WE REFER to the recent news reports on NTUC Income's bonus restructuring affecting its life policies.
As Income's financial consultants, we have had to explain the bonus restructuring to our clients. While they were initially taken aback by this move, many eventually understood and accepted our explanation that the purpose of the restructuring was to protect their financial interests.
We explained that the old structure was unsustainable, and that the new one is meant to produce better returns for policyholders in the long term, while protecting their short-term yields.
By increasing the resilience of the life fund, the new structure allows for smoothing of yields so that policyholders have a lower risk of seeing their bonuses cut in a bad investment year.
It is always a challenge communicating change, more so when the change has a bearing on financial interests.
However, we were able to gain our clients' trust after reassuring them that Income remains a social enterprise committed to its social purpose, and that it will continue to put their interests first.
By opting to continue with their life policies, they have signalled their continued trust in Income. We do not take this for granted, and will continue to work hard to reciprocate the trust and support they have extended towards us.
Linda Oh (Ms)
(This letter carries 16 other names)
This article was first published in The Straits Times on Jun 9, 2008
