Public Sector Long Term Savings Plan

Transcription

1 Public Sector Long Term Savings Plan Irish Life - Savings Made Easy Long Term Savings Plan Policy Document Terms and Conditions Please read this document carefully and keep it safe in your policy pack as it describes the terms and conditions of your Long Term Savings Plan and you will need to refer to it in the future.

2 Contents 1 Introduction - your long term savings plan product explained Page 2 2 Definitions - words and phrases explained Page 4 3 Contribution Payments Page 5 4 Funds and Unit Prices Page 6 5 Charges Page 8 6 Death Benefit Page 11 7 Cashing in part or all of your plan Page 12 8 Tax Page 13 9 Notices and Law Page 14 Contributions and Charges Page 15

3 Introduction 1 This Long Term Savings Plan is a contract between you (the person named in the schedule as the Contributor) and Irish Life Assurance plc ('we, us'). This contract takes the form of a Policy issued by Irish Life Assurance plc. You will find details of the policy in these terms and conditions, the schedule, the application form, and any extra conditions (endorsements) which we may add to it. Any conditions or extra rules we add in the future also form part of the policy and may only be added by authorised staff at our Head Office. Together they form the terms and conditions of the policy. We will pay benefits from our Head Office in Ireland, the Irish Life Centre, Lower Abbey Street, Dublin 1. All contributions and benefits under this policy will normally be paid in Euro. In legal disputes Irish law will apply. The only terms or conditions that are legally binding are those specified in our contract with you. In the event of extraordinary circumstances beyond our control preventing us from fulfilling our obligations to you or from doing so in a timely manner we are not liable for any loss, damage or inconvenience caused. More detailed information on all these matters are in the relevant sections of these terms and conditions. How does the policy work? This is a unit-linked contract. This means that in return for the contributions that are paid, (net of any applicable contribution charges as described in Section 4), units are allocated to your policy in one or more funds. The value of your policy is linked to the value of the units in your chosen fund or funds. The funds in which you have chosen to invest these contributions are shown in your schedule. Contributions can be altered as you wish over the term of the policy, subject to the minimum contribution restrictions explained in Section 3. Who receives the money we pay out? We will normally pay any benefits to you as the owner of the policy. If you die we will pay the person acting as the executor or administrator of your estate. Writing to us If you need to write to us about this policy, please address your letter to: Corporate Business Irish Life Assurance plc. Irish Life Centre Lower Abbey Street Dublin 1 2

4 Cooling-off period (your right to change your mind) If, after taking out this policy, you feel that it is not suitable, you may cancel it by writing to us at the above address. If you do this within 30 days from the date we send you your policy and personalised customer information notice, we will cancel your policy and your contributions will be refunded. We strongly recommend that you consult with your financial adviser before you cancel your policy. Complaints We will do our best to sort out complaints through our internal complaints procedure. If you are not satisfied after complaining to us, you can take your complaint to the Financial Services Ombudsman. You can get more information from: Financial Services Ombudsman 3rd Floor, Lincoln House, Lincoln Place, Dublin 2 Lo-call: Fax: enquiries@financialombudsman.ie Website: 3

5 Definitions 2 This section defines some of the words and phrases we use in the terms and conditions. Certain words and phrases used in this Terms and Conditions booklet have specific meanings, which might be different from the meaning they would have in general use. These words are shown in bold and listed below, together with an explanation of their meanings in relation to this plan. Application form - The application form provided in relation to the policy containing certain information. This definition includes information requested on the application form but which is provided in any other form. Dependant - your spouse/civil partner or child or any other person who depends on you financially immediately before your death. For this purpose a child includes a step-child or legally adopted child. Endorsement - if the terms and conditions of the policy are changed or are different to the standard terms, the new or amended terms or conditions will be set out in a separate document which will be attached to the policy. This is called an endorsement. Fund - any of the Long Term Savings Plan investment funds described in the panel of funds. Fund link - the fund or combination of funds in the panel of funds to which the policy is linked. Your initial fund link will be shown on your schedule. However, this may change in the future. Fund value - the policy s value at a point in time. We work this out as the number of units allocated to the policy multiplied by the investment price of the units of the funds. 4 Investment contribution - the percentage of the contribution that we invest for you as described in your policy schedule. Investment date - the date on which the contribution is received by Irish Life Assurance plc along with all necessary information to complete the investment. Investment price - the price of a unit of a fund, which we use to work out the value of the policy. This is the price we use when buying and selling units in the fund. Life covered - The person named on the plan schedule as the Contributor on whose death we will pay the death benefit. Panel of Funds - the panel of funds is listed in Section 4. Regular contributions - any regular contribution as shown in the schedule or otherwise paid according to the terms of this policy. It includes any increases in regular contributions (see Section 3). It does not include any single contributions paid on a one-off basis. Single contribution a contribution which is not a regular contribution. Schedule - the schedule that forms part of this policy. Start date of the policy - is the date of commencement stated in the schedule. Unit account - the number of units allocated to your policy in each fund. We, us, our - Irish Life Assurance plc. You, your - the person named as the Contributor in the schedule.

6 Contribution Payments 3 Regular contributions can be paid through your employer's payroll. Alternatively, your contributions can be made by direct debit from your bank account to Cornmarket Group Financial Services, who will forward them to us. The amount you pay is up to you. The minimum permitted amount for any contribution is 50, therefore the regular monthly contribution cannot fall below this. Each time a contribution is received by us we allocate units from one or more of the funds into the policy according to the terms of the fund link applying at that time (having allowed for any contribution charges, which are described in Section 5). We use the unit investment price of each fund to work out the number of units from each fund, which we will allocate in the policy. You may pay single contributions to us at any time. Single contributions must be paid through Cornmarket Group Financial Services. The minimum Single Premium payable is 2,000. In certain circumstances we may refuse to allow you to make a single premium contribution. However, if we do refuse we will tell you why. We will add units to your plan in respect of your single contribution based on the investment price of units on the investment date that is appropriate for your contribution. You can stop paying your regular contributions at any time. If you wish to stop paying contributions temporarily or indefinitely, you must notify Cornmarket 5 Group Financial Services or your employer. In both these cases, the plan will continue to be in force and annual management charges will continue to apply. You can choose to start paying contributions again at any time (for regular contributions paid through payroll, you must still be employed by the same employer as when you started the plan). You can change your plan to a paid-up plan at any time. This means you will not make future payments and the units we have already added will stay in your plan until you cash it in or we pay a death benefit. You may decide to start making payments again in the future. Annual management charges will continue to apply to your policy. If you want to make your plan paid-up, you should write to us.

7 Funds and Unit Prices 4 This policy is unit-linked. Unit-linking is simply a way of working out the value of your policy on any date. You do not own the units. The policy will be linked to units in one or more of the funds in the panel of funds. The maximum number of funds to which the plan may be linked to is three. We work out the investment price of units in all of the funds by using the market value of the assets of the fund and taking off the management charge. These prices may go down as well as up. You will find exact details of how we calculate fund prices in the Fund Operating Procedures Document. You can ask us for a copy of these from our head office. Our current panel of funds (January 2014) is shown in the following table. Panel of Funds Public Sector Cautious Savings Fund Public Sector Balanced Savings Fund Public Sector Adventurous Savings Fund In the future we may increase or reduce the number of funds in the panel of funds. We may change the range of fund options that are available at any stage. We reserve the right to close a fund. If you are invested in that fund, we will give you advance notice and you will be given the option to switch your investment into any of the other funds open at that time. If you do not indicate a preferred investment fund then we will move your investment into a default fund chosen at that time. The details of this will be included in the advance notice to you. When there are more customers moving out of a fund than making new investments in it, 6 we may reduce the value of the units in the fund to reflect the percentage of the costs associated with buying and selling the assets of the fund. The reduction in the value will be different for each fund and is likely to be most significant for the proportion of any fund invested in property. The reduction for any part of the fund invested with external fund managers may happen at a different time to the reduction for the rest of the fund. Some funds may be invested in other funds where the above reduction would apply. As described above, when more customers are moving out of these funds than making new investments, the value of the units may undergo a reduction to reflect a proportion of the costs associated with buying and selling the assets. This in turn will lead to a reduction in the value of the units of the fund. Switching between funds You may choose to change the funds into which we allocate units in respect of future contributions. You may also choose to switch where the accumulated fund is invested. We need written notice in order to do this. We do not charge for these options. We will carry out the switch based on unit prices on the day we receive your completed written request. In certain circumstances, we may need to delay switches. The circumstances in which we may delay a switch can include the following: If a large number of customers want to take money out of the same fund at the same time. If there are practical problems selling the assets in which the fund is invested.

8 For an externally managed fund, if the external manager imposes such a restriction. Due to the high cost and time involved in selling properties, a delay of this sort is most likely to happen if you are invested in a property fund (or a fund with a high proportion of property assets). The length of any delay will depend on how long it takes us to sell the assets in the fund. A minimum delay of six months would be likely to apply in this situation. Once you have given us notice that you wish to make a switch between funds you cannot change your mind during any notice period. Delayed switches will be based on the value of units i.e. when the notice period has expired when the switch actually takes place. 7

9 Charges 5 The charges on your Long Term Savings Plan will take two forms; a percentage of your fund value deducted each year (annual management charge) and a percentage of each contribution that is paid into your plan. Contribution charge The contribution charge on your Long Term Savings Plan is 3.75% and is deducted from each contribution that we receive, after the Government levy on life assurance, (currently 1%, March 2014), has been deducted. Fund charges Each month we deduct 1/12th of the total annual management charge due. This is done for each of your chosen funds. The charge is deducted and included in the investment price that is published on a daily basis. The fund charges for the funds available in the Long Term Savings Plan are set out below. Reduction in Fund charges There is a tiered fund charge on your Long Term Savings Plan which reduces the charge the greater the value of your Plan. This works by reducing the annual fund charge by 0.25% for any amount greater than 40,000 and less than 140,000 and by a further reduction of 0.25% on any amount greater than 140,000. We pass on any applicable reduction in fund charges by allocating extra units to your Plan each month. Variable charges Each of the Public Sector Savings Funds has its own investment mandate. This mandate sets out the strategy for each fund in terms of its investment mix. The purpose of the mandate is to ensure that each fund achieves the long term investment goals set for it, (in terms of both investment returns and investment risk) by adhering to the strategy set in relation to the mix of assets in which the fund invests. Fixed Variable Total average estimated Charge Charge fund charges each year Public Sector Cautious Savings Fund 1.00% 0.00% 1.00% Public Sector Balanced Savings Fund 1.00% 0.00% 1.00% Public Sector Adventurous Savings Fund 1.00% 0.00% 1.00% 8

10 At present (Feb. 2014) the Public Sector Savings funds do not invest in any asset classes that have variable charges. However, in order to best achieve their long term investment goals they may do so in the future. Therefore the fund charges may vary in the future and may not be fixed throughout the lifetime of your plan. The charge noted in the Fund charges table shown previously reflects our best estimate of the total fund charges we expect will be incurred by the fund over the long term. However, the actual charges you incur may vary for the reasons given below. Funds are administered at an overall level by Irish Life. For some funds, part or all of the assets are managed by companies (external managers) other than Irish Life. There are charges taken from these funds by both Irish Life and these external fund managers. The external fund managers take their costs and charges from the assets they manage. These charges are reflected in the published investment price of the fund. The level of the charges, as a percentage of the overall fund, can vary for several reasons: The percentage of the fund that is managed by external managers can change over time. The weighting of individual investment types may also vary over time. Where the fund invests in other funds, the overall fund charge will also vary accordingly. This split can change in the future mainly due to the availability of assets and also the amount of money coming into and out of the fund. The actual level of the external manager charge will therefore vary depending on the weighting of these factors within the fund. The level of the charges applied by external fund managers can vary according to the fund manager we choose in the future. We may also pay the external managers an incentive fee if they achieve positive investment returns on the funds they manage. The funds managed by external fund managers may borrow to increase the amount of assets that the funds can invest in. Borrowing increases the chance of achieving improved returns if the assets perform well. However, it also increases the level of risk of the investment. The external managers charges in relation to investments are based on the total value of the assets held including any borrowings made rather than on the funds they manage. The level of these charges as a percentage of the funds managed will depend on the amount of borrowing relative to the value of the assets held. If the level of borrowing increases by more than the value of assets, the level of charges as a percentage of funds managed would increase. For example, a significant fall in asset values could result in a significant increase in the average level of this charge as a percentage of funds managed. This is because a fall in asset values means that the amounts borrowed would represent a higher percentage of the fund value. Equally, if the level of borrowing reduces by more than the value of assets, then the level of charges as a percentage of funds managed would also reduce. For example, a significant rise in asset values could result in a significant reduction in the average level of this charge as a percentage of the funds managed. This is because a rise in asset values means that the amounts borrowed would represent a lower 9

11 percentage of the fund value. Taking account of these factors, we estimate that the average level of charges on the funds will be split as shown in the previous table in Section 5. The actual level of the variable charge, and therefore the total charge, may be higher or lower than this depending on the factors outlined above. Some funds invest in other funds and the proportion invested in each fund may vary over time. Since fund charges vary between funds, the overall fund charge will vary depending on the weighting of individual investments in each fund. If the charges on individual funds vary, the overall fund charge will vary as a result. The contribution and fund management charges go towards the cost of: setting up and administering the investment; paying sales and commission costs (if these apply); and the expenses of managing your plan We won t increase the contribution or fixed fund charges unless we need to do so because of an increase in the costs of dealing with the plan. If this happens, we will give you 3 month s notice of the increase. 10

12 Death Benefit 6 On the date we are told about the death of the Contributor shown on the schedule, we will switch the fund value to a Cash Fund. We will use the unit price which applies on that day. We do not charge for this switch. If you die, we will pay any death benefit to the executors or administrators who deal with your estate. The Fund charge for this Cash Fund operates as described Section 5, 'Charges'. The fixed fund charge for the Cash Fund is 1.00% of the fund value each year. The death benefit (before tax) we pay will be 100.1% of the fund value based on the unit price on the day we receive all the documents we need (as described below). We will take off any tax due as described in Section 8. We will not pay the death benefit if you cash in the investment before you die. If we pay the death benefit, the investment will end and we will not pay any other amounts. What we need before paying the death benefit Before we can pay the death benefit, we will need to receive: a completed claim form proof that the person making the claim is entitled to the money from the investment; these terms and conditions and the plan schedule; proof of a valid death claim (including proof of death in the form of a death certificate). 11

13 Cashing in part or all of your Plan 7 Encashments are not permitted from your Long Term Savings Plan in the first year following the commencement date shown on your policy schedule. This does not affect your right to cancel during the cooling-off period referred to at the start of this document. You may cash in all or part of your plan after the first year by writing to us at the address given in the introduction to this document. If you take money out of your plan, we will reduce the amount of money we pay you by the amount of any tax due. We explain this in the tax section (Section 8). The minimum partial withdrawal is 1000 before tax. The circumstances that may delay a fund switch that are described in Section 4 may also delay encashments. The value of your plan may rise as well as fall. Therefore your cash-in value may be less than the payments you have made. 12

14 Tax 8 Any taxes or levies imposed by the government will be collected by Irish Life and passed directly to the Revenue Commissioners. Under current Irish tax law tax is payable on returns made on this plan. The current tax rate (February 2014) is 41%. We will pay you the net amount after tax. Tax is payable on your investment returns when: You make any withdrawal (full or partial) from your investment You reach the 8th anniversary of your plan, and each subsequent 8th anniversary You die The tax payable on each 8th anniversary will reduce the amount invested in the fund from that date onwards. Where tax is deducted from your fund on each 8th anniversary, this tax can be offset against any tax that is payable on any subsequent encashment. Tax legislation means Irish Life must deduct the correct amount of tax payable. Irish Life retains absolute discretion to determine, in accordance with all relevant legislation and guidelines, its application and interpretation, the tax treatment of this investment. In some circumstances, additional tax may be due after death. For example, if the death benefit is paid to your estate, your beneficiaries may have to pay inheritance tax. There is no inheritance tax due on an inheritance between a married couple or civil partnership. In certain circumstances inheritance tax due may be reduced by any tax paid on a death under this investment. 13 Funds investing in overseas property or other overseas assets Some funds invest wholly or partly in property or other assets outside of Ireland. Any United Kingdom (UK) rental profit from property is subject to the basic UK rate of tax according to current United Kingdom tax law. UK tax incurred by Irish Life in respect of UK property will be deducted from the fund. For any investments in European and Asian property, tax will be deducted on rental profit if this is required by the domestic tax rules of the relevant country. In some instances, depending on the domestic tax rules of the country, capital gains tax may also be payable on capital gains made within the fund. For any investments in overseas assets, tax will be deducted on income or profits if this is required by the domestic tax rules of the relevant country. In some instances, withholding or other underlying taxes may apply, depending on the domestic tax rules of the relevant country.

15 Notices and Law Notices You must send all correspondence affecting this plan to our main office at: Irish Life Assurance plc Irish Life Centre Lower Abbey Street Dublin 1. 9 purpose of securities lending in order to earn an additional return for the fund. While securities lending increases the level of risk within a fund it provides an opportunity to increase the investment return. Where an external manager engages in securities lending, they may keep some or all of the revenue from this activity for themselves. Law This policy will be governed by Irish Law and the Irish courts are the only courts that are entitled to hear disputes. Force Majeure Clause In the event of extraordinary circumstances beyond our control such as industrial disputes, war, riot, crime, pandemic, serious illness affecting a large number of staff, an inability to communicate with third parties for whatever reason, failure of any computer system or telecommunications network, an act of God or an act of government, we may be prevented from fulfilling our obligations to you or from doing so in a timely manner. If this happens we are not liable for any loss, damage or inconvenience caused. Securities lending If you have chosen to invest in a fund that invests in equities or bonds, the equities or bonds within that fund may be used for the 14 Counterparty Risk We are not liable for any loss incurred by any of the investments in the funds available under this plan. The value of these investments may be affected if any of the institutions with whom we place money, suffers insolvency or other financial difficulty. Where a fund is managed by an external fund manager, the value of your units will reflect the value of the assets recovered from that manager. Irish Life will not use any of our assets to make up any shortfall. External Funds Where a fund invests in an external fund, we will represent the key features of the external fund in our literature. However, the managers of external funds may retain discretion over the nature and choice of assets, custodians and institutions with whom they place money, and the expenses incurred, within any part of a fund they manage. Our commitment to you is to pass on the full value of the fund we receive from the external manager for your investment.

16 We are not liable for any pricing inaccuracies related to the external providers. Our commitment is restricted to the returns we actually receive from the external manager. Where funds are managed by external fund managers, the investments may be legally held in other countries other than Ireland. Where a fund is based will impact on how it is regulated. Assignments You may not assign this policy in whole or in part or assign any of the benefits, rights or duties which may arise under the policy. 15

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18 Contact us phone: fax: website: write to: Irish Life Corporate Business, Lower Abbey Street, Dublin cb (4-14) Irish Life Assurance plc is regulated by the Central Bank of Ireland. In the interest of customer service we may record and monitor calls. Irish Life Assurance plc, Registered in Ireland number , Vat number 9F55923G.