THEY are non-events as a rule, but today's NTUC Income annual general meeting (AGM) promises to be a standing-room only showdown because of a simmering feud over bonus payouts.

Hostilities flared again yesterday after the heat seemed to have been taken out of the issue earlier this week.

That was when former chief executive Tan Kin Lian signalled that he was prepared to avoid a confrontation at the meeting by not showing up.

But the truce proved short-lived. Barbs have been flying again and Mr Tan confirmed yesterday that he would be at the AGM, making a seat at the 6pm event a prized commodity among policyholders.

Income AGMs usually last 30 minutes and attract about 200 people, but more than 500 have registered for this year's event, with many others having to be turned away.

The rush for seats has forced Income to change the venue from its Bras Basah auditorium to NTUC Centre at Marina Boulevard.

The battle lines have formed around a single issue: Income's move to restructure bonus payouts.

The insurer plans to cut its annual bonus payouts on life policies. Instead, it will assign more cash as special bonuses to be paid out at the time of death or when a policy is cashed out.

Mr Tan objected to the scheme and used his blog to mount a 'collective protest' earlier this month.

His plan was to lodge a letter outlining policyholders' objections at the AGM.

But he decided on Tuesday to put his protest on ice after discussions with Income management.

In a letter to The Straits Times Forum yesterday, Mr Tan said he was holding back to 'allow more time to find a settlement'.

He added that he disagreed with Income's position, namely, that the old bonus structure was unsustainable for the firm.

Mr Tan reiterated that the best option would be to allow customers to choose between the old and new bonus structures, which is what some policyholders had also requested.

Yesterday, Income issued a statement in response to his letter, stating that the bonus revamp was the 'right decision'.

It told policyholders that the new structure gave the firm 'a better chance' to deliver 'better returns' and reduce the likelihood of the kind of bonus cuts that had happened in the past.

It reiterated its earlier stance that the old high annual bonus structure was 'not sustainable', and continuing with it would undermine Income's ability to deliver total returns.

This is why it will not give customers the option of remaining in the old structure.

Mr Tan responded last night with a statement saying he was disappointed that such a choice would not be extended.

'It is still not clear to me why this option cannot be offered to policyholders.'

lorna@sph.com.sg

What NTUC plans to do

• The insurer plans to cut its annual bonus payouts on life policies.

• Instead, it will assign more cash as special bonuses to be paid out at the time of death or when a policy is cashed out.

• It says the old high annual bonus structure is 'not sustainable', and continuing with it will undermine Income's ability to deliver total returns.

What former CEO wants

Mr Tan Kin Lian wants Income to allow policyholders to choose between the old and new bonus structures.