GLACIER INTERNATIONAL

Transcription

1 GLACIER INTERNATIONAL Glacier International was launched in October 2010 to provide direct international investment solutions to financial planners (intermediaries) and their investors, and focuses on: amnestied money already invested internationally including via structures such as international trusts and companies which represent at least 70% of the target market. the R4 million individual foreign investment allowance which makes up the other 30% of the market. These investors are typically high net worth and solutions have to cater for large (+/- R R ) discretionary lump sum investments. Bermuda The administration of the Glacier International offering has been outsourced to partners in Bermuda. Sanlam Life Limited Bermuda Branch (SLLBB): managed by Kane (Bermuda) Limited, was previously known as HSBC Insurance Management (Bermuda) Limited. Master insurance policy: Kane SAC Limited (different division) Administrator: Kane (Bermuda) Limited (different division) Fund Trading: HSBC Trinkaus & Burkhardt AG; AFS Futures trading: Goldman Sachs Risk management Milliman P²Strategy investment option design, front end interface (web based) and marketing support: P² Group Custodian: HSBC Bank Bermuda Limited The above partners were selected after detailed due diligence and for reasons that may be summarised as follows: Experience and proven track records in their respective fields An integrated service model designed to offer sufficient and effective implementation Exclusivity Affordability Speed to market A LICENSED FINANCIAL SERVICES PROVIDER FOR INTERMEDIARY USE ONLY

2 The solution Glacier International offers two distinct products: Global Life Plan (GLP (B)) a Bermudian-linked life plan with access to investment choices denominated in foreign currency. The investment choices are collective investments funds (mutual funds), stockbroking services and investment options with P² Strategies which cushions investment values against increased volatility in equity and bond markets. Global Collection Plan (GCP (B)) a Bermudian segregated accounts company as nominee with each plan holder s assets in a separate account. Investment choices are collective investment funds denominated in foreign currency. Single discretionary allowance for foreign investment SA resident individuals can use their single discretionary allowance of R per calendar year for foreign investment purposes without having to obtain a tax clearance certificate from SARS. The forms to be completed by the client are the following: MP 1423 form Balance of payments (BOP) form True certified copy of the client s ID document The deposit can be made via electronic fund transfer. Once-off debit orders will not be accommodated. All accrued interest earned on the capital amount prior to the currency conversion will be paid to the investor s bank account details as indicated on the BOP form. Nedbank will send the client a certificate of income earned on interest and dividends (IT3b) annually. Process overview Complete the MP1423 and BOP forms together with the Glacier International application form and send the originals to Glacier International. Deposit South African Rands to the following account held with Nedbank: Account name: Sanlam Trust on behalf of Glacier Financial Solutions (Pty) Ltd Account number: Branch code: Glacier will open an interest-bearing Nedbank Corporate Saver account in the name of the client. Glacier will perform the currency conversion from South African Rand to the selected Foreign Exchange as indicated by the client on the BOP form. The Global Life Plan Sanlam Life Limited has registered a branch in Bermuda (SLLBB) and obtained a permit and long - term life insurance licence from the Bermuda Monetary Authority (BMA). The management and control of this branch will be the responsibility of a Branch Management Committee as approved by the Sanlam Life Limited Board. The day-to-day management of the branch has been outsourced to Kane (Bermuda) Limited, previously known as HSBC Insurance Management Limited. SLLBB issues Bermuda unit-linked life plans to successful applicants. SLLBB, as a branch of Sanlam Life Limited, issues contracts for insurance as a registered insurance company under the Long-term Insurance Act and is regulated by the Financial Service Board (FSB) in South Africa. Page 2

3 Administration The administration of this product is outsourced to Kane (Bermuda) Limited. The front office functionality is retained in South Africa via Glacier s dedicated International service team. All information is provided to Kane (Bermuda) Limited electronically for further processing. Glacier stores all original documentation in South Africa available for inspection for seven (7) years. This process is applicable for all instructions, i.e.: New business Ad hoc business Switches Withdrawals Surrenders Change of beneficiaries Death, etc. Product facts Feature Type Product name Product code Brand Currencies allowed Description Bermudian-linked life plan. Each plan consists of multiple contracts. Glacier Global Life Plan Bermuda (GLP(B)) ENOFB GLC (Glacier) USD/EUR/GBP Note: Any other currency will automatically be converted into the plan holder s reporting currency when paid into the above accounts. Initial five years (inception date + five years) restriction period applicable Plan term Inception date Note: After five years the plan is open-ended and continues automatically until the plan holder claims the proceeds or the last life insured dies. All the surrender and withdrawal restrictions expire after five years. When the initial/additional investment amounts and documentation are received, matched and accepted by SLLBB Benefits Death benefit on death of last life insured (plan value at death) Surrender/withdrawal benefit subjected to legal constraints Investment amounts frequency Initial Note: No recurring allowed. Page 3

4 Key options Option Description Ownership Natural persons International trusts International companies Foundations Multiple ownership Lives insured Nomination of ownership Nomination of beneficiaries Cessions Investment choice Liquidity Switches Phasing in Fees The plan requires at least one life insured, with a death benefit payable on the last death. All natural owners are lives insured. Allowed. If multiple owners, the nominee of ownership is used to replace an owner without having to withdraw the plan. Benefits are payable to all beneficiaries if there is no surviving life insured. The plan holder can cede the plan as collateral security and outright. Investment options consist of investment choices (mostly funds), stockbroking services and the ability to employ an investment strategy in a market environment with increased volatility. Multiple withdrawals are permitted depending on regulatory restrictions. Regular scheduled withdrawals are not available. Switches between investment choices and investment choice options may be enacted. Three, six and twelve month options are available on initial or additional investment amounts. From 0.65% per year, tiered down to 0.33% per year Page 4

5 Minimums and maximums Description Minimum or Maximum Initial investment amount Minimum USB/EUR/GBP Additional investment amount Minimum USB/EUR/GBP Withdrawal* Minimum USB/EUR/GBP Residual contract value on withdrawals and restricted surrender* Minimum ten percent (10%) of the original investment amount allocated to a specific contract Investment choice Minimum USD/EUR/GBP Number of switch forms Maximum four (4) free switch forms per annum (Glacier reserves the right to charge a fee of USD/GBP/EUR per switch form if excessive use is mad of this facility) Size of switches Minimum USD/EUR/GBP Ownership (Plan holders)** Lives insured Beneficiaries Maximum 10 *Subjected to restricted period rules Minimum 18 age next birthday Maximum 10, with oldest life insured to be no older than 90 at next birthday A restricted surrender is a surrender within the restricted period subject to the enforcement of the premium plus five percent (5%) rule. The only instance under which a full surrender could be possible within the restricted period would be when the surrender value is less than the original investment amount plus five percent (5%) compounded per annum. **No residents/citizens of the United States (or any of its territories) or Bermudian residents are allowed to invest in this product. As soon as an existing plan holder becomes a citizen of any one of these countries, the plan has to be surrender immediately. Page 5

6 Plan structure Each unit-linked life plan (plan) is made up of multiple contracts. A plan (new investment amount) reflects at inception on the website as being made up of 100 contracts, irrespective of the underlying investment choices. The picture below depicts the structure of a plan: PLAN (USD/EUR/GBP INVESTMENT CHOICES P2STRATEGIES Contracts USD DENOMINATED INVESTMENT CHOICE EUR DENOMINATED INVESTMENT CHOICE GBP DENOMINATED INVESTMENT CHOICE USD DENOMINATED INVESTMENT CHOICE EUR DENOMINATED INVESTMENT CHOICE GBP DENOMINATED INVESTMENT CHOICE Note: In this case Section 54 of the Long Term Insurance Act applies to all contracts. The plan holder can therefore do multiple withdrawals subjected to the premium plus 5% restriction. The result of this structure is that each plan holder has 100 withdrawals. In the event of a withdrawal from one of the underlying investment choices within the plan, the website counter is reduced by one (see example below). Example: USD/EUR/GBP investment amount = 1 plan = 100 contracts. Withdrawal of USD/EUR/GBP from any investment choice within the plan = minus 1 contract = 99 contracts reflecting on the website A plan is dominated in USD/EUR/GBP, the reporting currency (see Reporting Currency below for details). Investment amounts are received in USD, EUR, GBP, AUD and ZAR in the plan holder s account held by HSBC Bank Bermuda and Glacier with Nedbank. ZAR investment amounts are paid into the South African Nedbank account. All the terms and conditions apply to each contract and thus collectively to the plan. Reporting currency Each plan holder has to select a reporting currency when applying to invest in the Global Life Plan. The selection of reporting currency is compulsory and is made by the plan holder on the initial application. All correspondence to the plan holder will be in this currency. Lump sums received in any other currency than USD/EUR/GBP will be automatically converted into the plan holder s selected reporting currency before investing the money. Further currency conversions might be done in the plan should any investment choices selected be in a different denomination to that of the reporting currency. In all instances the exchange rate implications are borne by the plan holder. Page 6

7 The plan will be in the reporting currency, while the underlying investment choices are not limited to the selected reporting currency (USD/EUR/GBP). All plan benefits (death, withdrawal, surrender) are payable at SLLBB in the plan holders reporting currency. Note: Payments into the plan can be made in a currency other than the reporting currency. New contracts The following actions will result in a new contract after the initial investment was made: Switching from investment choices to P2strategy investment choices Switching to different investment funds within the P2strategy investment choice Switching into a new currency denominated investment choice (i.e. if a plan initially only has USD -denominated investment choices and a year later a switch instruction is given to switch to GBP - denominated investment choice) Legislation Section 54 of the Long Term Insurance Act (LTIA) applies to these plans. Each plan will be defined as having 100 underlying contracts and therefore Section 54 applies to each contract. According to Section 54, the following restrictions are applicable: Initial restricted period Number of withdrawals and surrenders allowed Restricted period Each plan s contracts has an initial restricted period of five years after which the plan is open-ended and no restrictions apply. Number of withdrawals and surrenders Withdrawals = partial surrender/encashment of the investment subjected to the contract minimum. During this period the plan holder can only make one (1) withdrawal limited to the original contract (investment) amount invested plus five (5) percent (%) compound interest per annum Note: See Minimum and Maximums for minimum amounts to remain in a contract when withdrawing. Surrender = full encashment of the entire investment. A complete surrender of the plan during the restricted period will not be accepted, unless the surrender value is less than the original investment amount PLUS five percent (5%) compounded per annum. Note: Beyond the restricted period a full surrender is allowed. System validations Section 54 validations The system does the following Section 54 validations per contract: The total withdrawal amount available on plan level Page 7

8 The number of withdrawals available on the plan The maximum withdrawal per contract (contract premium + 5% compound interest p.a.) Note: The above validations are not applicable to contracts affected by phasing in or contracts created as a result of switches. A minimum of 10% of the original investment amounts has to remain in each contract and/or USD/EUR/GBP per investment choice after a withdrawal at all times. An automatic switch to another contract or investment choice of similar denomination will occur should the value remaining in the contract be less than indicated above. A complete surrender (other than as a result of death) is not allowed during the five year restricted period. Plan value Each plan reporting currency value is determined as follows: The collective value of all the underlying contracts Each contract s value is determined by the market value at the last available price of each underlying investment choice in such a contract. The market value of the investment choices is determined as follows: on a daily, weekly or monthly basis, or any other valuation point at least quarterly (calendar quarter) value of the P2account in the case of P2strategies Note: The latest available price and exchange rate (if applicable) is used for all valuation actions. Surrender value Each plan s surrender value is calculated as follows: Plan value (as described above) LESS: any withdrawals and surrender charges accrued fees and tax not yet deducted Note: The surrender value is the actual value the plan holder receives upon withdrawal or surrender and can be based on the next available price. Plan holder (owners) This product allows for multiple owners. The following entities are allowed to invest in the GLP (B) product: Natural persons Minimum age: 18 next birthday International trusts International companies The investment amount payer and withdrawal payee is always the plan holder (i.e. plan owner). Page 8

9 If the plan holder is a South African entity, written approval from the South African Reserve Bank (SARB) is required before ownership is allowed, for example, on trusts. KYC and anti-money laundering requirements (FICA supporting documents) are applicable on each plan holder (owner). Note: All the FICA and AML requirements are indicated on the application form. Residents or Nationals of the United States of America (or any of its territories) or Bermudian Persons are not allowed to invest in this product. All instructions to change or service to a plan have to be on the appropriate form and signed by each plan holder on record. Nominee of ownership Nominee of ownership is allowed. In the case of multiple owners, the nominee of ownership is used to replace a joint/multiple owner without having to effect a withdrawal out of the plan. KYC and anti-money laundering documentation is required before a new owner is appointed on a plan. Multiple nominees may be appointed, with the required percentage indicated and will probably take into account the ownership percentage at the time. The new life insured (assuming he/she is an RSA resident) will acquire a foreign asset as contemplated in the Exchange Control Regulation (7), and is obliged to make a declaration in writing to the SARB. Note: SLLB have no exchange control reporting obligations. The nominee of ownership lapses when the existing owner cedes the plan outright. Lives insured A maximum of 10 lives insured per plan is allowed. All natural person plan holders are lives insured. In the case of a company, at least one of the directors of the company must be appointed. At least one of the trustees of a trust must be appointed. The product must have at least one (1) life insured per plan. Lives insured are selected on the initial application form and cannot be changed after the inception date of the plan. Lives insured that are not owners must co-sign the application form. New lives insured can be added subject to the maximum mentioned above. Lives insured cannot be removed by the plan holder. A death benefit is payable when all (the last) lives insured die (see Death benefit for more details). The death benefit is equal to the plan value. Plan benefit on death The benefit is calculated on the day SLLB receives written notification of the death of the last life insured. The benefit is equal to the plan value on finalising the claim. There is no guaranteed value on death. SLLB need the following documentation to perform this claim and affect the payment of a benefit: Page 9

10 Original certified copy of death certificate Original plan documentation Two payments are made, i.e.: Daily and weekly priced investment choices proceeds pay first Monthly priced investment choices proceeds pay second Should liquidation constraints pertaining to the dealings in investment choices prohibit the payment of proceeds, such payments will be paid as soon as the proceeds are received from the product provider. Note: No surrender fees are payable, but outstanding fees, commission, tax, etc., will still be deducted on the surrender of the plan on death. Beneficiaries A maximum of 10 beneficiaries can be nominated on the plan. The plan benefit is payable to all the beneficiaries in proportion as indicated in the plan application form in the event of no surviving plan holder or lives insured. The plan holder(s) can change the beneficiary nomination on the plan any time. Beneficiary nominations will automatically cancel when: the plan is ceded outright. the plan is surrendered. Note: The beneficiaries have to provide the necessary FICA documentation (KYC & AML) before SLLBB accepts the claim. Beneficiaries can be changed at any point during the plan by completing the relevant forms and sending it to the Glacier head office for consideration by SLLBB. The beneficiaries will require a foreign asset as contemplated in exchange Regulation 7, and will be obliged to make a declaration in writing to SARB when receiving the benefit. Note: SLLB have no exchange control reporting obligations. Cessions The plan holder can cede his/her plan as follows: Cession for security Outright Cession for security This allows for the recognition of interest in the proceeds of the plan and does NOT change ownership. The cessionary only has the first right to the proceeds of the plan. This cession takes preference over the beneficiary nomination. All transactions (switches, withdrawals or surrenders) have to be approved by the party whose financial interest is registered under the cession. Should the granting of financial assistance (a security cession is financial assistance) not occur in South Africa, exchange control regulations will not be an issue with regard to the security cession. Therefore, neither the plan holder, nor SLLB is obliged to report to SARB regarding the session. Page 10

11 Should the security be realised and a South African resident become the (new) plan holder, he/she must comply with Exchange Control Regulation 7. Outright cession This cession results in a change of ownership. Due to this reason there is a capital gains tax event, as well as compliance implications. The new plan holder uses his/her foreign currency investment allowance and therefore requires the necessary tax clearance. The new plan holder has to provide the necessary KYC and anti-money laundering documentation. Cancellation of plan (cooling off period) The plan holder can cancel the plan within 30 days of receipt of the plan document. The count starts on the day that the plan documents are sent to the plan holder(s) by Glacier South Africa. Note: This is not applicable in case of a continuation from an existing Jersey policy into this product. The plan holder(s) sends notification of the intention to exercise the cool off in writing to Glacier International s head office in Cape Town. The amount payable when cancelling the plan is equal to: the plan value (using the next available prices for all the underlying investment choices taking into account the exchange rate at the time of cool-off) PLUS the following amounts which were deducted from the original investment amount: - Commission (this will be cancelled in such a case) - Fees - Charges Note: The commission is cancelled and recouped from the intermediary. Score & MMC is reversed if it falls in the six-month claw back period. Investment options (See technical guide for more detailed information on this) This product makes provision for four options of investment choices, i.e.: Investment choices P2strategies Stockbroking services Navigate Investment choices These funds are made available based on Glacier International s investment philosophy and market demand. The investment philosophy is as follows: Foundation category = core Choice category = satellite The Glacier International Investment Constitution (GII Constitution) governs the investment choices made available via the Glacier International Investment Committee (GII Committee). Valuation of investment choices All the funds within the investment choice are valued on a daily, monthly or quarterly basis by the respective investment managers. This information is available on the respective fund fact sheets. Page 11

12 P2strategies These are funds selected by Milliman (independent actuarial firm) on a quantitative basis focus on two main factors, i.e.: Alpha Correlation of 95% to the indices that best map the exposure of the collective investment scheme All selected funds are combined with a trading account known as the P2account. There are three different choices available: Funds with P2strategies can be selected by plan holders in isolation or in combination. The fee is 0.45% per year. Glacier Portfolios with P2strategies = solutions managed by Milliman, form the P2funds universe, on a dynamic asset allocation basis. The fee is 0.55% per year. The models include: - Cautious - Moderate - Aggressive Personalised Portfolios with P2strategies = solutions which the plan holder can customise by selecting the funds that make up the solution from the P2funds universe, managed by Milliman on a dynamic asset allocation basis. The fee is 0.65% per year. Plan holders may choose between: - Cautious Moderate Aggressive Note: Refer to the Glacier International Technical Guide for more detail regarding these investment choices. Wrap funds Glacier International will offer external wrap funds. Stockbroking services Pictet Founded in 1805 in Geneva, today Pictet & Cie is one of Switzerland s largest private banks, and the leading independent asset management specialist in Europe. Pictet managed portfolio Pictet manages the portfolio based on a selected investment profile. The client must complete the Pictet Asset management mandate document. Pictet non-managed portfolio The client may appoint an intermediary to manage their Pictet portfolio. Only FSB (category II) registered intermediaries are allowed to manage portfolios. KYC documents are required for the intermediary. The client must complete the Pictet third party management mandate. Standard Bank Discretionary Standard Bank manages the portfolio based on a selected investment profile. Page 12

13 Non-discretionary The client may appoint an intermediary to manage their Standard bank portfolio. Only FSB (category II) registered intermediaries are allowed to manage portfolios. KYC documents are required for the intermediary. The client must complete the Standard Bank third party management mandate Collins Stewart Discretionary Collins Stewart manages the portfolio based on a selected investment profile. Execution only The client may appoint an intermediary to manage their Collins Stewart portfolio. Only FSB (category II) registered intermediaries are allowed to manage portfolios. KYC documents are required for the intermediary. The client must complete the Collins Stewart third party management mandate. Savoy Investment Management Limited (Only available to the NFB Brokerage) Discretionary Savoy manages the portfolio based on a selected investment profile. Advisory Managed Savoy provides advisory services to clients, but will manage the portfolio on a discretionary basis. Advisory Non-managed Savoy provides an advisory service to clients, but the portfolio will be managed by the client or the intermediary as appointed in the third party mandate. Execution only The client may appoint an intermediary to manage their Savoy portfolio. Only FSB (category II) registered intermediaries are allowed to manage portfolios. KYC documents are required for the intermediary. The client must complete the Savoy third party management mandate. Detailed guidance notes and brochures for Stockbroking Services are available on Navigate Navigate is a highly guided list of fund choices to help simplify international investments. These daily traded, actively managed funds have been selected from local and international companies with strong histories and performance records. Funds in the Navigate range have been grouped together in Cautious Managed, Moderate Managed and Global Equity buckets. A risk profiling questionnaire is available to assist the client to select the most appropriate fund(s). The funds are offered at a very competitive net administration fee of 0.3% (including custodian fees). Navigate offers the client the following: A simplified, easy to understand selection of investment choices Page 13

14 Assistance in determining an investor s risk profile Cost efficiency Simplified implementation no tax clearance certificates are required for investments less than R Offered within the Global Life Plan Accessing navigate Complete the risk profiling questionnaire, if required. It is available on Glacier ICE or on the Glacier International website. Complete a Navigate quote and generate a Navigate application form online. Submit the application form and supporting documentation. Once invested the account will be accessible online at all times. Bulking and dealing The administrator bulks all dealing transactions with the providers of the investment funds, where possible. Cut-off times apply to all dealing transactions of investment funds and are available on the fund fact sheets. Time of request: By 13:00 EST = processed that day and included in the following business day s bulk dealing transaction for execution. After 13:00 EST = processed on the next available business day. Note: EST (Eastern Standard Time EST is five hours behind Coordinated Universal Time (UTC)). Most places observe daylight savings time/summer time during summer and are therefore using EST instead in the summer). Each fund has its own cut-off time (typically dependent on its domicile) in the market. In most instances execution will take effect on the dealing transaction date. Should the cut-off time of a particular fund be missed, the trade will take effect the following day and the plan holder receives the next day s price. Investment mandate The plan holder(s) can indicate on the application form should he/she/they want to give the financial planner discretionary to do switch transactions on his/her/their behalf. The plan holder(s) can only give such a mandate to Financial Planners who are registered as discretionary Financial Service Providers (category 2) with the FSB. These financial planners are then allowed to effect switches on behalf of the plan holder(s) on the relevant plan without further consent from the plan holder(s). Glacier s consultant will check if the applicable Financial Planner has the necessary registration with the FSB. Commission, fees and charges Financial intermediary commission Financial Intermediary can negotiate the following types of commission: Initial commission Annual advice fees Page 14

15 Initial commission The Financial Planner can negotiate a maximum initial commission of 3% (VAT exclusive) on initial and additional investment amounts. Commission is payable after the application is accepted by SLLBB. Note: Initial commission is calculated in the reporting currency of the plan. The following two options are available: Features of Option Extra Fees Commission Currency Option A Initial negotiated commission is deducted before the money is invested Negotiated up to 3% The amount invested is the lump sum LESS initial commission Surrender fee: 1% of investment amount If full surrender within first three years Onshore (ZAR) or Offshore (USD/EUR/GBP) not available for Sanlam Advisers Note: The same currency must be used for all commission payments. Option B Initial commission is funded The full investment amount is invested (100% plus difference of negotiated commission is invested) Negotiated up to 3% The initial commission plus the enhanced allocation is recouped within the first 3 years in 36 equal amounts (monthly in arrears) Surrender fee: % of investment amount If full surrender within first three years Plan year Surrender fee Year % Year % Year % Thereafter 0.00% Onshore (ZAR) or Offshore (USD/EUR/GBP) not available for Sanlam Advisers Note: The same currency must be used for all commission payments. Note: Commission payments are made weekly or monthly as indicated by the financial planner s contract. Payment of commission Offshore: If the commission is payable offshore (USD/EUR/GBP); commission is paid directly into the financial intermediary s international bank account. This option is only available to intermediaries who are registered as VAT Vendors. Onshore: If the commission is payable onshore (ZAR); commission is paid to the financial intermediary via AGT. Annual advice fee Financial intermediaries can negotiate a maximum annual advice fee of 1% with the plan holder. This fee is calculated in the plan holder s reporting currency on the 15 th day of every month on the value in the plan. The fee is paid monthly in arrears to the financial intermediary in either South African (ZAR) or foreign (USD/EUR/GBP) currency. Onshore (ZAR) payments via AGT as described above. Page 15

16 Offshore (USD/EUR/GBP) payments directly into the financial intermediary s international bank account. Offshore payments will be bulked until the amount is equal to USD/EUR/GBP500 before the payment is made to the intermediary. Note: Financial Intermediaries can only have his commission paid onshore or offshore not both. Sanlam Financial Advisers (SFA) can only receive their commission onshore. Additional investments Should the intermediary negotiate a different fee than the initial investment fee on an additional investment for the same plan holder; the new negotiated fee will apply on all plans going forward. Change of annual advice fees Increase plan holders have to confirm this in writing Decrease financial planners can request without consent from the plan holders Glacier fees Initial fees No initial product fees are levied by Glacier. Annual administration fee Glacier s annual administration fee is calculated on the value of the plan on a tiered scale (see table below). The fee is calculated on the 15 th of each month (or the first working day thereafter), according to the fee band below. All Plan Value Level USD/EUR/GBP Glacier Annual Administration Fee (tiered i.e. on USD/EUR/GBP 1 basis) P2funds (Single Funds) P2portfolios P2portfolios Personalised Investment Choice plus P2strategy extra fee (included in the figures above) N/A Other* N/A N/A N/A 0.10 *Other is an additional fee levied for custody and trading by Glacier. Note: The above fees are the total fee. The fees are applied on a client level, i.e. plan holders with multiple plans have the benefit of a price based on the sum of all their plan values. Page 16

17 Fee calculation The applicable annual administration fee is determined for each calendar quarter based on the plan value as of the end of the previous calendar quarter and applied for the next three months. Example (of a plan with P2funds only): If the plan value at the end of the quarter is $ the administration fee for the next three months is 0.98 see part in bold in table below. If a band is crossed, the administration fee will be adjusted up or down on all the underlying contracts within the plan. The new adjusted fee applies for the next quarter on all underlying contracts whereupon the combined plan value is reviewed again. Note: The Glacier Annual Administration fee will be calculated on the plan value of all the plan s that the plan holder has. If the plan holder invests in another plan and the total of the plans places the plan holder in another fee bracket he/she will receive the advantage of the lower fee. Fees will therefore not be paid according to plan value, but according to the total value of all his plans. Fee recovery Fees are recovered as follows: If daily priced funds: fees are deducted on plan level proportionately from all daily priced investment choices. If no daily priced funds: Plan holders have to invest at least 5% of the investment amount or plan value in a USD/EUR/GBP Sanlam Money Market Fund, denominated in the same denomination as the reporting currency on the plan. If there are not sufficient funds in the Money Market fund, an automatic switch is executed to transfer funds to the Money Market funds. Note: These switches will not result in a new restricted period and the switch restriction will not apply. DIF and score The DIF and score are as follows: DIF = 0.50% Score = 0.85% If score and DIF are paid on the investment and the plan holder makes a withdrawal within six (6) months of the investment date, a calculation is done to determine the percentage that must be clawed back. Switching fees Free switch forms are limited to a maximum of four (4) per annum. Should the plan holder exceed this level, Glacier reserves the right to: charge a US$50 switch form fee. limit amount of switch forms. suspend switches. Investment choice charges Investment choices consist mostly of collective investment funds on which no initial charges are levied. Page 17

18 Annual charges are deducted by the providers and are included in the unit price provided by the providers. Performance charges might be levied on some investment funds. Taxation Income tax The tax rate in Bermuda is 0% and is levied on the proceeds of the plan in the hand of the plan holder(s). CGT A CGT event is triggered when the plan holder does either a withdrawal or surrender on the plan. CGT in the case of a full surrender is calculated as follows: The current CGT rates applicable are as follows: Individual Policy Holder Fund = 7.5% (30 25%) Company Policy Holder Fund = 14% (28 50%) Original documentation The plan holder has to forward the original documentation to Glacier s head office in Cape Town. Glacier stores these documents for seven years following the date of termination of the plan and the BMA can check this from time to time. An electronic version of the documentation is send to Kane via , as they need that to adhere to the plan holder s requests. Compliance All the documentation (plan, application form, etc.) has to comply with Bermuda Insurance Legislation. Note: See one pager on KYC and Anti Money Laundering requirements. Forms The following forms are Glacier branded and available on this product: Glacier application form (New Business)* Investment choice booklet indicating the percentage allocated to each investment choice* Terms and conditions Compulsory quote including*: - Risk warnings* - Fund Fact Sheets* - South African Rand Annexure - MP1423 if applicable - Form for tax clearance if applicable - BOP forms, etc. Switch form including*: - Risk warnings* - Fund Fact Sheet* Bulk switch form Withdrawal form - For partial withdrawals and full surrenders Page 18

19 Intermediary maintenance form Beneficiary form - To add or delete beneficiaries Plan holder maintenance form - To change plan holder s personal details - Life insured form - Nominee of ownership form *All these forms have to be signed by all the plan holders and intermediary Plan holder documentation The plan documents are issued by SLLBB. The plan holder receives the following documentation from the Glacier head office in Cape Town: Plan holder confirmation - Welcome letter (with information on the communication procedures) - Plan holder and investment confirmation - Terms and conditions Plan valuations - Available via a web interface - One paper copy per annum (end of February) Quotations A signed quotation with the application form is compulsory. The plan holder(s) also has to sign the following documentation as part of their quote and application: Risk warnings Fund Fact Sheets The quotation is available on the Glacier International website and not via Glacier s quote system (GQS). Statements The plan holder will see the following information on his/her Glacier statement: That he/she has a Glacier Global Life Plan The plan number A note for the plan holder to visit the Glacier International website for more statement detail on the Glacier Global Life Plan Plan values (end of September) Note: Glacier International and Glacier s contact centre have access to the plan holder s statements via the website to assists plan holders with queries. Website Access to the Glacier International website is available through the following entry points: Broker web Plan holder web Secure Services Page 19

20 Inpulse All secure service users have to register on the Glacier International website and obtain a password to be able to access plan holders information. Registration on the web Brokers who receive initial access via Glacier will use the following process: Web access o Initial access (brokers only): Step Action 1 Glacier submit brokers details 2 Intermediary is notified via with temporary ID 3 Intermediary log on to website and initiate registration process using temp ID 4 Confirms log on and a temporary Username & password to intermediary 5 Intermediary log on by using temp username & password 6 Intermediary completes registration process Intermediaries who did not receive initial access: Web access o No Initial access: Ste Action 1 Access the registration form on the Glacier International website 2 Complete the registration form 3 Submit the form to Glacier HO in CPT (via /fax) 4 Glacier forward registration form via the internet 5 Intermediary receives an confirming his/her registration 6 Intermediary log on to the website Page 20

21 Transactions allowed The following transactions will be allowed on the plan: New Business Additional investments Switches Phasing-in Cessions Partial withdrawals Full surrenders Note: See high level process at end of document. Transactions not allowed The following transactions are not allowed to be executed on the Glacier Global Life Plan: Unit transfers Income (regular withdrawals) Debit order The Global Collection Plan (GLP (B)) Glacier Financial Holdings Limited incorporated and registered a Segregated Accounts Company (SAC), Glacier Bermuda Limited, in Bermuda as a hundred percent (100%) subsidiary. The SAC provides each plan holder with a segregated account from where investments into collective investments can be made. This segregated account is created once a client has signed a mandate with Glacier Financial Solutions Limited, a registered Financial Services Provider (FSP) in South Africa. Administration The administration of this product is outsourced to Kane (Bermuda) Limited. The front office functionality is retained in South Africa via Glacier s dedicated International service team. All information is provided to Kane electronically for further processing. Glacier stores all original documentation in South Africa available for inspection for seven (7) years. This process is applicable for all instructions, i.e.: New business Ad hoc business Switches Withdrawals Page 21

22 Product features Feature Product type Product name Products allowed Currencies allowed Plan term Inception date Premium frequency Recurring investments Description Bermudan segregated accounts company owned by Glacier Financial Solutions (Pty) Limited Glacier Global Collection Plan Investment Plan USD/EUR/GBP Note: Any other currency will automatically be converted into the plan holder s reporting currency when paid into the plan holder accounts No term applicable open ended When investment amount and documentation are received, matched and accepted by SAC. Single premiums Note: No recurring premiums allowed Not allowed Minimum investment amount USD/EUR/GBP Minimum additional amount USD/EUF/GBP Key options Feature Description Ownership* Natural persons International trusts International companies Foundations Multiple ownership Cessions Investment choice Liquidity Switches Phasing-in Fees The plan holder may cede the entire plan as collateral security or outright. Investment options consist of investment funds. Withdrawals are allowed depending on the liquidity of the underlying investment choice. Regular scheduled withdrawals are not allowed. Switches between investment choices may be enacted. Three, six and twelve month options are available on initial or additional investment amounts From 0.60% per year * Residents or Nationals of the United States of America (or any of its territories) or Bermudan Persons are not allowed to invest in this product. Plan must be surrendered if the owner becomes a citizen of United States of America or Bermuda. Page 22

23 Minimums and maximums Description Minimum or Maximum Initial premium Minimum USD/EUR/GBP Additional premium Minimum USD/EUR/GBP Repurchases Minimum USD/EUR/GBP Minimum plan value USD/EUR/GBP Investment choice Minimum USD/EUR/GBP Number of switch forms Maximum four (4) free forms per annum (Glacier reserves the right to charge a fee of US$ 50 per switch form in extreme situations) Size of switches Minimum USD/EUR/GBP Reporting currency Each plan holder has to select a reporting currency when applying to invest in the Global Collection Plan. The selection of reporting currency is compulsory and is made by the plan holder on the initial application. All correspondence to the plan holder will be in this currency. Lump sums received in any other currency than USD/EUR/GBP/ZAR will be automatically converted into the plan holder s selected reporting currency before investing the money. Further currency conversions might be done in the plan should any investment choices selected be in a different denomination than the reporting currency. In all instances the exchange rate implications are borne by the plan holder. All plan benefits are payable at SAC in the plan s reporting currency. Note: Payments into the plan can be made in a currency other than the reporting currency. Plan value Each plan reporting currency value is determined as follows: The collective value of all the underlying investment choices Each contract s value is determined by the market value at the last available price of each underlying investment choice in such a contract. The market value of the investment choices is determined as follows: on a daily, weekly or monthly basis, or any other valuation point at least quarterly (calendar quarter) Note: The latest available price and exchange rate (if applicable) is used for all valuation actions. Repurchases Repurchases can be requested subjected to the minimums and maximums indicated in the table above. Plan holders need to choose a target investment choice for withdrawal purposes. Page 23

24 Proceeds from withdrawals are paid in the plan holder s reporting currency at SAC. Proceeds are allowed to be paid in ZAR on the plan holder s request. Note: See the fund s prospectus for the terms and conditions on withdrawals and surrenders on each individual investment fund. Plan holder (owners) This product allows for multiple owners (maximum 10). The following entities are allowed to invest in the GCP (B) product: Natural persons - Minimum age: 18 next birthday International trusts International companies Note: Residents or Nationals of the United States of America (or any of its territories) or Bermudan Persons are not allowed to invest in this product. The investment amount payer and withdrawal payee is always the plan holder (i.e. plan owner). If the plan holder is a South African entity, written approval from the South African Reserve Bank (SARB) is required before ownership is allowed. KYC and anti-money laundering requirements (FICA supporting documents) are applicable on each plan holder (owner). Note: All the FICA and AML requirements are indicated on the application form. Trusts and company requirements are different and are indicated as such on the application form. See FICA one pager for a summary of supporting documents. All instructions to change or service to a plan have to be on the appropriate form and signed by each plan holder on record. Cessions The plan holder can cede his/her plan as follows: Cession for security Outright Cession for security This allows for the recognition of interest in the proceeds of the plan and does NOT change ownership. The cessionary only has the first right to the proceeds of the plan. All transactions (switches, repurchases) have to be approved by the party whose financial interest is registered under the cession. Should the granting of financial assistance (a security cession is financial assistance) not occur in South Africa, and exchange control regulations will not be an issue with regard to the security cession. Therefore, neither the plan holder, nor SAC is obliged to report to SARB regarding the session. Should the security be realised and a South African resident becomes the (new) plan holder, he/she must comply with exchange control Regulation 7. Page 24

25 Outright cession This cession results in a change of ownership. Due to this reason there is a capital gains tax event as well as compliance implications. The new plan holder uses his/her foreign currency investment allowance and therefore requires the necessary tax clearance. The new plan holder has to provide the necessary KYC and anti-money laundering documentation. Cancellation of plan (cooling off period) The plan holder can cancel the plan within 30 days of receipt of the plan document. The count starts the day the plan documents are sent to the plan holder(s) by Glacier South Africa. The plan holder(s) sends notification of the intention to exercise the cool off in writing to Glacier International s head office in Cape Town. The amount payable when cancelling the plan is equal to: The plan value (using the next available prices for all the underlying investment choices taking into account the exchange rate at the time of cool-off) PLUS the following amounts that was deducted from the original investment amount: - Commission (this will be cancelled in such a case) - Fees - Charges Note: The commission is cancelled and recouped from the intermediary. Investment options FSB approved Collective Investment Schemes are available within the Global Collection Plan. Investment choices These funds are made available based on Glacier International s investment philosophy and market demand. The investment philosophy is a follows: Foundation category = core Choice category = satellite The Glacier International Investment Constitution (GII Constitution) governs the investment choices made available via the Glacier International Investment Committee (GII Committee). Valuation of investment choices All the funds within the Investment Choice are valued on a daily, monthly or quarterly basis by the respective investment managers. This information is available on the respective fund fact sheets. Wrap funds Glacier International will offer external wrap funds. Page 25

26 Bulking and dealing The administrator bulks all dealing transactions with the providers of the investment funds where possible. Cut-off times apply to all dealing transactions of investment funds and are available on the fund fact sheets. Time of request: By 13:00 EST = processed that day and included in the following business day s bulk dealing transaction for execution. After 13:00 EST = processed on the next available business day. Note: EST (Eastern Standard Time EST is five hours behind of Coordinated Universal Time (UTC)). Most places observe daylight savings time/summer time during summer and are therefore using EST instead in the summer). Each fund has its own cut-off time (typically dependent on its domicile) in the market. In most instances execution will take effect on the dealing transaction date. Should the cut-off time of a particular fund be missed, the trade will take effect the following day and the plan holder receives the next day s price. Investment mandate The plan holder(s) can indicate on the application form should he/she/they want to give the financial planner discretion to do transactions on his/her/their behalf. The plan holder(s) can only give such a mandate to financial planners who are registered as discretionary Financial Service Providers (category 2) with the FSB. These financial planners are then allowed to affect switches on behalf of the plan holder(s) on the relevant plan without further consent from the plan holder(s). Glacier s consultant will check if the applicable Financial Planner has the necessary registration with the FSB. Commission, fees and charges Financial Intermediary commission The financial intermediary can negotiate the following types of commission: Initial commission Annual advice fees Initial commission The Financial Planner can negotiate a maximum initial commission of 5% (VAT exclusive) on initial and additional investment amounts. Commission is payable after the application is accepted by SAC. Note: Initial commission is calculated in the reporting currency of the plan. Commission is deducted upfront from the investment amount upon acceptance of the application by SAC. The initial investment amount minus the commission is allocated to the plan. Payment of commission Commission can be paid in South Africa (onshore) or offshore. The same option has to be executed on all plans. Page 26