Saturday, May 31, 2008

Fireworks at the 38th NTUC Income AGM

I, being a concerned policyholder of NTUC Income and was eager to see some fireworks between the 2 Tans, I went to the 38th NTUC Income AGM in NTUC Centre today.

Here the meeting goes

I arrived at 5:40pm, registered and went for tea and Polar cream cakes and curry puff at the reception area. There are many people which I think nearly 1/3 are NTUC Income Staffs and Consultants. All of us were enjoying the scenery of the IR construction while enjoying the refreshments. I estimated that around 400 people turned up for this AGM.

The meeting started at 6:15pm as Chairman Ng Kee Choe begin his opening address and subsequent assurance regarding the Change of Bonus Scheme which is for the good of Policyholders.

Shortly after his speech, Mr Tan Kin Lian went to the nearest Microphone and began his 5 minutes talk about his meeting with Lim Boon Heng and Matthias Yeo and his decision to withdraw the collective protest. He maintains that he do not agree to the scheme but will continue to observe the company as a policyholder. There was a loud applause when he announced the decision to withdraw the collective protest. (Perhaps, mostly are NTUC Income people)

The bonus structure issue was temporarily put aside when many policyholders started scrutinising the Annual Report questioning things like investment performance, Corporate Governance, Subprime involvement, fund managers performances, expenses to SLF, bad experiences with NTUC Income, etc etc. All these dragged for about an hour. Just as I thought things were ending, the bonus issue pop out again.

There was at least 4-5 people started a debate with the board of directors asking tough questions such as policyholders must be given an option, legal actions that policyholders can take, necessity to take higher risk with Life Fund, etc... Mr Ng Kee Choe, Mr Tan Suee Chieh, Mr Matthias Yeo and Ken Ng all had a hard time answering them. Mr Tan Kin Lian also added some fire citing that the bonus structure should not apply to some policies, NTUC Income should give out their surplus fairly to Policyholders and also highlighted that the Chief Actuary and Chief Executive are new. The debate don't seem will bear any answer.

The meeting finally ended at 8:45pm after two and a half hour. I spoke to one of the union leader and he told me that this AGM is the longest out of the 15 years of NTUC Income AGMs that he attended. Most AGMs end within half an hour.

My feel about this meeting

I felt that I just came back from a show, just like the front page of the annual report. There was sufficient debate about the bonus issue as expected but the answers are all the same as if all of them have a script with them. Quite a bit of fireworks with Tan Kin Lian around and some policyholders with real funny questions. I enjoyed it very much.

But frankly telling, I feel that all debates on the bonus thingy are useless because no one will be able to tell if the decision they make today will be right or wrong at least after 10 years. Why argue? Do you think NTUC Income will change their stance after so much publicity about it? Its just like government increase GST to 7% when inflation is so high, do you think they will reduce back to 5%?

I am also surprised to know that there are some people who really look into every page of the annual report and asked plenty of questions which we feel are so small to be noticable. But some people really ask and doubt too much to a point of doubting the capabilities of the actuaries, investment teams, directors, managements, etc
I wonder if AGMs of other insurance companies are similar like this...


Anonymous said...

Thanks for giving your readers a brief of what happened at the AGM. The outcome of it was expected. Now, the decision has to be made. Terminate all the living policies that were taken in the past, and purchase term coverage instead. It is not a matter of whether to give the Management a chance to prove themselves right but consumer's right! What is your down-to-earth advice?

Khiat Han Hwee Adrian said...

My down-to-earth advice will be a standard answer used by most advisers.

If your decision to buy that policy in the past are purely because of the bonus structure and you are now so upset because of the change, then terminate it and don't lose sleep.

If your decision to buy that policy in the past is for protection and some reasonable returns, then keep it.

Terminating the policy definitely will not do much good to you especially if the policy was taken many years ago.

We never know if the change is for the good or bad. I believe its for the good.

Terminating the policy will not be because of the bonus structure, it will be because you now prefer to buy term and invest yourself.

Anonymous said...

Thanks for the write-up on the AGM.

Do you know what rate NTUC has declared on its shares for the 2007 financial year?


Khiat Han Hwee Adrian said...

If I remembered correctly. Its 6% dividend for the NTUC Income Shares. How I wish I had purchased in 2004.

Anonymous said...

This NTUC Income thing is different from the GST thing. We voted for the govt that makes the decision for the GST. If we are not happy with it, we can exercise our vote the next election.
NTUC Income management is not due to our voting. They only way to want out is to cancel our policies. But as you have said, it is not to our advantage.
Now I begin to wonder whether the hidden agenda is to steer loyal policyholders to cancel the policies because
1. They are considered the stepchildren since they bought the policies during TKL time.
2. By cancelling, NTUC Income makes a big profit because the liabilities to pay out, since everybody dies one day and the risk is getting higher by the day, so they can start again. Just like shifting the goal post when you are about to score. So if you walk away, no score, so no payout.

Quite underhanded, dont you think? And who else is going to absorb the badwill? Agents like yourself who have listened to them and sold to your relatives and friends, who will now discount their favourable views of you as well as lower their trust in your future recommendations. Agents have used up their goodwill with their friends and relatives. All those time and money and effort spent cultivating a good relationship with them have all been sold out with the hiring of this, I believe, Malaysian guy with the funky specs.

Khiat Han Hwee Adrian said...

Haiz. Nobody know if it will be for the good or worse. If they don't do it, it may be for the worse too?

If you don't trust NTUC Income, then don't buy their policies anymore. But if 10 years later, they proved to make the right choice by adopting changes, then you decide by then again.

I really think that its better for them to adopt changes. I trust NTUC as a strong and responsible union, I trust NTUC Fairprice. I also trust NTUC Income.

Anonymous said...

Then, Adrain, it shows you don't know much about it and naive to believe the new management.Look, the old scheme worked for donkey years until this smart alek came . The best kept secret was due to the old scheme, right? Also look at the other companies which adopt the high special bonus strategy. What so good? high special bonus allows them to play with your money.They may even lose for you. Why don't you play yourself?
It only shows a lot of risk to be borne by policyholders. The consultant engaged by ntuc , do you know who is he? He has conflict of interest. And he bungled by quoting the Equiatable life case to support his argument and which was flawed. The collapse wasn't due to high annual bonus. It was largely due to maniplulation of the special bonus and which is happening with all other companies. To say that is the industry practice, tell your ceo, go and sleep for another 10 years.
The truth is something is wrong and he is buying time to restore by delaying paying out so that he can "manage' the fund. Wake up Adrain and know the dishonest world

Anonymous said...

Of course we will not buy NTUC Income policies anymore. But the point is, what about those who have bought the last decades? You believe then you can buy somemore lah. But what about the majority who did not believe? Actually, it is not the restructuring that is so unbelievable. If Tan Kin Lian is the one who mooted the restructure, I think more people will accept as they trust this man who has proven himself to be an honest, transparent, no tricks type of personality. At the end of the day, it boils down to trust.
For example, if I were to need to buy another policy, I will be more inclined to buy from you Adrian, because from your blogging I could see streaks of honesty and sincerity, than from someone I do not know.
But for this new guy, from his funky specs to the way he did not bother to engage policyholders to the way he surreptitiously buy 40K dollars worth of chairs and then lock it up and preventing others from using, I mean, doesn't it sound very much like one famous durian and peanut story? Hey Dandy-looking guys cannot be trusted lah!. What is more, his lifestyle of holding meetings in posh hotels smacks more of a high rolling casino King than a sincere chap who can look after your money well like the honourable Mr. Tan Kin Lian lah. Of course, now that his wings are clipped, I doubt he can come out any fanciful stuff but I think his image is not congruent with that of a co-operative or a social enterprise. He may have more luck with the new casino when it opens later. Meanwhile can he at least let us have an option to choose or is he still subbornly going to damage NTUC's name forever?

Khiat Han Hwee Adrian said...

Mr Tan SC's wings are certainly clipped. It will take considerable time for NTUC Income to regain the trust of many affected policyholders.

Fyi, TSC sounds like mumbling when he answered to policyholder's enquiries that day. I don't know if he is under a lot of stress.

btw, I really don't know if the chairs in the boardroom really cost $40k each. I went into the room once and sat on the chairs. Don't looks that special and expensive leh. I seriously think its more like a rumour than anything else.

Anonymous said...

Found this latest posting on Mr. Tan Kin Lian's blog that is very disturbing to say the least.

Restructure of Bonus not applied fairly
Dear Mr. Tan,
I have three policies belonging taken by my family, which are subject to the bonus cut. I do not like the cut, as I am not guaranteed to get the special bonus at a future date.

My friend told me that he has bought a Vivolife policy that is not subject to the bonus cut. The bonus rate is higher than my policy, before the cut. Why does NTUC cut the bonus for some policies and give higher bonus for other policies. Is it because the higher bonus will help to sell the Vivolife? I find this to be very unfair. Should I lodge a complaint to MAS?

I have raised this issue with the deputy chairman of Income. Let us wait for their reply. Maybe, they have a valid reason to treat the policies differently.
Posted by Tan Kin Lian at 11:33 PM

I must say I am really enraged to read this. The integrity of NTUC Income is gone forever. How can they cut the bonus for old policyholders and give higher bonuses to new policyholders? Even if the new CEO does not like those policyholders who bought during Kin Lian's time, this is a very underhanded method to be punishing us. All this while they are talking about smoothing but the evidence showed otherwise. There appears to be a calculated move to punish old policyholders in favour of the new. Isn't this something like when the stepdad comes in the former children were treated badly while his own children are treated well? And they still need time to investigate this? Meanwhile we are paying every month to be discriminated? It really makes my blood boil even thinking about this.

Khiat Han Hwee Adrian said...

I did study actuary science and I'm never study in details on how the bonus are paid for Vivolife or other earlier policies.

From my understanding, the vivolife plan was designed with the new bonus structure when it was launched. That is why it was not affected by this saga. As for if it is giving higher bonus, I don't think so.

Anonymous said...

5.1% pa dividend for OCBC Preference Shares. Would you consider buying this instead of NTUC Income Shares since you missed buying it in 2004?

Anonymous said...

If not careful, ntuc will end up like Equitable Life...which failed becuase of too much being kept in special bonus which was never distributed and
Ntuc 's consultant gave half truth when he wrote to defend NTUC. It was a case of conflict of interest.

Anonymous said...

Arian said :"Terminating the policy will not be because of the bonus structure, it will be because you now prefer to buy term and invest yourself."

Having bought my policies decades ago, it is a different ball game to be buying term now since age and insurability is different from decades ago.
By your logic, it simply means that we cannot terminate. But terminate we must, and the reason will be simply we do not TRUST the new management of NTUC Income. We are doubtful of NTUC Income's integrity. We are worried about NTUC Income's future, hence our future. Unless and until there is a clear stand, not one of taking more time to sort out the issues without giving a timetable, NTUC Income's trust, integrity and transparency is dubious and hence its reputation is now hanging in the balance.
So the reasons for us to terminate our policies will be because we do not trust NTUC Income anymore. Period.

Khiat Han Hwee Adrian said...

1) Correct my error in my previous comment. I did not study Actuary Science.

2) OCBC Preference Share. If you got money and you can get it. Of course its good.

3) NTUC end up like Equitable Life? Anything is possible. But there are nothing concrete to prove your suspicious. So why doubt them so much? Give them a chance. No matter what, they are still under the NTUC Umbrella, they cannot anyhow anyhow...

4) If you cannot trust NTUC Income anymore, then get from companies which I don't know why you trust them more than NTUC Income. Unless you totally don't insurance companies, then NTUC Income is still a good choice compared to many companies.

Anonymous said...

I have put up with the lower standard of service of NTUC INcome for decades, thinking that even though the standards are lower, they still have a minimum level of integrity and honesty. Now that the integrity and honesty have also gone down the drain, what is there to hold on to? OF course, the only problem now is that premature surrender will be to policyholders disadvantage. Precisely because NTUC Income comes under the umbrella of NTUC, it is even more outrageous that they have ignored our pleas to be fair and unilaterally continue their obstinate way, knowing that we have little choice. Shame on NTUC Income, shame on NTUC, shame on its leaders!!!

Anonymous said...

Look at this:

1st paragraph, last sentence "In fact, in Singapore, most other life insurance companies have adopted this practice for many years."

If so why the big hoo ha until big big in newspaper is because of TKL? Why didnt see big hoo ha in the past when other insurers also did so?


Anonymous said...

The next AGM is coming up soon. So has anything changed? The world has changed. It has shown that there are many sharks around to play with your money. Are our money safe? Is NTUC Income playing with our money? What is left? We need answers and cannot allow the funky one to continue playing with our money without transparency and accountability. Where is our money?