International Pension Plan. Building a better future by balancing your investments

Transcription

1 International Pension Plan Building a better future by balancing your investments

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3 Flexible investments add more to your pension The International Pension Plan gives you three key freedoms: to invest in top-performing international funds, to choose your own retirement date, and to choose, when you retire, a cash lump sum or a guaranteed income for life, or both. You ll have access to funds investing in some of the most exciting areas of the world: emerging markets as well as the major world economies. You ll be able to switch from fund to fund whenever it suits your investment strategy. And we currently don t charge you, no matter how often you switch. Flexibility like this is what helps the International Pension Plan add more to your savings. It lets you choose where your money is invested and gives you every opportunity to strike the right balance of risk, potential growth and security. Royal & SunAlliance International Financial Services is a member of one of the largest international composite insurers, Royal & SunAlliance. Our capital strength ensures our long-term stability. And our success has made us the world-class company you can confidently invest with. The Isle of Man offers all the security of one of the safest legislative frameworks in the world. Our regulations ensure that you and your investments enjoy more protection here than in any other offshore location. This, and more, make the International Pension Plan an ideal way to secure your future prosperity. The International Pension Plan gives you the freedom to choose your Retirement Date and to plan to take your benefits at the intervals of your choice. The Plan is fully portable. If you change jobs or move to another country you can still pay contributions and receive benefits. After the first two years contributions have been received we invest 104% of your contributions to enhance your investment s potential growth. If you make regular contributions we pay you a Loyalty Bonus when your Plan matures. There s a wide choice of funds in international markets, managed by specialist fund managers. You can access them quickly, taking advantage of growth opportunities, and switch your investments currently free of charge. You choose how your pension is paid - as a cash lump sum, a guaranteed income for life, or both, whichever suits you best. Premiums are flexible. You can make single or regular contributions, or a combination of the two, in amounts that match your retirement plans. 1

4 A wide selection of funds; more opportunities for growth with security Specialist Funds These offer a broad choice of markets and sectors, and open up the opportunity to invest in growth markets in all the major world economies. Specialist Funds are ideal if you enjoy selecting investments while leaving the day-to-day fund handling to our experts. Flexible investments For choice and flexibility the International Pension Plan is outstanding. There s a wider range of investments to choose from, and switching from fund to fund is easy and currently costs nothing. Our funds are divided into units, so the higher your level of premium the more units we put into your Plan. You can change your investment strategy at any time, whenever your needs change, and choose the funds yourself or leave the choice to your Adviser. For extra flexibility, your Plan is normally issued as a cluster of ten different policies for which you can set different maturity dates to receive benefits at staged intervals. We also have considerable financial muscle, so our dealers can purchase funds for you at a substantial discount. Royal & SunAlliance International Financial Services funds fall into three categories: international Managed and Specialist Funds, all of which are managed by experts in their particular fields, and Guaranteed Profits Funds which protect your investments against falls in the markets by guaranteeing to pay out at your chosen retirement date using their highest ever price. To keep you in touch with the markets, we will supply you with regular statements and information on funds. Managed Funds These invest in a balanced mix of fixed interest securities, international equities and currencies. An investment in any of these has historically compared very favourably with bank deposits in the medium to long term, although past performance is not necessarily a guide to the future. Our Specialist Funds allow you access to some of the world s leading investment houses and are chosen by us for their proven performance and expert management. This allows you to create a highly diversified portfolio of top-performing funds and to switch funds at will, currently at no charge, according to your chosen balance of risk and security. Guaranteed Profits Funds These are designed to ensure that your accumulated savings maintain their highest ever value at the date or dates you have chosen to receive the benefits. You simply choose the Guaranteed Profits Fund that matures in the year in which your Retirement Date falls. At this point we identify the highest ever bid (selling) price achieved by the Fund since its launch. The number of units you hold will then be multiplied by this price to give your investment its highest ever value. Please note that there is no guarantee that the bid price will increase, simply that any increases will be preserved until your selected Retirement Date. The Funds are invested in varying proportions in a mix of international equities, fixed interest securities and, sometimes, cash. The exact combination will depend on the proximity of your chosen dates and the prevailing market conditions. Please note that the guarantee inherent in the Funds applies only if the investment is held until the selected Retirement Date. Also, we recommend that any investments made are into funds with a minimum term to maturity date of 10 years or more. You can choose any combination of funds from the three categories, subject to a maximum of 10. Further details are given on page 5. 2

5 A wide selection of options for your retirement The date at which your Plan matures is up to you; any date can be selected up to your 70th birthday as long as it is at least five years after the inception of your Plan. You may also alter your Retirement Date at any time. Where an earlier date is chosen, a deduction will be made equal to the quarterly additional Management Charges (see Charges) which would otherwise have been paid. Where you have invested in the Guaranteed Profits Funds, and you change the Retirement Date, the guarantee which will apply will be that appropriate to the new Fund. When the Retirement Date is altered, transfers between the Guaranteed Profits Funds are carried out on a bid to bid basis. Upon retirement, your benefits can be paid anywhere in the world, without deduction of tax at source. You can take them as a guaranteed income for life, a lump sum or as a combination of both. And a lump sum can be paid in any freely convertible currency. If you choose a guaranteed regular income, a Royal & SunAlliance International Financial Services Annuity will make monthly, quarterly, half yearly or annual payments in sterling or US dollars direct to your nominated bank account. Variable premiums With the International Pension Plan you can vary your premiums to suit your circumstances. How you pay is also up to you. Regular contributions, in sterling, US, Euros or HK dollars, can be paid from as little as 200, US$300, 280 or HK$3,000 per month, or 2,000, US$3,000, 2,800 or HK$30,000 annually. Or choose to pay an initial lump sum of 10,000, US$20,000, 14,000 or HK$150,000 or more, which may be topped up at any time with minimum additional contributions of 500, US$1,000, 700 or HK$7,500. Or you can choose to combine both methods of payment, adding lump sums to your regular premiums whenever you like. As your earnings increase, so too can your premiums. You may increase your premium level at any time, to boost the value of your pension and enhance your expectations for retirement. The minimum increase is 50, US$100, 70 or HK$750 per month or 500, US$1,000, 700 or HK$7,500 per annum. After two years of regular contributions, and provided that your Plan has a minimum value of 5,000, US$10,000, 7,000 or HK$75,000, you are free to reduce your payments or stop them altogether - without penalty. (A penalty would apply if you reduced or stopped your payments during the first two years.) Additional cover for extra protection Built into the International Pension Plan is a basic death benefit, payable in the event of your death before the Plan matures, of 101% of the bid (selling) price of your Plan. For further peace of mind you may also choose to take out Additional Life Assurance Cover at any time before the date of your retirement, subject to satisfactory underwriting. The cover is fully flexible and you can increase or decrease your cover at will, arrange for cover on a joint life basis or switch between single and joint life at any time. Where the Plan is arranged on a joint life basis and you have chosen Additional Life Assurance Cover, the benefit is payable on the first death. After Additional Life Assurance Cover is paid, the Plan will cease. Both death benefit and Additional Life Assurance Cover are paid without deduction of tax at source. Provided that you are an eligible investor aged between 18 and 54, you can also take advantage of our Premium Protection Cover which effectively waives any premiums due if you are unable to work through illness or disability for a period of more than six months. Your cover will be maintained until you return to work, retire or reach the age of 60, whichever is earlier. Premiums for Additional Life Assurance Cover are simply deducted from the units allocated to your Plan. For Premium Protection Cover please add the payments to your Plan contributions. 3

6 Notes Type of Policy The International Pension Plan is a unit-linked offshore life assurance policy designed for medium to long term investment. Charges All funds are subject to a regular Administration Charge, currently 1.2% per year, debited directly to each fund on the valuation day. We reserve the right to vary this Charge at any time at our discretion upon three months written notice to you. The current spread between the offer (buying) and bid (selling) prices of the fund units is 7%. External Fund Charges As is common with this type of investment, Initial Charges and annual Management Fees are applied to the underlying assets. However, our dealers purchase at a substantial discount, which is then passed on to the benefit of the policyholder. Full details of the underlying assets are available from the relevant investment house, which you should contact for more information. Units Each of our funds is notionally divided into units and the amount of premium allocated will determine the number of units within your Plan. The net value of the underlying assets (allowing for any charges) and any accumulated income is reflected in the price of the units. By multiplying the relevant bid price by the number of units you can readily calculate the progress of your investment at any given time. Contributions will be used to buy units in your selected fund(s) at the offer (buying) price on the next dealing day after your payment has been received and cleared. 100% of your premium is invested in years one and two. From year three onwards, 104% is invested. These allocation rates refer to the investment of regular contributions of a constant amount. Initial Units & Accumulation Units Units within your funds are allocated either as Initial Units or Accumulation Units. The first two years regular contributions and the first two years of any increase are allocated to Initial Units. These are subject to an additional quarterly Management Charge of 1% (4% per annum) levied by deduction of units until your selected Retirement Date. All payments thereafter, including single payments, are allocated to Accumulation Units and bear no additional charge. Plan Fee Regular contributions are subject to a Plan Fee, debited to monthly premiums at 3, US$6, 4.20 or HK$45 per month and to annual premiums at 20, US$40, 28 or HK$300 per year. On your Retirement Date, however, if you have paid all due premiums throughout the term of your Plan, you will receive a Loyalty Bonus equivalent to the total Plan Fee paid. Reducing or stopping your contributions If you decide to reduce or stop payments within the first two years of the Plan, a deduction equal to 7% of the contributions outstanding to the end of the initial two-year period will be made from the Plan by cancellation of units. This reflects the initial setting-up expenses. Currency You may pay premiums in either sterling, US dollars, Euros, HK dollars, Belgian francs or Deutschmarks. When you take out a Plan you can elect to receive all future valuations in any one of these currencies. The valuation currency can be changed at any time; however, premiums can be paid only in the original selected currency. If no selection is made, valuations will be shown in the currency of your premium. Payments of benefits or withdrawals will normally be made in the selected valuation currency. Alternatively, upon request, benefits may be paid in any freely convertible currency, worldwide. Where you make investments into funds which are in a different currency from your premium payment, it should be noted that losses could be incurred due to adverse exchange rate movements. Premium Protection Cover & Additional Life Assurance Cover You should note that if regular premiums are stopped, Premium Protection Cover will no longer apply. Full details of Premium Protection Cover and Additional Life Assurance Cover are given in our separate application form. Benefits on Death The sum assured payable on death is 101% of the bid value of your Plan. The standard death benefit can be written on two lives so that the Plan remains in force until the death 4

7 of the last survivor. The death benefit is payable only after we have received the original policy documents and any other documentation which may be required. Annuity Income is paid monthly, quarterly or annually direct to your nominated bank account. The price of Annuities varies according to age, gender, interest rates in force at the time of conversion and the frequency of payment of income. Once purchased, the Annuity will pay a guaranteed income for life. Funds The prices of some of the funds managed by Royal & SunAlliance International Financial Services are quoted in the Hong Kong Economic Times and the Offshore Insurances section of the Financial Times. For each fund managed by other investment managers, Royal & SunAlliance International Financial Services has set up its own fund which invests exclusively in the underlying fund, apart from a proportionately small amount maintained as a cash balance. This means that the price of the Royal & SunAlliance International Financial Services fund will be different from the corresponding fund but will mainly move in line with it. Details of the available funds are given in our Fund Prices leaflet, published monthly, and our quarterly Fund Guide. Important note for proposed policyholders who are resident in Hong Kong The principal brochure consists of this product brochure and our Mirror Funds leaflet, which describes the funds which are available to you. These two documents must be read together. Accumulation Units standing to the credit of your Plan will be their bid (selling) value, minus any reduction made to the Initial Units (see below). The unit price guarantee on the Guaranteed Profits Funds does not apply on encashment before the Retirement Date. Should you need to cash units for any reason, Accumulation Units will be utilized first and then, when they are exhausted, Initial Units. If you surrender your Plan within the first two years a deduction equal to 7% of the contributions due in the first two years will be made by cancellation of units, to reflect the initial expenses incurred in establishing your Plan. If for any reason Initial Units are cancelled - for example to pay for Additional Life Assurance Cover or on surrender - they will be reduced by an amount equivalent to the quarterly management charges due until your selected Retirement Date. We expect to make the proceeds of any Plan available normally within 10 working days following receipt of all necessary documentation, except where the circumstances are beyond our control. We must reserve the right to delay payment of a surrender where this would result in the need to sell assets which are not always readily realizable. We would, however, invoke this restriction only in the most extreme circumstances. Tax Treatment Royal & SunAlliance International Financial Services is not liable to income tax, capital gains tax or corporation tax on its policyholders funds. Some dividends may be received net of withholding tax, deducted at source in the country of origin, but once inside your Plan they can accumulate free of tax. Switching Facility You are free to switch between funds at any time. Currently no charge is made although we do reserve the right to introduce a charge of up to 1% of the value of the units switched or 10, US$20, 14 or HK$150 if greater. Investments will be switched between funds on a bid to bid basis on the next dealing day following receipt of your written instructions. Early Surrender To surrender a Plan, written notice should be sent to Royal & SunAlliance International Financial Services with the policy and all documentation. The cash value of all Initial and The personal tax consequences of investing in the Plan will depend on many factors. You may have a personal tax liability in respect of the proceeds of the Plan. This will largely depend on your country of residence. It is therefore important that professional guidance is sought before proceeding with an investment. Important note for proposed policyholders who are, or who are planning to become, resident in the UK Royal & SunAlliance International Financial Services is under a statutory obligation to report to the UK Inland Revenue certain events where benefits are received from the Account by a UK resident individual, company or trust. For further information, please contact us or your usual financial adviser. 5

8 Summary of Charges Administration Charge 1.2% per annum, debited directly to each fund on the valuation day Bid/Offer Spread 7% External Fund Charges Initial Units (first two years regular contributions and the first two years of any increase) Plan Fee Between 0.1% and 2.9%, dependent upon the fund chosen Management Charge 1% per quarter (4% per annum) Cancellation Charge Outstanding Management Charges due until Retirement Date 3, US$6, 4.20 or HK$45 per month (monthly premiums) 20, US$40, 28 or HK$300 per year (annual premiums) Accumulation Units Management Charge Nil (single premiums and regular contributions Cancellation Charge Nil from year three onwards) Full Surrender, Reduction or Discontinuance of premiums Full surrender, reduction or discontinuance of premiums during first two years of regular contributions (including first two years of any increase) Full surrender only after two years 7% of the contributions outstanding to the end of the initial two-year period plus Cancellation Charge on any Initial Units Cancellation Charge on Initial Units Terms & Conditions A written statement of all the terms and conditions of the International Pension Plan can be obtained from Royal & SunAlliance International Financial Services on request. Transfer of Investments We retain the right at our absolute discretion to transfer the investments to any of our internal funds, subject to a minimum of three months notice in writing. How to Apply The International Pension Plan is available to anyone aged between 18 and 60 who is able to invest offshore, with the exception of residents of the Isle of Man or the United States of America. However, please satisfy yourself that, under any taxation, exchange control or insurance legislation which exists in your current country of residence, you are able to effect the Plan, an offshore life assurance policy. It is also wise to consult your Financial Adviser before entering into an investment of this nature. Simply complete the application form together with the Additional Life Assurance Cover/Premium Protection Cover application form if required, and return it to your Financial Adviser. Please include a standing order for regular payments and/or your cheque, made payable to Royal & Sun Alliance International Financial Services Limited, or completed Bank Instruction Letter for lump sum payments. You should also include documentary proof of identity, such as a current valid passport. After your premium has been received and cleared through our bank, your policy documents will be sent to you. Then, at least once a year, we will send you a statement confirming your current investment holding. A Word of Advice It is important to remember that, as with most investments, the value of your investment is not guaranteed and can go down as well as up. Therefore we suggest that you only invest money that can be committed in the medium to long term. You should also bear in mind that securities held within a fund may not be denominated in the currency of that fund and so unit prices may rise and fall purely on account of exchange rate fluctuations. 6

9 THE INFORMATION GIVEN IN THIS BROCHURE is based on the understanding of Royal & Sun Alliance International Financial Services Limited of current law and Isle of Man taxation practice, which may change in the future. No liability can be accepted for any personal tax consequences of this scheme and for the effect of future tax or legislative changes. Royal & Sun Alliance International Financial Services Limited is a life assurance company, registered in the Isle of Man, whose policyholders receive the protection of the Life Assurance (Compensation of Policyholders) Regulations Holders of policies issued by the Company will not be protected by the United Kingdom Policyholders Protection Act 1975 if the Company should become unable to meet its liabilities to them. Some telephone communications with the Company are recorded and may be randomly monitored or intruded into. Each policy is governed by and shall be construed in accordance with the law of the Isle of Man. However, this will not preclude the right to bring legal action in a Hong Kong court. Royal & Sun Alliance International Financial Services Limited accepts responsibility for the accuracy of statements contained in this brochure and that no material facts have been omitted from the information provided to the best of Royal & Sun Alliance International Financial Services Limited s knowledge. ILLUSTRATION OF SURRENDER VALUES Applicants resident in Hong Kong will be required to sign an illustration document as part of the application for a policy. This document includes a table of figures which shows the impact of fees and charges on the product and their effect on surrender values. The figures are based on certain assumptions as stated in the document. LEGAL INTERPRETATION Each policy is governed by and shall be construed in accordance with the law of the Isle of Man. IMPORTANT NOTES FOR RESIDENTS OF HONG KONG The documentation of the International Pension Plan has been authorized by the Hong Kong Securities and Futures Commission pursuant to Section 4(2)(g) of the Protection of Investors Ordinance. In giving this authorization the Commission has made no assessment of, nor does it take responsibility for, the financial soundness or merits of the International Pension Plan, nor has it verified the accuracy or truthfulness of statements or opinion expressed in the documentation. The constitutive documents of the International Pension Plan comprising the Policy Provisions and Fund Rules, are available for inspection at Royal & Sun Alliance International Financial Services Limited s offices at the address given. COOLING-OFF RIGHTS Applicants resident in Hong Kong have the right to cancel a policy and obtain a refund of any premiums paid less any market value adjustment by giving written notice to us. If you decide to cancel your policy, you must send notice to us direct at our office at Two Pacific Place, 88 Queensway, Hong Kong. We must receive your notice within 21 days from the date of your application or 14 days from the date of issue of the policy, if later. If you would like to know how we calculate the market value adjustment, please ask us to send you further information by contacting our office at the address shown above.

10 Royal & Sun Alliance International Financial Services Limited Royal Court, Castletown, Isle of Man, British Isles, IM9 1RA Telephone: Facsimile: e mail: servicedesk@rsaifs.com Registered No: Isle of Man Regulated by the Personal Investment Authority for UK investment business Member of the Association of International Life Offices The appointed representative of the Company in Hong Kong is Royal & Sun Alliance International Financial Services Limited s branch office: Royal & Sun Alliance International Financial Services Limited Two Pacific Place, 88 Queensway, Hong Kong Telephone: Facsimile: e mail: servicing.hongkong@rsaifs.com Visit our website at IPP11/99-3