Cumulus Flexi Retirement Plan

Transcription

1 For intermediaries March 2015 Cumulus Flexi Retirement Plan As part of our on-going commitment to offer retirement savings solutions for a range of market segments and client needs, we offer the Cumulus Flexi Retirement Plan for clients who require flexibility of contributions or those with large one-off contributions. The following features set the Cumulus Flexi Retirement Plan with its unit trust type charge structure, apart from similar products in the market: Tailored investment options for simplified advice, or for clients who require more investment fund choice, or those who don t want to be burdened with continuous Regulation 28 compliance requirements. For every contribution added to the plan, or for every rand of growth earned on the plan, the administration charge percentage reduce to as low as 0.20% per annum. Professionals and Graduates versions qualify for discounted administration charge Investment funds with an investment guarantee that increases over time as the value of the investment grows A range of lifetime investment options for complete peace of mind This document provides more detail about these features as well as the range of leading investment funds and lifetime investment options available at low fees. Sanlam is a Lice Sanlam is a Licensed Financial Services Provider.

2 Tailored investment options The Cumulus Flexi Retirement Plan offers the following investment options: Core Option Simplified option with only lifetime investment options - removing the burden from clients of having to study the markets themselves to make complex investment decisions. Minimum recurring payment of R250 per month. Comprehensive and Comprehensive R28 Options The leading Sanlam and external investment funds across all risk levels and asset classes are available, making it easier to select an appropriate investment portfolio. Within this range the Comprehensive R28 Option offers access to the Regulation 28 compliant funds only. Minimum recurring payment of R500 per month. One-off contributions only from R Ad hoc contribution increases from R250 per month. Ad hoc one-off contributions or in combination with recurring contributions from R Clients can upgrade to the Comprehensive/R28 Option once they ve reached the minimum payment and if they require investment fund choices. A once-off administration charge of R300 will aplly. Clients cannot move from the Comprehensive/R28 Option to the Core Option. Contributions can be made by debit or stop order. For stop orders the Core Option allows only Persal stop orders. Contractual payment growth from 5% - 20% per annum is optional. One-off payments can be added at the start of the plan or at any time thereafter. Recurring payments can only be added at the start of the plan. The minimum inception age of a life insured is 1 with no maximum age. Investment fund choices Core and Comprehensive R28 Options The following different life time investment options are available: Name Consists of Description of option Diversified Life Time Investment Option Diversified Life Time Investment Plus SATRIX Life Time Investment Option Diversified Wealth Builder Wealth Protector Diversified Wealth Builder SIM Active Income fund SATRIX Dynamic Balanced Wealth Protector Suitable for clients who want access to leading active managers and planning to purchase an inflation-linked annuity at retirement. Suitable for clients who want access to leading active managers and planning to purchase an investment-linked annuity at retirement. Suitable for clients who want access to passive management and planning to purchase a CPI linked annuity at retirement. 2

3 The working of the Diversified and SATRIX Life Time Investment Options Closer to the chosen retirement date, we will gradually shift the allocation of the investment by switching* between the investment funds to ensure that the investment is fully invested in stable investment funds at the planned retirement date. The working of the Diversified Life Time Investment Option Plus As the life insured approaches retirement, we will gradually shift the allocation of the investment by switching* between the investment funds to ensure that the investment is suited to provide an income for retirement. This is done by taking the life insured s age and the term to the planned retirement date into account. *No transaction charge will be levied for these switches. Comprehensive/R28 Option Clients may select one or more of the following investment funds to invest in. The investment funds marked R28 are also available under the Comprehensive R28 Option. number name Risk level / Asset class Asset Management charge at benchmark Sanlam Life s 688 Balanced (Low Equity )R28 Cautious 0.24% 689 Balanced (Medium Equity) R28 Moderate 0.24% 690 Balanced (High Equity) R28 Moderately Aggressive 0.24% 691 Multi-Manager Balanced (Low Equity) R28 Cautious 0.58% 692 Multi-Manager Balanced (Medium Equity) R28 Moderate 0.58% 693 Multi-Manager Balanced (High Equity) R28 Moderately Aggressive 0.58% 642 SIM Reg28 Property Equity R28 Equity 0.30% 694 Diversified Wealth Builder R28 Moderately Aggressive 0.65% 695 Wealth Protecto r R28 Conservative 0.25% 757 NUR Balanced R28, see note 2 Moderate 0.95% 736 SATRIX Dynamic Balanced R28 Moderate 0.20% 816 Vesting Bonus R28 Cautious 1.34% Sanlam Investments unit trusts 682 SIM Active Income R28 Conservative 0.46% 628 SIM General Equity Aggressive 0.40% 636 SIM Managed Conservative Solution R28 Conservative 0.51% 637 SIM Managed Cautious Solution R28 Cautious 0.51% 638 SIM Managed Moderate Solution R28 Moderate 0.51% 639 SIM Managed Moderately Aggressive Solution R28 Moderately Aggressive 0.51% 640 SIM Managed Aggressive Solution R28 Aggressive 0.51% 696 SIM Bond Plus Fixed Interest 0.23% 626 SIM Balanced R28 Moderate 0.40% 629 SIM Money Market R28 - see note 1 Cash 0.23% 684 SIM Global Best Ideas Feeder Equity 0.86% 641 SIM Inflation Plus R28 Cautious 0.40% 697 SIM Low Equity R28 Cautious 0.86% 627 SIM Value Aggressive 0.68% 807 SMMI Cautious Solution R28 Cautious 0.74% 808 SMMI Moderate Solution R28 Moderate 0.74% 809 SMMI Moderately Aggressive Solution R28 Moderately Aggressive 0.74% 3

4 number name External unit trusts Risk level / Asset class 681 Absa Absolute R28 Cautious 0.97% 620 Allan Gray Equity Equity 1.54% 621 Allan Gray Balanced R28 Moderate 0.91% 635 Allan Gray Orbis Global Equity Feeder Aggressive 1.71% 622 Allan Gray Stable R28 Cautious 0.91% 644 Coronation Balanced Defensive R28 Cautious 1.25% 645 Coronation Capital Plus R28 Moderate 0.97% 803 Coronation Property Equity Property 0.97% 630 Coronation Balanced Plus R28 Moderate 0.97% 643 Coronation Strategic Income R28 Conservative 0.51% 632 Coronation Top 20 Aggressive 0.68% 647 Foord Equity Equity 0.86% 680 Foord Balanced R28 Moderately Aggressive 0.86% 686 Investec Opportunity R28 Moderate 1.14% Sanlam Escalating s number name Risk level / Asset class 669 Sanlam Escalating - SIM Balanced R28 Cautious 0.28% 670 Sanlam Escalating - SIM General Equity Moderately Aggressive 0.28% 666 Sanlam Escalating - Allan Gray Balanced R28 Cautious 0.64% 665 Sanlam Escalating - Allan Gray Equity Moderately Aggressive 1.08% 675 Sanlam Escalating - Coronation Balanced Plus R28 Cautious 0.68% 672 Sanlam Escalating - Coronation Top 20 Moderately Aggressive 0.48% 850 Sanlam Escalating - Diversified Wealth Builder R28 Moderate 0.46% Asset Management charge at benchmark Expected average fee at benchmark The accredited broker funds are not included in this list. Notes: 1. This fund is not Regulation 28 compliant in terms of its Deed, but the fund manager is mandated to comply with Regulation 28 on a day-to-day basis. 2. The NUR Balanced is managed in accordance with Shariah compliant investment processes. Clients can switch at any time between any of the available investment funds. The first four switches in a plan year are free of charge. For each subsequent switch in a plan year, a transaction charge applies (currently R600). 4

5 Simple and transparent charge structure The Cumulus Flexi Retirement Plan have a simplified charge structure. There are explicit charges for the administration, asset management and advice. Administration charge For every contribution added, or for every rand of growth earned on the plan, the annual administration charge percentage can reduce, dropping to as low as 0.20% per annum. This charge is calculated on a monthly basis as a percentage of the combined fund value of the recurring and one-off payments, which means the percentage is divided by 12 to calculate the monthly amount. It is deducted monthly from the fund value by selling units to the value of the charge. value Standard version For Graduates version For Professionals version Core, Comprehensive/ R28 Comprehensive, Comprehensive R28 R0 1.45% p.a. 1.40% p.a. 1.35% p.a. R and above 0.20% p.a. 0.20% p.a. 0.20% p.a. For fund values between R0 and R , we determine the percentage to be used for the relevant fund value as an interpolation between the two percentages shown in the table above. For example: For a fund value of R the standard version, the administration charge applicable on the entire fund value is 1.20% per annum. When the fund value reaches R , the administration charge remains level at 0.20% per year. The administration charge is subject to a minimum rand amount that will be adjusted with inflation annually. The minimum administration charge is R30 per month for the Core Option and R40 per month for the Comprehensive/R28 Option. For stop order recurring payments, we will levy a payment charge of 3.5% of each payment. It will be subtracted from the payment before it is invested. There is no payment charge for debit order payments. A Regulation 28 administration charge of R10 per month will be levied if the Comprehensive option is chosen. This provides for monitoring the plan and, if necessary, ensuring that the plan is adjusted to be Regulation 28 compliant. The charge is increased annually to allow for inflation. It is deducted monthly from the fund value by selling units to the value of the charge. If the client changes to Comprehensive R28, this charge will not apply in future, and vice versa. Asset management charge An asset management fee is charged by an asset manager. This asset management charge for each fund is taken into account when the daily unit price is calculated. It is a percentage of the plan s part of the market value of the assets in the fund. This charge is calculated on a daily basis, which means the percentage is divided by 365 to calculate the daily amount. Asset management discount Some asset managers provide a discount on their asset management charge. We use clean fee classes where available or alternatively use the rebates we receive to reduce the asset management charge by buying extra units for your client. The size of the discount differs between investment funds and can change over time. 5

6 Investment guarantee charge The Sanlam Escalating funds offer an underlying investment guarantee for which an investment guarantee charge of 1.00% per annum will be levied. This charge is a percentage of the fund value. It is taken into account when we calculate the daily price of the units. Initial Marketing charge This charge is dependent on the level of the intermediary remuneration negotiated. For recurring contributions it ranges from 0% % of each payment, for one-off contributions it ranges from 0% % if own funds and from 0% % if approved funds. This charge will be subtracted from the applicable recurring and one-off contributions before the contributions are invested. Termination and alteration charges No charges will be levied for early retirement, termination or if payments are reduced or stopped. There is also no transaction charge applicable for any of these events. Intermediary remuneration Payment-based fee Recurring contributions This can be negotiated from 0% - 5% of each recurring contribution. This applies to new business and increases, whether at the client s request or due to contractual payment increases. For recurring contributions it is paid annually in advance and vests proportionally according to the frequency of the payment. This means that it will be proportionally clawed back if the plan lapses, or if the recurring contributions are reduced or stopped. The payment-based fee may be renegotiated at any time during the term. One-off contributions Own funds (voluntary contributions): 0% to 3% initial commission of the one-off contribution Approved funds (compulsory contributions): 0% to 1.5% initial commission of the one-off contribution If the source of the one-off contribution is another retirement annuity (i.e. a Section 14 transfer), no initial commission is allowed. -based fee (Comprehensive/R28 Option only) This can be negotiated from 0% 1.14% per annum of fund value. The maximum fund-based fee is dependent on the level of payment-based and initial commission negotiated. If a fund-based fee is negotiated on the plan, it will be deducted monthly from the fund value by means of a withdrawal to the value of the fee. This withdrawal will be taken by cancelling units which will be disclosed in your clients annual benefit statements. The fund-based fee may be renegotiated at any time during the term. 6 Application form: AEB2120 Product code: R10C V /2015