Income thanks Mr Geoffrey Kung for his feedback (Be cautious of plans promising escalating income; Oct 29).

In his letter, Mr Kung indicated that his annuity plan with Income is a "participating plan" but the payout "never escalated".

We would like to offer the following clarification.

A participating annuity plan offers a fixed monthly payout to policyholders. Annually, the annuity plan may declare a bonus, which is not guaranteed.

This is dependent on the investment return of the Participating Fund and its future investment outlook, the cost of managing the fund and the average life expectancy of policyholders at large.

This way, we ensure the sustainability of our annuity payouts, in line with longer life expectancy in Singapore today.

For the annuity series that Mr Kung referred to, interest rates have fallen significantly while life expectancy has improved in the years since he invested.

No bonus has been declared on the annuity series, to reflect these conditions accordingly.

However, the annuity series has been maintaining stable monthly payouts, which we believe are attractive relative to today's interest rate environment.

Should conditions change in future, this will be reviewed.

Income sends out bonus statements by post or e-mail to policyholders annually to inform them of the performance of their participating policies.

We also encourage our annuitants to contact their advisers or reach out to our customer service officers via our hotline (6788-1122) and e-mail (csquery@income.com.sg), should they have any concerns or queries regarding their policies.

Andrew Yeo

General Manager, Life and Health

NTUC Income