The Canada Life Fixed Term Deposit Fund

Transcription

1 The Canada Life Fixed Term Deposit Fund A new investment option for single premium investment or pension contributions Available up to 25th June 2012, with investment returns provided by EBS Limited Ë Ë Ë The Canada Life Fixed Term Deposit Fund (the Fund ) aims to combine medium/high risk with the opportunity to earn a competitive rate of interest. The Fund provides investment returns linked to deposits with EBS Limited. The Fund will invest in deposits with EBS Limited on 29th June 2012, earning a fixed rate of interest of 5.00% gross Annual Equivalent Rate ( AER ) * until 28th June This equates to a total gross return, before charges, of 27.63% over the 5-year investment term **. Canada Life has entered into a contract with EBS Limited to provide the investment returns described in this brochure. Canada Life does not provide any guarantees in relation to the Fund. Please see section Counterparty risk on page 4 for further details. Introductory special offer for all new eligible single premium policies investing in the Fund: Canada Life will increase the AER on new eligible single premium policies by an additional 0.15% gross, to 5.15% gross AER. This equates to a total gross return, before charges, of 28.54% over the 5-year investment term. Warning: The Canada Life Fixed Term Deposit Fund is fully exposed to any counterparty risk (see pages 3 and 4) and restricts access to the investment for a period of 5 years in order to achieve a competitive rate of interest on your single premium investment or pension contribution. * The interest rates quoted in this brochure are before any annual management charges or other deductions are made to your policy. Please refer to the product brochure for further information on the charges relating to your policy. ** Investment term means the 5-year period from 29th June 2012 to 28th June You will not be able to access your investment in the Fund before 28th June 2017.

2 2 Fixed Term Deposit Fund Canada Life Fixed Term Deposit Fund Description The Canada Life Fixed Term Deposit Fund (the Fund ) is a new fund option available to single premium investments on a selection of Canada Life pension and investment products. Objectives The Fund provides investment returns linked to deposits with EBS Limited. The Fund will invest in deposits with EBS Limited on 29th June 2012, earning a fixed rate of interest of 5.00% gross AER until 28th June This equates to a total gross return, before charges, of 27.63% over the 5-year investment term. Target market The Fund may be suitable for investors seeking an opportunity to earn a competitive rate of interest in exchange for medium/high risk and no access to their investment for a period of 5 years. Pages 3 and 4 provide more information on the risks within the Fund, in particular Counterparty risk. Warning: The value of your investment may go down as well as up. If you invest in the Fund you will not have access to your money before 28th June If you invest in the Fund you may lose some or all of the money you invest. The Fund is designed for people looking to invest for a period of at least 5 years. If you believe you may need access to your money before then, the Fund is not suitable for you. If you are a pensions investor and believe you may need access to your investment for early retirement or for any other reason before then, the Fund is not suitable for you. You must have at least 5 years prior to your retirement age to invest in the Fund.

3 3 Fixed Term Deposit Fund Key characteristics and features In accordance with terms agreed with EBS Limited, the deposits will earn interest at a rate equivalent to 5.00% AER over the 5-year investment term. This equates to a total gross return, before charges, of 27.63% over the 5-year investment term. As a special offer, Canada Life will increase the interest rate by an additional 0.15% AER for new eligible single premium policies over the 5-year term. This equates to a total return, before charges, of 28.54% over the 5-year investment term. In advance of the end of the 5-year investment term, Canada Life will write to you to inform you that the investment term of the deposits is ending and detailing the alternative funds that you may invest in at that time. Unless you choose otherwise, the value of your investment in the Fund will be automatically switched into the Canada Life/Setanta Liquidity Fund, or such other fund as Canada Life may nominate from time to time. The interest rates quoted in this document are before any annual management charges or other deductions are made. Please refer to the product brochure for further information on the charges relating to your policy. The Fund accepts medium/high risk together with a fixed 5-year investment term in order to achieve a competitive rate of interest on your investment. Risks associated with the Canada Life Fixed Term Deposit Fund This is a medium/high risk fund, and the value of your investment may go down as well as up. Canada Life does not provide any guarantees in relation to the Fund. You do not have a deposit with EBS Limited. In the event that EBS Limited does not meet its obligations to Canada Life, or the return from EBS Limited deposits is otherwise insufficient, the value of the Fund will be based on the value returned from the deposits with EBS Limited. The Fund may have a zero value if EBS Limited does not meet its obligations to Canada Life. No other assets of Canada Life will be used to make up any shortfall. The deposits with EBS Limited do not qualify for the Deposit Guarantee Scheme that currently applies to deposits placed directly by individuals with EBS Limited. Canada Life retains the right to amend the Fund, structure or investment strategy at any time.

4 4 Fixed Term Deposit Fund Counterparty risk The Fund will invest in deposits with EBS Limited for the entire 5-year investment term. EBS Limited is currently rated Ba2 by credit rating agency Moody s and BBB- by credit rating agency Fitch. Understanding credit ratings Credit ratings aim to address the possibility that a financial obligation will not be honoured as promised, in full and on time. Credit ratings can be a useful aid in determining the risk associated with a particular institution. You should bear in mind that, while these credit ratings are correct at the time of going to print, ratings are subject to change at any time. Moody s define Ba as Ba: Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk. Fitch defines BBB as BBB ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate but adverse business or economic conditions are more likely to impair this capacity. The graphic below shows the location of EBS Limited s credit rating on the spectrum of credit ratings of Fitch and Moody s respectively. Canada Life reserves the right to withdraw the Fund in advance of 29th June 2012 in circumstances including, but not limited to, any material adverse change in the security of the deposits offered by EBS Limited. In the event that the Fund is withdrawn, Canada Life will immediately transfer your investment in the Fund to the Canada Life/Setanta Liquidity Fund. Canada Life will then write to you requesting further instructions for your investment. EBS Limited is regulated by the Central Bank of Ireland. Registered Office: 2 Burlington Road, Dublin 4. Registered in Ireland no

5 5 Fixed Term Deposit Fund Charges An annual management charge will apply to investments in the Fund. The interest rates quoted in this document are before any allowance is made for the impact of this charge. The charge applicable to the Fund will be the standard annual management charge applicable to the product in which you are invested. Annual management charges are subject to change at any time. The maximum annual management charge on the Fund is currently 1.50%. Please see the appropriate product brochure for further information on charges relating to your policy. Taxes and levies Please refer to the product brochure for any tax charges that may relate to your policy, including the Pension Levy. Eligibility There are some other restrictions on the availability of the Fund. Your Financial Advisor will be able to give you full details. The Fund is available as a single premium investment only on the following Canada Life products: Requirements Maximum age for investment Minimum term to retirement Available to existing policies? Can other funds be invested in? Gateway Portfolio Approved Minimum Retirement Fund (AMRF) Available to New and Existing policies Advantage Plan and Advantage Personal Pension Standard Personal Retirement Bond Advantage 100 Personal Retirement Bond New policies only Advantage Plan and Advantage Executive Pension n/a n/a 5 years 5 years 5 years 5 years Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes No Income facility None n/a n/a n/a n/a n/a Minimum initial investment in the product Minimum investment in the Fund ł10,000 ł20,000 ł6,500 ł6,500 ł25,000 ł6,500 ł1,000 ł1,000 ł1,000 ł1,000 ł1,000 ł6,500 (and equal to 100% of the initial investment) The following will not be able to invest in the Fund. Regular premiums Premium increases Additional contributions

6 6 Fixed Term Deposit Fund Important information for pensions investors Please note that the investment returns explained in this document do not make any allowance for the Pensions Levy introduced in the Finance (No. 2) Act 2011 (which may be amended, increased, extended beyond 2014 or replaced in the future). The Pensions Levy requires Canada Life to deduct 0.6% of the market value of pension funds (including amounts invested in the Fund) as at 30th June for each of the years 2012 to 2014, and pay it to the Revenue Commissioners by 25th September each year. For each year the levy applies, Canada Life will deduct the levy amount from your pension fund and pay it to the Revenue Commissioners. The value of your policy will reflect any levy paid. Please talk to your Financial Adviser for further details. Due to the inability to access the Fund during the entire 5-year investment period, you must have at least 5 full years to your normal retirement age to invest in the Fund. You will not have access to your investment in the Fund, for early retirement or otherwise, during the 5-year investment period. Important information for new Gateway Portfolio investors The Finance Act 2009 introduced a 1% levy on premiums paid into life assurance and investment policies in respect of premiums received on or after 1st August If you invest in a Gateway Portfolio product this levy will be applied to your investment.

7 7 Fixed Term Deposit Fund Questions and answers Is the Fund suitable for me? In order to determine whether or not the Fund is suitable for you, you should pay particular attention to the following: No access to your investment in the Fund before 28th June 2017 You will not be able to access any part of your investment in the Fund prior to the end of the 5-year investment term. If you feel that you may need access to your money for any reason before then, the Fund is not suitable for you. There is a range of other products and funds provided by Canada Life that may be suitable for you, if you feel that you may need access to your investment during this time. EBS Limited may require up to an additional five business days after 28th June 2017 to remit deposits to Canada Life. This may delay your ability to access your investment in the Fund on 28th June Counterparty risk The investment returns in the Fund are provided by EBS Limited and not by Canada Life. Please see section Counterparty risk on page 4 for further details on the risks associated with investment in the Fund. Are there any product restrictions? As you will not be able to access your investment in the Fund during the 5-year investment term, investing in the Fund may impose restrictions on some of the policy benefits to which you are currently entitled. If you are investing in the Fund through a Gateway Portfolio policy, you will not be able to avail of the standard income withdrawal option during the investment term. Due to restrictions with the Fund, it is not possible to have any additional benefits attaching to your policy. Please refer to the supplementary policy conditions for further details on any product restrictions. Do I have access to my investment in the Fund before 28th June 2017? If you choose to invest in the Fund, you will not be able to access your investment in the Fund during the entire 5-year investment term. You will not be able to encash or switch any part of your investment out of the Fund prior to this date. In the event of the death of the policyholder(s), Canada Life will pay the policy value as at the first business day immediately following the date of notification of death, less any applicable taxation or other deductions and provided that funds are made available by EBS Limited.

8 Why choose Canada Life? The strongest life assurance group in Ireland Canada Life is the strongest life assurance group in Ireland. Established in 1903, the Canada Life Group has grown to be a modern and dynamic international financial services business. We are part of Great-West Life, one of the world s leading life assurance companies, from a country ranked the most financially sound in the world*. The Canada Life Group employs over 500 people in Ireland and serves as a hub for the company s expanding presence in Europe, providing financial and human resources services for the Irish and German businesses, as well as the IT data centre for the entire European Operation. Also based in Dublin are our European Information Services Division, providing the main data centre for all of our European businesses and the European headquarters of Canada Life Reinsurance, our international reinsurance business. * Source: World Economic Forum Important Information This document does not form part of any contract, with the exception of the removable Supplementary Declaration at page 8 and page 9 which does form part of your contract. For full details of all our products please refer to the specific product policy conditions. The information contained in this document is based on current legislation and is, therefore, subject to change. The contents are intended as a guideline only and should not be construed as advice or an interpretation of the law. While every care has been taken in the preparation of this document, Canada Life Assurance (Ireland) Limited accepts no liability whatsoever for any errors or omissions in the information contained herein or for any loss occasioned to any person acting or refraining from acting as a result of any statement in this document. You should always seek the advice of an appropriately qualified professional. Canada Life, Canada Life House, Temple Road, Blackrock, Co Dublin CANMU /12 T E customerservices@canadalife.ie W Canada Life Assurance (Ireland) Limited is regulated by the Central Bank of Ireland.

9 Please note: The below Supplementary Declaration is to be read in conjunction with the application form for your product and it forms part of your contract with Canada Life. Supplementary Declaration for Client(s) investing in the Canada Life Fixed Term Deposit Fund Please tick the relevant box below to identify whether this Supplementary Declaration relates to a new policy or a fund switch on an existing policy. New Policy Full fund switch on an Existing Policy Partial fund switch on an Existing Policy1 1 Please indicate the monetary amount, or percentage of your policy value, that you wish to invest in the Fund in the above box. Please complete the product application form 100% investment in the Fund This is an important document and will form part of your contract with Canada Life. It is important that you read through the following declarations carefully and only tick the boxes if you have understood and accept the statements in full. This is an important declaration as it will amend the terms and conditions that apply to your policy. Please speak to your Financial Advisor if you have any questions whatsoever in relation to the statements. Name of Policyholder Employee name (if applicable) Policy number (for fund switches on existing policies only) I understand that this Supplementary Declaration will form a part of my contract with Canada Life. I understand that where there is a conflict between the Policy Conditions relating to my policy and this Supplementary Declaration, this Supplementary Declaration will prevail. I confirm that I have read and understood the Canada Life Fixed Term Deposit Fund brochure and particularly in respect of the sections on Counterparty Risk. I understand and acknowledge that the investment returns are provided solely by EBS Limited and not by Canada Life. I understand that if EBS Limited does not fulfil its contractual obligations to Canada Life, I may lose some or all of my investment. I understand that I will not have access to any part of my investment in the Fund prior to 28th June 2017, for early retirement, transfer or otherwise, as described in the Canada Life Fixed Term Deposit Fund brochure. I understand that administrative restrictions relating to the remittance of deposits to Canada Life may result in delays of up to 5 business days. I understand that I may not be able to access my investment in the Fund until 5 business days after 28th June I understand that investment in the Fund may result in restrictions at a product level and that benefits, such as income withdrawal on certain products, will not be allowed during the 5-year investment term. I confirm that I have reviewed the generic pre-sale quotation provided by Canada Life and I understand that, as illustrated in that quotation, I will not be able to access my investment in the Fund during the 5-year investment term.

10 I understand that, if I am investing in the Fund through either an Advantage Plan Executive Pension or an Advantage 100 Executive Pension, I will require a new policy. I understand that I will not be able to use this new policy to invest in any other funds during the 5-year investment term. I understand that, if I have indicated on the application form that I wish to invest in additional funds beyond the Fund, I will require a second policy and I authorise Canada Life to issue a second policy and to use the single application form for both policies. I understand that the maximum age for investment in the Fund is 69 years for Gateway Portfolio and Approved Minimum Retirement Fund policies and 54 years for pensions. I confirm that I comply with these age restrictions. I understand that, at the end of the 5-year investment term, unless I choose otherwise, the value of my investment in the Fund will be automatically switched into the Canada Life/Setanta Liquidity Fund, or such other fund as Canada Life may nominate from time to time. I understand that no guarantees will apply to the fund and that the value of my investment in any such fund may go down as well as up. I understand that the investment returns quoted in this document are before any annual management charges or other deductions are made from my policy. Additional Declarations for Pensions Investors only I confirm that I will not require access to the proceeds of this policy prior to the 28th June I am aware that a penalty equal to 100% of the value of my investment in the Fund will apply at all times prior to the 28th June 2017 on transfer or early retirement, including early retirement in the event of ill health. I confirm that this investment in the Fund forms part of a sufficiently diversified pension portfolio to meet any requirements which I may have for access to pension benefits prior to 28th June Pensions Levy I understand that the Fund will be subject to the Pensions Levy introduced in the Finance (No. 2) Act 2011 (which may be amended, increased, extended beyond 2014 or replaced in the future). I understand that this levy will reduce the value of my policy. The above statements and declarations reflect the specific characteristics of the Fund. The Fund is not suitable for all investors and it is important that you do not complete or submit this application form if you not in a position to tick any of the boxes. I confirm that I have read and understood the above statements and declarations and confirm that my/our responses are accurate and correct. Signature of Policyholder Date Signature of Second Policyholder (if applicable) Date Canada Life, Canada Life House, Temple Road, Blackrock, Co Dublin T E customerservices@canadalife.ie W CANMU /12 Canada Life Assurance (Ireland) Limited is regulated by the Central Bank of Ireland.