PERSONAL PENSION PLAN

Transcription

1 Unit Linked PERSONAL PENSION PLAN Key Features Document This Key Features Document contains a summary of the main features of your Personal Pension Plan. Please read it carefully so that you understand what you are buying and the risks involved. Registered Address: MSV Life p.l.c., Level 7, The Mall, Floriana FRN 1470, Malta. Telephone: (+356) Freephone: info@msvlife.com Website: MSV Life p.l.c. is authorised by the Malta Financial Services Authority to carry on long term business under the Insurance Business Act COM /1 D

2 PLAN OBJECTIVES To build up a sum of money which will be used to provide a tax-free cash sum when you retire and a regular income for the rest of your life, in order to supplement the State Pension To help your retirement planning cope with changes in your personal and financial circumstances. To offer you a wide and flexible choice of where to invest your savings. To provide a cash sum to your wife, husband or dependant(s) should you die before retirement. YOUR COMMITMENT To make regular contributions for the life of the Plan. To keep the Plan invested until you choose to take your retirement benefits. To invest for the long term and to review your contributions on a regular basis. ABOUT THE PLAN The MSV Personal Pension Plan (Unit Linked) is a long term regular savings pension plan, offering you a choice of various unit linked investments. It allows you to save on a regular basis and to invest additional lump sums at any time in the future. The value of the Plan is linked to the value of the underlying investments of your choice. Contibutions to the Plan qualify for a tax credit for those meeting the eligibility criteria below. AMOUNT OF TAX CREDIT Your contributions are eligible for a tax credit of 15%, up to a maximum set by the Government. The table below shows the maximum contribution allowed per year: Year Maximum contribution Maximum tax rebate , , The tax credit is only available in respect of the income tax chargeable for the year during which the contribution was made. Unused credits cannot be carried forward to subsequent years. ELIGIBILITY FOR TAX CREDIT You may claim the tax credit against your contributions if you are: 1. Age eighteen or over at the time when a contribution is made; and 2. domiciled and/or resident for tax purposes in Malta If you meet the above criteria then we will issue a certificate confirming that your MSV Personal Pension Plan satisfies the relevant legislation to enable a tax credit to be granted. TAX TREATMENT OF THE PLAN 1. Contributions are eligible for tax credit as detailed above. 2. At retirement you may opt to receive up to 30% of the fund value as a tax free lump sum. 3. After taking any cash lump sum the remaining fund may be subject to a Final Withholding Tax on Capital Gains arising from non- Prescribed funds. Prescribed Funds are not subject to a Final Withholding Tax. The balance of the fund is then used to provide you with an income which is subject to Income Tax. Note: A Prescribed Fund is a Malta Based Scheme which has at least 85% of the value of the total assets situated in Malta. A Non- Prescribed Fund is a fund which is based overseas or has less than 85% of its total assets situated in Malta. RISK FACTORS The underlying investment funds, in which you can choose to invest your contributions, have different levels of risk. Past performance of funds is not necessarily a guide to future performance and the value of your Plan is not guaranteed. The value of funds and the currency in which they are denominated may go down as well as up and you may not get back your original investment. When you retire the fund value may be less than illustrated if: - You stop contributing into the Plan, or reduce contributions - Investment performance is lower than illustrated - You take your benefits earlier than your selected retirement date - Tax rules change - Charges increase above those illustrated

3 QUESTIONS AND ANSWERS 1. What is a Personal Pension Plan? A Personal Pension Plan is your own personal savings plan for your retirement. It is a long term contract of insurance which accepts regular and single contributions and qualifies for tax credits on contributions. It may be suitable for people who are employed, self employed or self occupied. You may start a Plan for your spouse so long as the elgibility criteria for tax credit stipulated earlier are met. 2. How flexible is it? Paying In You save on a regular basis and you can make single one off top ups whenever you like. Contributions to the Plan can be made by cash, cheque, standing order or bank transfer. You can increase your regular contributions whenever you like, or choose to have them automatically increased each year in line with inflation (minimum 3.5%). You can change your contributions in the future to suit your personal circumstances. Stopping contributions You can stop making contributions, in which case: Your Plan will continue to be invested We will continue to deduct our charges, which may reduce the value of your Plan. When you retire your benefits are likely to be less than you expected. Restarting contributions Within five years of stopping contributions you can restart them at no additional cost, subject to the minimum terms applicable at that time. If you do not restart your regular contributions within 5 years of stopping them we will automatically change the status of the Plan to Paid Up, meaning that no further contributions may be made into it. At retirement you will still be able to access the benefits. 3. Who can have one? The Plan is available to anyone aged between 18 and 65 and has a minimum term of 10 years. Personal Pension Plans can only be issued on a single life basis and cannot be pledged or assigned. Tax credit is only available to those meeting the eligibility criteria. 4. How much can I pay in? There are no limits to the amount you can contribute, but you should ensure any contributions you agree to are affordable now and for the foreseeable future. It is not recommended that you save more than the maximum allowed for the tax credit. Should you wish to save more than this amount it might be more beneficial to put the extra amount into an alternative savings plan. The minimum contributions are: 40 per month 120 per quarter 240 half yearly 480 annually The minimum single top up to the policy is Where are the contributions invested? You can choose where to invest from a large range of funds. The MSV Abridged Chartbook, available on our website provides full details of the funds available, including their objectives, risk profile and the investments they hold. The funds invest in different assets like stocks, shares and property, and in different markets and countries. Your choice of investments to which the Plan is linked should be based on the full details included in the prospectus of the scheme, copies of which are available on request. You can select as many funds as you want so long as at least 10% of your contribution is allocated to any one fund. We may change the funds available for investment in the future and may place restrictions on the amount that can be invested in any one fund. As some of the funds holdings may not be held in local currency, unit prices may rise and fall purely because of changes in exchange rates. Our funds are managed by Professional Fund Managers. The MSV names of the funds reflect the name of the underlying sub-fund to which your Policy is linked. For instance the MSV Fidelity America Fund will invest in the underlying America Fund within the Fidelity Funds SICAV. After deduction of any charges the balance of your contribution will be used to purchase units in the funds you have chosen. Units are allocated on the 15th and 30th day of each month, or the next working day as appropriate. Units sold shall be at the price applicable for the next Valuation Date following the date we receive your written instructions, together with any documentation we may require. The cut off time is 1200hrs on every business day. The price of MSV Funds shall be determined by reference to the market value of the underlying sub-funds, taking into account any charges, exchange rates, fees, taxation or other liabilities that might occur. Unit prices are not guaranteed. They go up and down in line with fluctuations in the value of the funds investments. As unit prices go up and down so does the value of your Plan. The allocation of units to the Plan is only notional and is solely for the purpose of calculating your entitlement to benefits. At all times we will retain ownership and control of the units to which the Plan is linked.

4 6. How are the prices of the investment funds calculated and at what price will I purchase units? The bid prices of the investment funds are determined by reference to the price of the respective underlying investment funds. In determining this we take into account any charges, exchange rates, fees, taxation or other liabilities that might occur. The value of the units allocated to your Plan will be based on the bid price of the fund applicable for the next Valuation Date following the date when we receive your payment and any other document that we may require (in case of a top up). All buy or sell transactions are effected at the bid price. 7. Can I move between funds? You can change the funds your future contributions are invested in at no charge. This is called redirecting contributions. You should notify us at least 15 days before the date you wish to make the change effective. You can also move the funds your previous contributions have been invested in. This is called switching funds. Charges apply as detailed below. 8. How will I know how my Plan is performing? We will provide you with a free statement twice a year, or upon request. In addition you should have regular reviews with your financial adviser. 9. What happens to the Plan if I die before I retire? If you die before taking benefits we will pay 101% of the value of your Policy to your estate or named beneficiary. Advanced pre-payment of death benefits is available to cover funeral expenses, up to a maximum of 2,500 or the value of the Plan if lower. 10. What happens if I need the money early? Saving for retirement is a long term commitment and you should not commit any money which you might need to access before retirement. Current legislation only allows you to start taking benefits between age 50 and Can I transfer the fund to another provider? Subject to legislation and subject to the acceptance of the receiving provider we will permit transfers of your pension plan to another qualifying scheme. Transfer charges apply in the first 5 years: Year 1 20% 2 10% 3 10% 4 5% 5 5% 6 onwards 0% Transfer Charge 12. What are the Plan charges? The charges on the plan cover the cost of setting it up, as well as the costs of administration, marketing and investing your money. We take an annual management charge of 0.8% p.a. by cancelling units in your Plan on a monthly basis. In the first year only a deduction of 20% will be made from the regular contributions in order to cover establishment costs. Any increases to regular contributions are charged on the same basis (20% charge in the first year only). The first two switches in any calendar year are free. Subsequent switches will be charged at 0.5% of the bid value, subject to a minimum of 25. One-off single top ups will be charged on the following basis: Payment amount 150-2,499 2% 2,500-4,999 1% 5,000+ 0% Charge The fund managers of the underlying funds in which you invest will have an annual management charge which is reflected in the daily price. All charges are subject to review from time to time, however we will give you 90 days notice before making any alterations. 13. Can I change my mind? After your Application Form has been accepted, you have 30 days from the policy issue date to cancel the Policy and obtain a refund of your contributions. If you cancel the Policy during this period you will not be liable to any charges imposed by us. However any adverse market movement in the value of the investments shall be at your risk. A request to cancel must be received in writing by us. 14. How do I claim the tax credit? MSV Life will notify the Inland Revenue that you have made contributions to a Personal Pension Plan. If you are not required to complete an annual self-assessment tax return then you do not need to do anything. The Inland Revenue will simply issue you with a tax refund of 15% of your contribution. If you normally complete a self-assessment tax return then you will be required to state your contribution on the form and the tax computation will take it into account.

5 Tax refunds normally start to be paid by October following the year of your contribution. If you have any queries regarding the payment of your tax credit it is recommended you speak directly to the Inland Revenue Department. 15. What choices will I have when I retire? It is important to note that the decision on how you want to take your pension benefits is made at your retirement and not when you start saving into your Personal Pension. Your personal circumstances, tax rules and pension legislation could change between now and your retirement date. 16. When can I start to take the benefits? Personal Pension Plans are designed to provide you with a pension; however legislation states that you can start to take your benefits from age 50, and must start before age 75. The earlier you decide to take your benefits the smaller the pension will be. 17. What can I receive from the Pension Plan? Under current legislation you have the following options when you decide to take the benefits: You can take up to 30% of the fund as a tax-free cash lump sum The remaining balance has to provide you with an income, which is subject to income tax 18. How will I take the income? When benefits become payable, you will be offered a range of options regarding how the income can be taken. You can elect to purchase an Annuity, in which case the income will be guaranteed for life, or you can elect to keep the money invested and take an income from it this is called Programmed Withdrawals. 19. If I choose an Annuity, what happens if I die? At retirement you will be given many options with regards to how the income can be paid, including what would happen if you died whilst receiving the pension. A Single Annuity will stop when you die and no other income would be paid, whereas a Joint Annuity would continue to be paid to the surviving spouse. You will be able to choose how much of your pension you would like to continue to your spouse (e.g. all of it, or half of it). Depending on the age of your spouse a Joint Annuity may provide a lower income than a Single Annuity. 20. If I choose a Joint Life Annuity what happens when my spouse dies? If you predecease your spouse then the pension becomes payable to the spouse, and will continue to be paid until they die. On their death the pension will then cease. However it may be possible to arrange for a lump sum to be payable to the estate. These and other options will be explained to clients at the time they want to take benefits. 21. Will my pension income increase once I start to receive it? With an annuity you can choose to have an income which remains the same throughout your lifetime, or you can choose to have one which increases each year. A pension which increases each year is more expensive than one which remains the same and therefore your starting pension would be lower. Again these are decisions you take at retirement and not today. 22. What are Programmed Withdrawals? When benefits are accessed from the Personal Pension Plan you can, rather than taking an annuity, choose to keep the money invested and take an income directly from the funds. This is called Programmed Withdrawals. The amount which can be taken as an income will be broadly equivalent to the income receivable from an Annuity. The advantage of this option is that the money remains invested and could grow to provide you with a larger pension. The disadvantages are that the fund might fall in value and leave you with a smaller pension, or the fund could even be depleted completely before you die, leaving you with no pension income. 23. How much will the income be? The amount of income you will receive will depend on the size of your retirement fund, your age, the options you select (e.g. Joint Life Annuity) and annuity rates at that time. The more options you choose the lower your income will be. Your personal illustration will provide you with an estimate of what the income could be. 24. What about tax? Any statement about taxation is based on our understanding of current law and tax practice. Future changes in law and taxation, or your own financial circumstances, could affect the treatment of this Plan and the amount of tax payable.

6 FURTHER INFORMATION Financial Advice This document is not designed to offer financial advice and should not be used in isolation when making a decision about your retirement planning. We encourage you to always seek financial advice before starting a long term savings contract. How to complain We are committed to providing you with a high level of service. It is therefore very important that you inform us when our level of service does not meet your expectations. Should you have any cause for complaints about our services please write to us at our registered address, for the attention of The Chief Executive Officer. If you are not completely satisfied with our response you have the right to take your complaint to: The Consumer Complaints Manager Malta Financial Services Authority Notabile Road Attard BKR 3000 Malta Making a complaint will not affect your legal rights. Law and language The Policy shall be construed in accordance with the Laws of Malta. The translation of this document into the Maltese language can be provided upon request. This Policy shall in no case be interpreted by reference to that translation and should there be a conflict of meaning between the English text and Maltese translation or any doubt whatsoever, the English text shall take precedence and be applied to the complete exclusion of the Maltese translation. This document has been produced on our understanding of current legislation and tax laws, which may be subject to change in the future. Any word, expression or amount to which a specific meaning or significance has been attached in any part of this Key Features Document shall bear such specific meaning or significance wherever it may appear. Reference to the masculine includes the feminine and the singular includes the plural and vice versa, unless the context requires otherwise. Notes and illustrations Investment returns quoted on any illustration are for illustration purposes only and consequently do not reflect the actual return on retirement or transfer. The value of the underlying assets and the returns resulting there from (and hence the value of your policy) can fall as well as rise according to market conditions including exchange rate fluctuations. The higher assumed investment returns shown in illustrations assume a significant weighting of a higher investment risk tolerance being a higher allocation to funds which have a higher risk and greater volatility such as equity funds. Market conditions may be such as to result in returns far inferior to the lowest projected returns shown in any illustration. The Estimated Retirement Values of the policy are not guaranteed and they are not minimum or maximum rates or amounts. Furthermore you may not get back the amount originally invested, especially if the policy is transferred after a short period following its commencement. The assumptions used in the calculations of any Illustrative Retirement Values and Estimated Transfer Values are based on the terms and conditions stated in the Key Features Document that should be provided to you with any illustration. Please read the accompanying documents carefully. Investment returns can go up as well as down and therefore past performance is not necessarily a guide to future performance. All illustrations are based on the current level of internal product charges. Annual management fees charged by funds to cover the costs of managing the funds are factored into the daily share price (the NAV Net Asset Value) of the fund and are therefore reflected in the performance of the funds. Illustrations are therefore shown net of all charges. Internal product charges can be varied by us in accordance with policy conditions. Changes in the rate of exchange of currencies may also affect the value of your policy. Funds are unitised investment funds which contain a variety of different assets. Your money is pooled with the money contributed by other investors and buys units in the selected funds. Plan means the life insurance contract described in this Key Features Document. Policy Account means the value of all the units allocated to your policy calculated at the bid price of the funds. Regular Contributions means the money paid by you at regular intervals into your Plan over its lifetime. Retirement is the date, between the age of fifty and seventy-five, at which the Plan s term comes to an end and retirement benefits commence, and bears no relation to the State Retirement Age. Unit is a share in a unitised investment fund. We, us or MSV mean MSV Life p.l.c. You / Policy Owner means the person who has all the rights (e.g. to receive the Plan Benefits) and obligations (e.g. to pay the regular contributions) under the Plan.