareholders, but this is usually done at the expense of the consumers.

These products are usually not easily understood by consumers. But, they are able to use marketing to get consumers to buy their products.

NTUC Income offer fair products that are good for consumers. They give an attractive return for their savings.

We wish to educate consumers, so that you know how to choose the right financial product and get a fair, attractive return for their savings. You can earn $20,000 or $50,000 more, on your long term saving plan, without taking excessive risk.

Here are the convenient ways for you to learn:

* read our product FAQ at
* learn about insurance at
* attend our educational talk (call 6877 3366)
* read a ranking of products:

Please help to pass this message to your friends and family members. Do them a favour. Help them to make the right choice. It is for their own good.

Tan Kin Lian
Chief Executive Officer
NTUC Income

Flexi Cash earned 3.5% after initial charge of 0.1%

Dear Mr Tan

I refer to your posting on 8 August 2006 where you indicated that the flexi-cash earned a return of 3.5% per annum in the past 1 month, presumably during the month of July 2006.

I have invested $200,000/= on 7 July 2006 and looking at the unit price on 7 August 2006, my return is less than 1.8% p a. I earned interest of only $300 on $200,000 for 1 month).

Please care to enlighten me how the earning of 3.5% per annum came about.



The return for 1 month is about 0.28% (equivalent to 3.5% per year). Less the front end load of 0.1%, you get 0.18% for the past one month.

Next month, if the return in the money market fund is still the same, you will get 0.28%. If the money market fund increases, you will get highier.

The unit price is a way to calculate the average return of all the investments in the money market fund, and especially as investors join and leave on different days.

You will certainly enjoy the higher interest rate after overcoming the initial front end load of 0.1%. It is a good investment. Your money is not locked in to any specific period.

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