FREQUENTLY ASKED QUESTIONS
1. Can non-policyholders apply for the shares?
2. How can policyholders subscribe to Income shares?
3. Can I use funds from my CPF account to pay for the shares?
4. Can I withdraw my shares urgently if I require the funds?
5. Do I have to make a nomination for my shares?
6. What happens to the shares if the shareholder passes away?
7. What happens if the nominee(s) passes away and there is no other nomination?
8. Will the dividend be pro-rated if I hold the shares for lesser than the entire duration of the financial year?
9. Are the dividends declared taxable?
10. Is the dividend rate guaranteed?
11. Is dividend payable to me during the three month notice period for redemption?
12. What is meant by 'nett asset value' of the share?
13. What is the redemption value of the shares?
14. Will there be future declaration of bonus shares?
15. What are the reasons for doing away with the declaration of bonus shares?
16. Why is the redemption value not based on the nett asset value if this is higher than the par value?
17. Where are the funds raised from shares invested?
18. Will a share certificate be issued to the shareholder?
19. When are dividends declared?
20. Can I buy Income shares for my children?
21. Can a shareholder transfer his shares?
22. How can a shareholder redeem his shares?
23. Are partial withdrawals allowed?
24. What are the factors which are taken into account in determining the dividend rate?
Q1. Can non-policyholders apply for the shares?
A1. No, non-policyholders cannot apply for the shares. Only life policyholders of NTUC Income are eligible to subscribe to Income shares. This is a benefit given to them to enjoy attractive returns on a long term investment.
Q2. How can policyholders subscribe to Income shares?
A2. Applications for Income shares have been closed since Dec 2004.
We are currently maintaining a waiting list for life policyholders who wish to subscribe to Income shares. We offer the shares which are redeemed by existing shareholders to the persons on the waitlist on a first come first served basis.
Life policyholders who are keen to be on the waiting list may send an email to email@example.com with their full name and NRIC number. We will contact the persons on the wait list when we are able to process their applications.
Q3. Can I use funds from my CPF account to pay for the shares?
A3. You cannot use funds from CPF accounts or Supplementary Retirement Scheme (SRS) to pay for the shares.
Q4. Can I withdraw my shares urgently if I require the funds?
A4. Yes, you can request for urgent withdrawal. Under our by-laws, our board of directors has the discretion to waive the notice period of three months. We are usually able to find another shareholder to take over your shares, so you do not need to wait for three months.
Q5. Do I have to make a nomination for my shares?
A5. You may make a nomination if you wish and the proceeds from the shares will be paid to your nominees. If you do not make a nomination, the proceeds will be distributed in accordance to prevailing laws.
Q6. What happens to the shares if the shareholder passes away?
A6. If the shareholder passes away, the shares will be redeemed and the proceeds will be paid to the nominees of the deceased shareholder. If there is no nomination, the proceeds will be distributed in accordance to prevailing laws. The shareholder can make or change his nomination at any time. The latest nomination will supercede the earlier ones.
Q7. What happens if the nominee(s) passes away and there is no other nomination?
A7. If all the nominees die before the shareholder and no further nomination is made
· the redemption value of the shares will be paid to the legal personal representatives of the deceased shareholder, when the shareholder passes away.
If some of the nominees die before the shareholder, and no further nomination is made in respect of the deceased nominees
· the surviving nominee(s) will be paid their share (i.e. the percentage stipulated in the nomination form) of the redemption value of the shares when the shareholder passes away. The share of the nominee who dies before the shareholder, will be paid to the legal personal representative.
If the nominee(s) passes away a few days after the shareholder
· the redemption value will be paid to the legal personal representative of the deceased nominee.
If the nominee(s) and shareholder passed away simultaneously
· in cases where two or more persons die in circumstances where it is not possible to determine which of them survived the others, the law presumes that the oldest died first (in order of seniority) and that younger shall be deemed to have survived the elder.
Q8. Will the dividend be pro-rated if I hold the shares for lesser than the entire duration of the financial year?
A8. Yes, the dividend will be pro-rated from the date of allocation of shares to 31 Dec. Our financial year is from 01 Jan to 31 Dec.
Q9. Are the dividends declared taxable?
A9. Yes, it is taxable. The shareholder must declare the dividend received when submitting his income tax returns.
Q10. Is the dividend rate guaranteed?
A10. The dividend rate depends on our business results and can vary. When the business does well, shareholders can expect to receive good dividends.
Q11. Is dividend payable to me during the three month notice period for redemption?
A11. Yes, the shareholders will still receive their dividends during the notice period.
Q12. What is meant by 'nett asset value' of the share?
A12. The nett asset value is the actual worth of the share based on the assets in the shareholder fund and the free surplus in the general insurance fund.
Q13. What is the redemption value of the shares?
A13. The redemption value is the par value of $10 or the nett asset value, whichever is the lower.
Q14. Will there be future declaration of bonus shares?
A14. At our Annual General Meeting held on 30 May 2007, we have announced that we have changed our dividend policy and will do away with the declaration of bonus shares every five years. Therefore there will be no future declaration of bonus shares. We will instead declare a special cash dividend in addition to the normal dividend, subject to our business performance and financial position.
Q15. What are the reasons for doing away with the declaration of bonus shares?
A15. We want to be fair to shareholders and reward them in a timely manner. Based on feedback received from shareholders, the current practice of declaring bonus shares every five years is perceived as being unfair to shareholders who withdraw their shares or who die before the bonus declaration is made.
Q16. Why is the redemption value not based on the nett asset value if this is higher than the par value?
A16. The redemption value is not based on the higher nett asset value because the shareholder buys the share at the par value of $10 even if the nett asset value is higher.
Q17. Where are the funds raised from shares invested?
A17. The funds will be invested in the insurance business as well as in fixed income securities and equities.
Q18. Will a share certificate be issued to the shareholder?
A18. Income has adopted a scripless system. No share certificate will be issued. A record of the shares will be sent to the shareholder through a yearly statement showing the number of shares he owns and the amount of dividend payable to him.
Q19. When are dividends declared?
A19. Dividends are declared at the annual general meeting which is held in the month of May or June each year. It will be credited to the shareholder's bank account within two weeks after declaration.
Q20. Can I buy Income shares for my children?
A20. You can buy the shares for your children if they are 18 years old and have a life policy in their own name. The shares will be issued in the name of the child.
Q21. Can a shareholder transfer his shares?
A21. Based on NTUC Income's by-laws, a shareholder can transfer his shares if he has held the shares for at least one year. The transfer can only be made to another member who is not already holding the maximum number of shares. However, this does not apply to bonus shares. Under the Co-operative Societies Act, bonus shares can only be withdrawn or transferred after ten years from the date of issue. As Income is a co-operative society, it has to comply with this legal requirement.
Q22. How can a shareholder redeem his shares?
A22. The shareholder can write to NTUC Income, 75 Bras Basah Road, Singapore 189957. He must include his particulars and indicate the number of shares that he wishes to redeem. Under our by-laws, the shareholder must give three months notice to redeem his shares. However, if the shareholder requires the funds urgently, he can request for urgent redemption. The redemption request will then be processed on an urgent basis and the proceeds will be paid out within 10 working days.
Q23. Are partial withdrawals allowed?
A23. Yes, the shareholder can choose to withdraw only part of his shareholding.
Q24. What are the factors which are taken into account in determining the dividend rate?
A24. The factors are:
a. Income’s co-operative status
As NTUC Income is a co-operative, our goal is not to maximize shareholders’ returns. Our goal is to give a reasonable return to shareholders, and to return a substantial part of our surpluses to policyholders.
b. Fair returns
Over the last 20 years, shareholders received dividends ranging from 6% to 8% each year. In addition, they received bonus shares of up to 15% every five years. These returns should be viewed in the light of the higher interest rate environment that applied in the 1980’s and 1990’s. Comparatively, interest rates are much lower now and shareholders must have realistic expectations on future returns.
c. Long term sustainability
Our dividend policy is guided by long term sustainable performance and returns. The global interest rate environment today is very different compared to the past. A higher rate of returns was also possible in the past since the shareholder base was much smaller. With a larger shareholder base, the sustainability of the returns is an important factor to take into account.
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30 Sep 2012