IN-FUND LIVING ANNUITY

Transcription

1 IN-FUND LIVING ANNUITY TERMS AND CONDITIONS IN-FUND LIVING ANNUITY Terms and conditions UMBRELLA FUNDS

2 ALEXANDER FORBES RETIREMENT FUND Contents 1. Introduction 3 2. Definitions 3 3. When the policy starts 4 4. Living annuity 4 5. Investment amount 5 6. Investment portfolios 5 7. Ownership of this policy and the units 5 8. Portfolio selection and switching 5 9. Beneficiaries Tax treatment Transfers to other long-term insurers Annual review letter Appointment of a financial adviser Reviews Liability Fees and charges Notices and communication Governing law Complaints and dispute resolution Legal proceedings for rejected claims Recovery of statutory costs Cession and assignment Loans Information and record-keeping Amendment and variation of policy Your options if you no longer wish to continue with this policy Procedure on death Conflicts of interest 29. Time periods for carrying out your instructions 11 Annexure: Fees and charges schedule 12 2

3 IN-FUND LIVING ANNUITY TERMS AND CONDITIONS 1. Introduction This document sets out the policy for the in-fund living annuities offered by the Alexander Forbes Retirement Fund (pension and provident sections) and the Alexander Forbes Core Plan (pension and provident sections). It records the issues that the trustees of the fund have addressed in establishing this policy. This version of the policy came into effect on 1 July This was when the in-fund living annuities were introduced in the fund s rules. The main purpose of this document is to set out the policy that controls all details of the provisions of in-fund living annuities by the fund, as set out in the fund rules. The second purpose of this document is to record the main factors that the trustees considered when they determined the terms and conditions of this policy. The trustees are aware that the conditions stated in this policy may not suit every qualifying annuitant (a person who receives an annuity). In such cases, annuitants can use annuity options outside the fund. 2. Definitions The following definitions apply to this policy: Administrator: Alexander Forbes Life Limited, a licensed financial services provider with FAIS licence number 1178, or such other person appointed by Alexander Forbes Life Limited as its administrator from time to time. Anniversary date: The first day of the month in which the first annuity payment is made to the annuitant. Annuitant: The member who has elected to remain in the fund and receive an in-fund living annuity in terms of the fund rules. Annuity income: The income, before income tax is deducted, payable to you as an annuity in terms of this policy. Beneficiary: The person who you nominate to receive the annuity benefits on your death in terms of this policy. Beneficiaries are the people or organisations that benefit from the income or proceeds of this annuity on your death. A member can nominate their beneficiaries in their retirement fund nomination of beneficiaries form. Business day: Mondays to Fridays, excluding Saturdays, Sundays and official South African public holidays. Fund: The Alexander Forbes Retirement Fund (pension and provident sections) and the Alexander Forbes Core Plan (pension and provident sections). In-fund living annuity: A living annuity as defined in the rules of the fund paid from the fund. Start date: 1 July 2016, when the in-fund living annuity solutions were made available through the rules of the fund. Investment account: The account through which this policy is administered. Investment amount: An amount made up of the investment at the start of this policy, less all fees, charges, costs and value-added tax (VAT) (if any), plus positive returns on the investment, which the pension and provident sections will invest on your behalf in terms of this policy. Living annuity: This is defined by section 1 of the Income Tax Act of Policy: This living annuity terms and conditions and any schedules, application forms, or amendments made to it. Portfolio: Any investment portfolio of the fund, a portfolio of a collective investment scheme or any other financial product, which the fund makes available for investment in terms of this policy, from time to time. Qualifying criteria: According to current legislation, there is no minimum or maximum initial amount that must be used to secure a living annuity. However, you need to have at least R of your money in the fund to use for your pension, after you have taken any money in cash, paid any claims by the employer for fraud and wrongdoing (section 37D claims) and tax has been deducted. Each year you can choose the amount of income you want to receive within regulated limits of between 2.5% and 17.5% of your capital. The fund has recommended limits on the percentage of your retirement fund money you can take every year as an income, depending on your age. If you take a higher income than the recommended limits, the trustees strongly recommend that you take advice from a financial adviser. You can only change your income level once a year at the anniversary date. If you pass away while you are getting a pension from the fund, the full value of your money in the fund will be paid to your nominated beneficiary or beneficiaries in line with your instruction to the fund. Units: The units issued to you by the fund that make up your participation in a portfolio. You, your, yours: The annuitant or owner of this policy whose life is insured in terms of this policy. Fees and charges schedule: The schedule in this policy that states all fees that need to be paid in terms of this policy. 3

4 ALEXANDER FORBES RETIREMENT FUND 3. When the policy starts This policy starts on the date that the administrator receives and accepts your application, including all necessary supporting documentation, and the investment amount. 4. Living annuity 4.1 The fund s in-fund living annuity solution This is the investment amount used to secure an in-fund living annuity solution provided by the fund. It comes from your retirement fund benefits, following your retirement in terms of the rules of the fund. The rules of a living annuity are defined in the Income Tax Act of 1962 and are regulated by notices issued by the minister of finance in the government gazettes from time to time. 4.2 How the value of policy benefits is determined You will have the right to an annuity income from the fund. The value will be decided by the value of the assets that make up the units in the portfolio. The value is subject to the provisions of this policy. 4.3 Annuity income When you can choose the annuity income At the start of this policy you can choose an annuity income and how often it will be paid. You can change your selection at every anniversary date of this policy. Limits on the annuity income you choose Your selected annuity income for each year cannot be less than 2.5% and cannot be greater than 17.5% of the investment amount or the value of your investment account at any anniversary. Regulators can change this percentage from time to time. When your annuity income is paid You can choose for your annuity income to be paid monthly, quarterly, half-yearly or yearly. The fund must pay you the annuity income after the deduction for income tax and other deductions that you have requested and that are allowed. The income level is not guaranteed The level of income you choose is not guaranteed for the rest of your life. If you set an income that is too high, you can run out of funds if you live longer than expected or if the return on the investment is lower than needed to provide a sustainable income for life. Choose an annuity income that is sustainable You and your financial adviser need to ensure that the income you choose is at a level that is sustainable for the rest of your life. You need to manage your income drawdown (as the value of your investment gets less) carefully. You need to take into account the income drawdown relative to the return on your investment. The fund has recommended limits The fund has recommended limits on the percentage of your retirement fund money you can take every year as an income, depending on your age. If you take a higher income than the recommended limits, the trustees strongly recommend that you take advice from a financial adviser. The table below shows the recommended limits. Your age at your last Withdrawal limit birthday Under % % % % Over % The recommended limits assume that you will adjust your income percentage over time to maintain the same amount of real income in line with your age. Your financial adviser should explain the advantages and risks to you You need to ensure that your financial adviser has explained the advantages and the risks of the living annuity to you. Your financial adviser should show you a comparison of a living annuity against conventional annuities (where the insurer carries the full investment risk and the risk that you live longer than expected). The fund does not guarantee the annuity income payable to you. If you pass away On your death, an amount equal to the value of the investment account may be paid to your beneficiary as a lump sum. If you don t have a beneficiary, it will be paid to your deceased estate as a lump sum. Your beneficiary can choose to receive an annuity from the fund or buy an annuity outside the fund. This payment is subject to current tax laws and regulations. Regulations All amounts and choices that you have made in terms of this policy are subject to the methods and formulae set by any relevant regulations from time to time. These regulations override any provision of this policy. 4

5 IN-FUND LIVING ANNUITY TERMS AND CONDITIONS 5. Investment amount For you to receive the annuity income, the fund will keep an investment amount in the fund. This investment amount will be used to set up your in-fund living annuity. This will produce an income as often as you have chosen to receive it and confirmed in the quote and application form which form part of the policy. 6. Investment portfolios Portfolios you can choose You can choose a portfolio or a combination of portfolios made available to you by the fund. The fund will invest the investment amount. Investment account The investment account will reflect the investment amount and the positive or negative returns earned on the investment. The fund will reinvest all returns and interest earned by the portfolios you selected. Deductions The fund will deduct the following from the value of the investment account from time to time: Any negative investment returns in the portfolios you selected Any annuity income paid to you Costs, charges and value-added tax (if applicable) 7. Ownership of this policy and the units You are the owner of this policy and the life assured. This means that you are entitled to receive the annuity income and other policy benefits set out in this document. The fund owns the underlying assets for purposes of this policy at all times. You have no right or claim to the assets. 8. Portfolio selection and switching Portfolios available All portfolios will be set up and made available to you at the sole discretion of the fund and its investment managers. Switch investment portfolios You can give written notice at any time to the fund to ask to switch your investment in the selected portfolios to any other single or combination of portfolios. This is subject to availability and any requirements and processing time periods set out by the fund from time to time. Switching always needs to be in line with legislation, allowances made in terms of exchange control regulations and any minimum amount thresholds. This may mean that at times the whole amount in your investment account must be switched. If a portfolio is no longer available The fund may give you written notice if a portfolio is no longer available for investment. You will need to choose another portfolio within the time given in the written notice. If you do not choose another portfolio, the fund will switch your investment in the portfolio to the fund s default portfolio. Types of investment Your living annuity is made up of different underlying types of investment (or asset classes) such as shares, bonds, property and cash. These underlying types of investments have different levels of risk and return. You and your financial adviser need to look at the overall make-up of your living annuity in terms of these underlying types of investments. If you choose too many risky types of investments, you risk losing capital. But if you choose too few risky types of investments, you risk having investment returns that may be too low to sustain your income. Investment limits Although there are no specific limits set for living annuity investments, there are limits for pre-retirement investments done through any approved retirement fund. The Pension Funds Act regulates the maximum limits to the different types of investments that a retirement fund can be invested in. These limits give cautious guidance to protect a member s retirement savings. It is useful to refer to these guidelines to assess the overall asset composition of your living annuity. However, this is not the same as getting professional advice. This also does not take your personal circumstances into account. You should speak to your financial adviser. Broadly speaking, the maximum that retirement funds can invest in the various types of investments are as follows: Share or equity investments 75% Non-government debt instruments 75% Offshore investments 25% Property investments 25% Hedge funds, private equity funds and any other types 15% of investment not specifically mentioned combined Commodities like gold 10% This regulated exposure applies while you are saving up for your retirement through an approved retirement fund. It also applies after retirement, when you normally depend 5

6 ALEXANDER FORBES RETIREMENT FUND on receiving a regular and stable income. At that time, it is usually better to have a more conservative approach to choosing which type of investment to invest in. 11. Transfers to other long-term insurers 9. Beneficiaries Nominate a beneficiary You can nominate, in writing, any one or more beneficiaries to receive the annuity payment or cash lump sum on your death. The total share of benefit as a percentage must add up to 100%. If the percentage does not add up to 100%, your claim may be delayed. Payment will be made in line with the last valid beneficiary nomination registered with the fund. Change the beneficiary nomination You can give written notice at any time to the fund to change or cancel a nomination of a beneficiary. If you do not nominate a beneficiary If you do not nominate a beneficiary, a lump sum will be paid to your deceased estate at the time of your death. 10. Tax treatment Transfer to another living annuity product You can request in writing that this in-fund living annuity benefit be transferred to another living annuity product owned by a long-term insurer, subject to provisions prescribed by the Financial Services Board and the South African Revenue Service from time to time. Once all the transferring requirements have been met, the trustees of the fund will consider and approve your request for the transfer of your in-fund living annuity. The transfer process During the transfer process the fund will ensure that: You will retain your membership until the fund receives instruction of your transfer out of the in-fund living annuity and any outstanding requirements. Your benefit will remain invested in the fund s investment portfolio or portfolios and will be subject to market fluctuations until the transfer-out instruction is received. The transfer-out instruction must be received before the 15th of every month for processing so that your monthly income is not affected. Where documents are received after the cut-off date, we will proceed with the transfer-out process after you receive your income for that month. The fund will not be held liable for any loss you may suffer due to market fluctuations once the transfer process has started. The fund will deduct income tax The fund will deduct income tax from any annuity income payable to you. This is in line with the pay-as-you-earn (PAYE) tables of the Income Tax Act of 1962, as amended or replaced. This assumes that the annuity income is your only income. Tax directives The fund may deduct income tax from any annuity income payable to you in terms of any valid tax directives received by you from the South African Revenue Service and submitted to the administrator in terms of this policy. Pay penalties The fund may deduct and pay any penalties in terms of lawful instructions by the South African Revenue Service. This includes, but is not limited to, penalties for the ITA 88 process. Where the fund fails to make the appropriate deduction Where the fund (in error) fails to make the appropriate deduction and an amount remains outstanding which relates to you, you will be responsible as the affected taxpayer for settling this in full with the South African Revenue Service. Liability of the fund and administrator Neither the fund nor the administrator will be liable for any outstanding amounts owed by you to the South African Revenue Service. 12. Annual review letter The fund will send an annual review letter The fund will send you an annuity income annual review letter and the certificate of existence on each anniversary date of this policy. Confirm your existence If you are a South African citizen, we will confirm your existence through the office of the Director of Home Affairs. If you are not a South African citizen, you will need to complete and return the certificate of existence form to ensure that you continue to receive payment of your annuity. Content of the annual review letter The annuity income annual review letter will specify: the value in the investment account at the time of the review the existing maximum and minimum annuity income limits any change of the annuity income level which may be required to bring it within such maximum and minimum limits. When you receive the annual review letter When you receive the annuity income annual review letter, you must complete it and return it with any documents we need from you to the fund. The address for the return will be given in the letter. 6

7 IN-FUND LIVING ANNUITY TERMS AND CONDITIONS If you do not return the completed annual review letter If you do not return the completed annuity income annual review letter: your annuity income payments may be stopped until the fund receives confirmation of existence referred to above your annuity income payment will default to the last selected rand amount requested as a percentage of the value in the investment account at the anniversary date. However, this default amount will be subject to changes by the fund to ensure that it meets the regulatory prescribed maximum and minimum annuity income limits. 13. Appointment of a financial adviser If you need financial advice If you need financial advice, you can appoint a financial adviser. The fund and the administrator do not provide financial advice. Change or remove the financial adviser If you have appointed a financial adviser and you decide to change or remove the financial adviser, you must give written notice to the fund. The fund will inform your current financial adviser of such change or removal. The change or removal will take effect five business days after the administrator has received the written notice from you. 14. Reviews Review the selected portfolios regularly You must review the selected portfolios regularly to ensure that your selections suit your circumstances. Neither the fund nor the administrator is responsible for your investment selection or for ensuring that you regularly review the appropriateness of the portfolios that you are invested in. Ensure all information provided is true and correct You must ensure that all information that you provide to the fund is true and correct. If you find an error If you find an error in your investment report or statement, you must report it to the fund within 14 days of receiving it. Change in personal particulars If there are any changes to your personal particulars, contact details or banking details, please write to the administrator and provide supporting documentation to let us know. This includes changes to your postal address and address. 15. Liability Responsibility for losses Neither the fund nor the administrator is responsible for any losses suffered by you or a beneficiary as a result of: financial advice given by your financial adviser errors made by a financial product supplier the investment or market risk of the portfolios changes in tax or other legislation delays in processing an application or the rejection of an application because your financial adviser is not a licensed financial services provider or does not have a contract with the administrator your financial adviser carrying out duties which he or she is not allowed to do because of the category of his or her financial services provider licence unauthorised instructions given by your financial adviser the failure of any networks or electronic or mechanical devices the fund providing your appointed financial adviser with details about this policy by telephone or or on a secure website the fund acting on information sent electronically the fund acting on incorrect information where you have not notified us of any changes to your details the delayed sale of assets underlying the units in the portfolio. Processing instructions The administrator will carry out any instructions received from you as soon as possible. This is subject to its administration procedures and any portfolio limits at the time of the transaction. Neither the fund nor the administrator is responsible for delays in processing instructions as a result of extraordinary events that may cause extensive disruptions. The processing of any instructions is subject to: the requirements of the fund the administrator any restrictions or requirements of a portfolio minimum investment amounts the administrator s turnaround times legislation at the time of the instruction. This means that any instruction may be delayed, rejected, withdrawn or suspended for any of the reasons listed above. Insurance The fund and the administrator are insured against fraud, negligence and dishonest behaviour. 16. Fees and charges The fund will deduct all fees and charges The fund will deduct all fees and charges that need to be paid and recovered in terms of this policy. These deductions will reduce the underlying investments of the investment account by the same amount. 7

8 ALEXANDER FORBES RETIREMENT FUND Fees and charges are collected proportionately Fees and charges are collected proportionately across all portfolios where it is appropriate. If you do not want this to occur, you need to provide the fund with written instructions. You are responsible for paying the fund You are responsible for paying the fund the fees and charges set out in the fees and charges schedule attached to this policy. Fees and charges can be amended The fund may amend any of the fees and charges. They will give you three months written notice of these amendments. The fund may give you less than three months written notice if the circumstances require it, for example a change in legislation. Notice of a change in fees or charges The fund will give you notice of a change in fees or charges only if they are recovered directly from your policy. The fund does not have to notify you of any changes in other fees or charges are recovered from a portfolio. The fund will recover from your policy all new fees and charges. 17. Notices and communication Notices and communication will be in writing Every notice or communication to be given, sent or made to you under this policy will be in writing and addressed to you at your last chosen address as notified in writing to the fund. Notices and communication that you address to the fund Any notice or communication that you address to the fund must be delivered or sent by post and addressed as follows: Alexander Forbes Life Limited 115 West Street, Sandton, 2196 PO Box , Sandton, 2146 Telephone: Transactional transactionalquery@aforbes.co.za General queries generalquery@aforbes.co.za or any other nominated address by the fund. 18. Governing law This policy is governed by the laws of the Republic of South Africa. The main legislation applicable is listed below. There may be other applicable legislation not listed. The Exchange Control Regulations as published by the South African Reserve Bank as amended or substituted from time to time. Amendments and replacements of legislation, any directives, notices and practice notes will also be taken into consideration in the administration of your policy. 18. Complaints and dispute resolution If you have a complaint We would like to hear from you if you have a complaint about this policy, the rules and interpretation of it, the service of the administrator, your benefits, or investments. You can do so in person at any of our offices, by at contactus@aforbes.co.za, by phone on or +27 (0) if you re outside South Africa. You can follow our complaints process on the website at Please contact us if you have any questions or if you need more information. Compliance officer The compliance officer will acknowledge the complaint in writing. The compliance officer will give you the contact details of the person who is most likely to resolve the subject of the complaint. Pension Funds Adjudicator The Pension Funds Adjudicator s contact details are as follows: Pension Funds Adjudicator PO Box 580, Menlyn, 0063 Telephone: +27 (0) or +27 (0) Fax: enquiries@pfa.org.za Website: Complaint about the advice If you have a complaint about the advice relating to this policy that was given to you by a financial adviser, you can contact the Ombud for Financial Services Providers as follows: The Ombud for Financial Services Providers PO Box 74571, Lynnwood Ridge, 0040 Telephone: +27 (0) or +27 (0) Fax: +27 (0) or +27 (0) info@faisombud.co.za Website: Legal proceedings for rejected claims If the fund or the administrator reject a claim, you will have three years to start legal proceedings against the fund. Legal proceedings are also referred to as litigation. 8

9 IN-FUND LIVING ANNUITY TERMS AND CONDITIONS This three-year period begins 90 days after our initial rejection of the claim (or any longer period you may be entitled to because of a legal disability). If you do not start legal proceedings within this time, you will lose the right to claim any benefit under this policy. Therefore, if the fund continues to reject or dispute your claim after you have made representations, you should consult a lawyer. The lawyer must begin legal action for you within that time limit so that you don t lose your right to claim. Written notice of the appointment The fund will be obliged to give you written notice of the appointment, identity and contact details of the administrator appointed by it. 23. Loans 21. Recovery of statutory costs Statutory costs are costs that need to be paid according to the law. The fund may recover any tax, duty or levy payable by the fund in terms of any statutory measure imposed. These costs can be paid from: the assets underlying the units in the portfolios for the fund s obligations under this policy income that comes from any assets underlying the units in the portfolios the proceeds from the realisation of any assets underlying the units in the portfolios, held to ensure the obligations in terms of this policy. 22. Cession and assignment Give up or transfer rights Cession and assignment mean legally giving up or transfer the rights to something. You may not give up or transfer any right, title, interest or benefit in this policy in any way, except as stated in note 26 in this document about withdrawing the investment amount. The fund s right to cede, assign, transfer or delegate The fund is the insurer and the administrator. The fund has the right to cede, assign, transfer or delegate any and all of its duties and obligations to an insurer that meets the prescribed legislative requirements. The fund does not need to give notice if it chooses to do so. In this instance the administrator will replace and substitute the fund Any insurer appointed by the fund will replace and substitute the fund: from the date of the cession, assignment, transfer or delegation as the administrator for purposes of this policy and any legislative requirements. The appointed administrator will take over the terms of this policy. In other words, it will be as if you have entered into an agreement with the appointed administrator on the same terms and conditions for the administration of this policy and agreement. The fund will not grant any loans for this policy. 24. Information and record-keeping The fund will keep a record The fund will keep a record for this policy, which will reflect relevant information on your investment. Disclosure of your information The fund will not disclose any of your information to a third party without getting your prior written consent, except as required by law or any competent regulatory or governmental authority or to its service providers in order to give effect to its obligations in terms of this policy. 25. Amendment and variation of policy Change to provisions or conditions of this policy The fund may change any provision or condition of this policy (except where specifically provided otherwise). The fund needs to give you three months written notice (or a period of notice as specifically provided otherwise or that may be needed to adhere to legislation) of its intention to make the change. Your rights and benefits If the fund needs to make an amendment, you will keep the rights and benefits that you have in terms of this policy. However, your rights and benefits may change if the amendment is because of a change in taxation, legislation or the practice or interpretation by any court, legislative or regulatory authority or the fund itself. Waiver or modification If the fund decides to waive (give up) or modify any provision or condition of this policy in any way, this must be done in writing. 9

10 ALEXANDER FORBES RETIREMENT FUND 26. Your options if you no longer wish to continue with this policy No cooling-off period This policy has no cooling-off period. You cannot cancel this policy. Transfer to another long-term insurer This policy only ends if: you choose to transfer this policy to another long-term insurer on your death as provided for when you can withdraw the investment amount. Withdraw the investment amount You can only withdraw the investment amount if: the value in the investment account is less than the amount prescribed in the relevant regulations or legislation to maintain a living annuity policy, and we will deduct all relevant fees, taxes and charges from the amount you withdraw the fund insists on a withdrawal, which will result in the termination of this policy. 27. Procedure on death company or organisation which by law can be a legal person. If the beneficiary is not a natural person If the beneficiary is not a natural person, but a legal person, including a trust, then a cash lump sum benefit will be paid to the beneficiary. Notification The administrator must be notified of your death at the address stated in note 17 in this document. This notification must include: your personal details your identity number a certified copy of your death certificate the policy number issued for this policy any other requirements stipulated by the administrator. Payment of the benefit The administrator will pay the beneficiary or transfer this policy to a long-term insurer nominated by the beneficiary. This is subject to processing requirements and any applicable tax directives from the South African Revenue Service. If there is no surviving beneficiary If there is no surviving beneficiary at the time of your death, a lump sum may be paid into your deceased estate. In the event that there is a surviving beneficiary who dies before the payment of a death benefit, then that death benefit will be paid into the deceased estate of that beneficiary. 28. Conflicts of interest If the beneficiary is a natural person In the event of your death, subject to the relevant regulatory provisions and legislation, if the beneficiary is a natural person, the beneficiary can either elect payment of a cash lump sum or the payment of an annuity. The beneficiary can buy an annuity from the fund or from another longterm insurer in terms of relevant regulatory provisions and legislation. A natural person is a real human being, not a Conflicts of interest The conflicts of interest management policy is available on the fund s website under Risk and Compliance on 10

11 IN-FUND LIVING ANNUITY TERMS AND CONDITIONS 29. Time periods for carrying out your instructions Instruction Investments Switches Monthly annuity income payments Monthly annuity income payments for new applications Change in monthly annuity income at anniversary Cut-off time in receipt of instruction and all requirements We will carry out your instructions within four business days if both of the following conditions are met: We receive your written instructions together with all requirements before 10:30 on a business day. Your instructions are complete and accurate. If we receive your instruction after 10:30, we will treat it as if you gave it on the following business day. We will carry out your instructions within five business days if both of the following conditions are met: We receive your written instructions together with all requirements before 10:30 on a business day. Your instructions are complete and accurate. If we receive your instruction after 10:30, we will treat it as if you gave it on the following business day. Annuity income payments will be paid by the 25 th of every month. If the 25 th is not a business day, payment will be made on the day preceding the 25 th. New applications together with all requirements need to be received by 10:30 the business day before the 15 th of a month for payment in that month. If you miss the cut-off time, the first payment will be in the following month. Instructions together with all requirements need to be received by 10:30 the business day before the 15 th of your anniversary month for payment in that month. If you miss the cut-off time, the change will be delayed for a month. 11

12 ALEXANDER FORBES RETIREMENT FUND Annexure: Fees and charges schedule The fund will charge the following fees in terms of this policy. Costs The fund does not charge any upfront administration, investment or advice fees. Your financial adviser may charge an initial advice fee, which you must agree with first. The initial advice fee is limited to 1.00% excluding VAT, as set by the fund trustees. The fee for administration and investment is combined. It does not include the fee for advice. The fee will depend on the investment portfolio chosen. The fee for each of the core portfolios is listed below. Name of portfolio AF Protector AF Passive Protector AF High Growth AF Balanced High Growth AF Passive Bold Fee for the portfolio 0.89% of the money in the fund each year plus performance fees if applicable 0.60% of the money in the fund each year plus performance fees if applicable 0.99% of the money in the fund each year plus performance fees if applicable 0.80% of the money in the fund each year plus offshore cost plus performance fees if applicable 0.60% of the money in the fund each year You can see information about the fees on the Investment portfolios when you get an annuity from the fund document that is available when you log onto You can get ongoing advice if you need it or if you are choosing to draw more income than set out in the income limits. You and your financial adviser need to agree on the amount that can be paid for this advice. The fund s trustees state that the maximum advice fees for financial advisers is 0.75% excluding VAT of your money in the fund each year. Other charges Please note that the value of an investment in a portfolio or the proceeds from a portfolio may be reduced because of exit, termination or switching charges levied by product suppliers. The fund does not levy any such charges. The fund will recover from the portfolio any VAT which is charged on fees or charges and add it to the relevant fee or charge. Alexander Forbes Life is a licensed financial services provider (FSP 1178). This information is not advice nor is it intended as a personal recommendation, guidance or a proposal on the suitability of any financial product or course of action as defined in the Financial Advisory and Intermediary Services (FAIS) Act. While care has been taken to present correct information, Alexander Forbes and its directors, officers and employees take no responsibility for any actions taken based on this information, all of which require advice. Please speak to your financial adviser for tailored advice based on your individual financial needs before you make financial decisions based on this information. The information in this document belongs to Alexander Forbes. You may not copy, distribute or modify any part of this document without the express written permission of Alexander Forbes. Alexander Forbes Communications. Photos: Gallo Images In-fund-LA-T&Cs