FundsAtWork October 2011

Transcription

1 FundsAtWork October 2011

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3 01: What is the story about agenda retirement and insurance planning in South Africa? 02: How will FundsAtWork help you and your clients to write life stories that are clear, simple and safe? 03: Snapshots of all updates

4 01: What is the story about retirement and insurance planning in South Africa? a South Africans do not plan sufficiently for retirement b South Africans are under insured c Retirement reform is coming

5 01:a South Africans do not plan sufficiently for retirement A culture exists of not preserving retirement benefits when changing employers Longevity poses a risk... 6% South Africans will retire comfortably without assistance from government or family and friends Momentum research shows that members of retirement funds expect to live the good life in their retirement years

6 100 year olds, centenarians, are currently the fastest growing population globally USA , 1 mil by 2050 Japan , 1 mil by 2050 UK 9 000, by 2030 China the most globally by 2050 Spain , Canada 5 000, Italy and France 3 000

7 FundsAtWork studies show Members are apathetic and not proactive in managing benefits Members pension or provident funds and group insurance cover are often their only provision for retirement Members trust their employer s judgement South Africans do not engage enough with the financial planning process

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9 Retirement needs focused investment choice adapted to members needs simplified improved

10 01:b South Africans are under insured ASISA* research shows South Africans are under insured approximately 60% for death and disability * Association for Savings and Investments SA

11 Chances of becoming disabled are 13 to 22% for white collar workers 29 to 36% for blue collar workers Predominantly bread winners

12 Research shows that people who become disabled want to return to work and reintegrate into society Introducing rehabilitation and case management increases this potential greatly

13 Research shows that people who become disabled want to return to work and reintegrate into society Introducing rehabilitation and case management increases this potential greatly Claimants normally return to work after 16 to 25 months Disability claimants 61% males and 39% females 47 years old on average at date of disability 45% of claimants earn R to R pa 20% of claimants earn R to R pa

14 It is estimated that stress and depression related diseases kill more than 600 South Africans daily. What causes disability? Muscoskeletal 2% Sensory 5% Neurological 5% Spine 5% Cardiovascular 6% Psychiatry 10% Stroke 12% Other 3% Cancer 9% Specified medical conditions 13% Respiratory 12% HIV/AIDS 10% Trauma 11%

15 Permanent health insurance (PHI) significantly improved New disability benefit added Family Protector improved simplified

16 01:b Retirement reform is coming First paper due out in 2013 First implementations expected in roll out next 10 years but not defined

17 01:b Retirement reform is coming First paper due out in 2013 First implementations expected in roll out Top up market expected to remain as the NSSF is unlikely to meet all insurance and retirement needs NSSF targeting salary replacement of 40% for retirement and insurance next 10 years but not defined

18 02: How will FundsAtWork support you in helping your clients to write stories that are clear, simple and safe? By simplifying and improving FundsAtWork Retirement benefits Insurance benefits Lifestyle benefits Business benefits

19 By simplifying and improving transparency business benefits retirement benefits FundsAtWork product options flexibility insurance benefits The philosophy of transparency, fexibility, ease of use and value for money is still core to the design of FundsAtWork. value for money lifestyle benefits ease of use

20 FundsAtWork retirement benefits placing people among the top 6%

21 Founder Narrator Provider Trader Entrepreneur Momentum Secure Bonus Momentum Active Lifestage portfolios Momentum StableGro Momentum InfationGro Momentum Secure Bonus Conservative Momentum Money Market Momentum MultiManager Money Market Trader portfolios Momentum Bond Momentum Infation Guaranteed Fund Momentum Active Lifestage portfolios Cautious Momentum StableGro Momentum InfationGro Momentum Secure Bonus Momentum Infation Plus Fund Momentum Capital Plus Fund Momentum Gold Bullion Fund Over 300 unit trusts Balanced Momentum Balanced Momentum Passive Lifestage portfolios Momentum MultiManager Balanced Momentum Shari ah Fund Momentum Super Nation Fund Aggressive Momentum Aggressive Momentum MultiManager Aggressive Lifestages Momentum Active Lifestage portfolios Momentum Passive Lifestage portfolios less fexibility more fexibility

22 Founder Narrator Provider Trader Entrepreneur Momentum Secure Bonus Momentum Active Lifestage portfolios Momentum StableGro Momentum InfationGro Momentum Secure Bonus Conservative Momentum Money Market Momentum MultiManager Money Market Trader portfolios Momentum Bond Momentum Infation Guaranteed Fund Momentum Active Lifestage portfolios Cautious Momentum StableGro Momentum InfationGro Momentum Secure Bonus Momentum Infation Plus Fund Momentum Capital Plus Fund Momentum Gold Bullion Fund Over 300 unit trusts Balanced Momentum Balanced Momentum Passive Lifestage portfolios Momentum MultiManager Balanced Momentum Shari ah Fund Momentum Super Nation Fund Aggressive Momentum Aggressive Momentum MultiManager Aggressive Lifestages Momentum Active Lifestage portfolios Momentum Passive Lifestage portfolios less fexibility more fexibility

23 ...simplified and improved Founder Narrator Provider Entrepreneur Guaranteed Dynamic Momentum Boutique / portfolio, cost lifestages easy to use Specialist effective and based on fexibility, for the most NSSF mirror Momentum s infation financially house view targeted range, sophisticated retirement dynamic and insurance lifestage and package guaranteed options less fexibility more fexibility

24 Founder Guaranteed portfolio trustee default Metropolitan MultiManager Smooth Growth (Global) New opportunity presented by the merger Higher investment performance benchmark R5.3 billion already invested

25 Metropolitan MultiManager Smooth Growth (Global) High investment performance benchmark with MVA * Global exposure Momentum Secure Bonus Full capital and liquidity guarantee Notes * Only applicable to new schemes and new members joining a scheme where the trustee default portfolio has been used * Retirement savings currently invested in Momentum Secure Bonus (MSB) will remain in MSB * Momentum StableGro has been removed to avoid duplication * Market value adjuster

26 Fund of SRI 2.5% Hedge Funds 3% Absolute Return 20% Property 7.5% Global Bonds 3% Global Equity 14,5% Metropolitan MultiManager Smooth Growth (Global) The portfolio targets a return of CPI+4% Payments resulting from death, disability, retirement, resignation and retrenchment are paid at book value with no limits RSA Cash 5% RSA Bonds 7% RSA Equity 37.5%

27 Narrator Momentum Lifestages volatility of portfolio returns > 7 years to retirement 5-7 years 3-5 years 0-3 years accumulator builder consolidator defender CPI+7% CPI+6% CPI+5% CPI+3% years to retirement

28 Provider Infation targeted range Momentum Enhanced Factors 7, 6, 5, 4 and 3 Guaranteed range Metropolitan MultiManager Smooth Growth (Global) Momentum InfationGro Momentum Secure Bonus 100% 90% 80% 70% 60% 50% 40% 30% 20% 25% 25% 20% 15% 10% 12.5% 2.5% Global Local equities and property 2.5% 14% 12.5% 7.5% 5% 2.5% Local commodities Local fixed interest 24% 29.5% 30% 25% 32.5% 40% Local absolute return Dynamic lifestages Momentum Lifestages 10% 60% 46% 28.5% 18% 12.5% 0% EF 7 EF 6 EF 5 EF 4 EF 3 Split funding, except in Lifestages

29 Entrepreneur Boutique / Specialist Selected Momentum portfolios Momentum Passive Lifestages Over 300 external portfolios Notes * Momentum Aggressive, StableGro and Infation Plus no longer available * Passive Lifestages only available in Entrepreneur and unit trusts

30 Simplified portfolio pricing Founder, Narrator and Provider 1.5% all-in portfolio fee Entrepreneur Asset management fees apply Asset based fees charged only on external portfolios

31 Key benefits FundsAtWork Asset Consulting Calculate member s expected replacement ratio Improve the probability of achieving retirement objectives Monitor progress over time Help correct investment strategies as needs and circumstances change

32 Easy first steps target 75%+ expected annual income after Founder, Narrator and Provider No additional cost Help with replacement ratios and investment feedbacks replacement ratio = retirement expected Phase 1: face to face with large clients annual salary prior to Phase 2: providing tools for financial advisers retirement (forthcoming attraction) Additional help in choosing split funding and alternative glide paths in Provider

33 Entrepreneur Available at an additional cost applied on either an advisory body or member level Boutique solution

34 Founder Narrator Provider Entrepreneur Metropolitan Momentum Momentum Momentum MultiManager Lifestages Enhanced Lifestages and Smooth Growth Factors 7, 6, 5, Passive (Global) 4 and 3 Lifestages (MMSG(G)) Momentum Mom Lifestages portfolios range MMSG(G), MSB Over 300 unit and Mom trusts InfationGro less fexibility more fexibility

35 FundsAtWork insurance benefits facing the challenges

36 PHI update Employers now have the option to choose a salary replacement benefit of 100% throughout or 100% in the initial period and 75% thereafter Employers can also select an initial period of 12 or 24 months and can choose the disability definitions in order to manage the cost of the benefit Imagine having to survive on 25% less of your salary if you become disabled.

37 Temporary income disability (TTD) added to the FundsAtWork disability benefits Designed for the cost conscious employer Income paid on disability after the expiry of the waiting Monthly income For employees to recover To find alternative work For a term of 6 to 24 months TTD can be structured to provide cover during the waiting periods of PHI and PTD period for a limited time Minimum waiting period 1 month

38 Family Protector base benefits updates Funeral benefit R per main member and spouse R5 000 per child 8 family members covered (the member, up to 2 spouses and 5 children) Education benefit Amount available for children s education following the death of a member to supplement group life cover Lump sum of R (max of R per child) Up to 5 children covered

39 Provider and Entrepreneur members have more fexibility and can increase the amount of cover they enjoy. Health premium waiver Pays medical scheme premium following the death or disability of member Only for members on Momentum Health Pays for 12 months

40 Founder Disability Death PHI permanent health insurance benefits benefits PTD lump sum disability PHI, PTD, CIP GLA CIP capital income provider and dread disease GLA group life cover 3 options Family Protector BASE

41 Narrator compulsory insurance benefits Disability benefits Death benefits PHI at 75% of salary Life Eventing GLA Family Protector BASE

42 Narrator the all-in-one option FundsAtWork Life Eventing Insurance benefits compulsory on Narrator PHI remains on 75% fixed for the Narrator option Initial period on PHI changed to 12 months and is fixed Group life cover GLA automated cover changes high 17.5% medium 15% low 10% 1 age Permanent health insurance PHI at 75% of salary, 12 months

43 Provider / Entrepreneur Disability benefits PHI, PTD, CIP, TTD and Death benefits GLA, SAC, spouse s life Family Protector PLUS Funeral benefit add children add cover add parents / parents-in-law dread disease 3 options cover and accidental death Education benefit add children add cover Family Protector BASE Family Protector PLUS Health premium waiver add years add another medical scheme

44 FundsAtWork lifestyle benefits living life in style Momentum Multiply FundsAtWork members of the umbrella or preservation funds have access to the Multiply wellness programme Read more here

45 Home loans With the employer s agreement, individual members under the FundsAtWork umbrella funds have access to pension backed guaranteed home loan facilities at Smart accounts FNB Smart Accounts are available to all members who withdraw from the FundsAtWork umbrella funds and do not have active bank accounts preferential rates SMSes and s Note * Momentum Secure Bonus remains the default portfolio to members Be up to date on member transacting and benefit balances for home loans

46 Employee contributions can be invested sooner into the FundsAtWork business benefits making life easier market, leading to better long confirm contributions term retirement savings bank transfer 1 to invest manual EFT??? Potential additional retirement saving for the scheme R R R R R }Employees per scheme hours } manual administration working days * Period of 40 years

47 Real time control Employer controls all aspects of the monthly contribution process Claims process: withdrawal benefit paid out day after More benefits External educators Online transacting Cellphone and notification member leaves fund using employer portal notification Financial adviser can perform all functions on behalf of employer manual vs electronic

48 Founder Narrator Provider Entrepreneur MMSG(G) trustee default Standard GLA, PHI, PTD and CIP Momentum Lifestages Life Eventing GLA and PHI EF 7 to 3 Mom Lifestages MMSG(G), MSB Momentum InfationGro All FlexiCovers and Life Eventing options Passive Lifestages Momentum portfolios range Over 300 unit trusts All FlexiCovers and Life Eventing options less fexibility Family Protector BASE more fexibility

49 Snapshots Trader option removed MMSG(G) in Founder All-in 1.50% fee in Founder, Narrator and Provider Entrepreneur asset based fees on external portfolios only Narrator PHI update Lifestage portfolio update Momentum Aggressive, StableGro and Infation Plus removed Momentum Passive Lifestages to Entrepreneur Provider portfolios change and split funding added

50 Temporary income disability (TTD) added Permanent health insurance (PHI) improved Maximum now 100% Employers can select 12 or 24 months initial period Employers can choose the disability definition Family Protector updates to meet all salary bands needs

51 coming soon Quoting 1 February Installations 1 March

52 special offer Health Income Protector (HIP) 10% off on FundsAtWork disability insurance product premiums when taking 1 HIP + 2 Momentum Health + 3 FundsAtWork disability benefit Key terms Valid until 31 December 2012 The discount will be applied annually while both benefits are selected Available immediately

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