NTUC Income is not like Equitable Life

Mr. Tan,

I believe that the 'expert witness", Mr. Nick Dumbrack, engaged by NTUC to give credence to the restructuring bonus has been misled to think that NTUC 's existing bonus structure was "onerous" like the Equitable Life and he claimed that onerous bonus led to the collapse of Equitable life.

Equitable Life's collapse was NOT due to the onerous annual but due to "no annual bonus" and dubious manipulation of the final or special bonus which was 'onerous". This shows Nick Dumbrack's purpose of the ST. article was to mislead the public that NTUC could be in danger of collapse if the bonus structure is not reshaped like all others in the industry. This is half truth.

The appointed actuary, NICK Rhodes, of NTUC between 2002 to 2007 had a different view. Nick Rhodes is a British, I believe, and I am sure he is aware of the Equitable Life 's collapse. He would have warned NTUC if there was danger but then the NTUC's situation was never any where near what was practised by Equitable Life.

His testimony is that NTUC finance was stable and the special bonus was stable and because of this it was different from the rest and could deliver superior products than the other companies. If the structure is changed there will be uncertainty and policyholders will have no inkling of their cash value at any point in time.The special bonus may not be declared even because it forms part of the risky component of the life fund.

The best solution is to allow the options of opting in or out. This is the most equitable path to take.

zhummmeng