MPs offer ideas to improve CPF

(24-07-2014, 10:11 AM)specuvestor Wrote: I will be keen to see which fund will stick their neck out and say they can give 4-5% return annual in SGD terms over say 5-10 years

"The main challenge will be for private pension plans to offer a realistic chance of achieving better returns than the four to five per cent on the CPF Special Account, he said."

http://www.channelnewsasia.com/news/sing...77236.html

(24-07-2014, 10:39 AM)CityFarmer Wrote: I have an endowment plan (from AIA) with a current Projected Investment Rate of Return (PIRR) of 4.75%, which was adjusted from a more favorable PIRR when it was signed years ago. The PIRR then, made it an obvious choice to participate, and the current PIRR is comparable with SA rate. It is probably the best one in the market then, and the plan isn't available now, base on the feedback.

One point to note, it is non-guaranteed vs. the almost guaranteed for SA

So what was the past few years' ACTUAL return ie bonus announced? My own experience with AIA (own experiecne only, not picking on AIA) is that the projection doesn't match realised

(24-07-2014, 11:21 AM)specuvestor Wrote: So what was the past few years' ACTUAL return ie bonus annouced? My own experience with AIA (own experiecne only, not picking on AIA) is that the projection doesn't match realised

The policy was signed years ago, and I didn't follow and kept the records for the initial period, but I do have the last decade data.

It was pretty consistent in the last decade, for the 4.75% PIRR. The only adjustment happened was around 2000, after the AFC, IIRC.

I received a cheque last month from NTUC Income for the maturity of a 30 years endowment policy; and I calculated that I get a grand total of 3% annual return.

(24-07-2014, 11:54 AM)egghead Wrote: I received a cheque last month from NTUC Income for the maturity of a 30 years endowment policy; and I calculated that I get a grand total of 3% annual return.

http://www.income.com.sg/aboutus/PolicyY.../index.asp
Eh... different from what they put in the website leh...
You wrong or income wrong?

I got this NTUC Income term policy that will return all my premium paid at 20 years maturity. Ntuc stopped it long time ago so probably it is too good a deal for policyholders.


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(24-07-2014, 04:17 PM)yeokiwi Wrote:

(24-07-2014, 11:54 AM)egghead Wrote: I received a cheque last month from NTUC Income for the maturity of a 30 years endowment policy; and I calculated that I get a grand total of 3% annual return.

http://www.income.com.sg/aboutus/PolicyY.../index.asp
Eh... different from what they put in the website leh...
You wrong or income wrong?

yeokiwi, thanks for providing the information.

I wrote to NTUC Income for an explanation and got an answer. My policy, which I signed up when I was 19, was a Special Endowment Policy which was made up of 80% term and 20% endowment. Therefore cannot be compared with the endowment policy yields that is posted.

Please note you should compare like with like. The projection and actual return depend quite a bit on when you started the policy. Those who bought policies when interest rates were quite a bit higher would have higher actual returns.

In this respect, it is like bonds. In fact in many cases the major portion of the float would be used to buy a long dated bond to guarantee a base return.

For example, a SGS bond expiring in 2042 currently has a 3% yield. Therefore I would expect that the guaranteed return would be something like 2% for an endowment policy at present. The bonus would come from investing part of the float in something risky. And of course the insurer want their cut as well.