STANDARD LIFE TRUST COMPANY TAX-FREE SAVINGS ACCOUNT FOR ELIGIBLE PARTICIPANTS OF THE STANDARD LIFE ADVANTAGE PROGRAM Arranged in conjunction with THE STANDARD LIFE ASSURANCE COMPANY OF CANADA and STANDARD LIFE ASSURANCE LIMITED
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INTRODUCTION The Tax-Free Savings Account ( TFSA ) is a savings plan that is governed by the Income Tax Act (Canada) and its regulations that is sponsored by an employer or an organization for Eligible Participants. This Member booklet sets out the terms of the Plan which is funded through a Group Retirement Solutions policy with The Standard Life Assurance Company of Canada (Standard Life Canada) and Standard Life Assurance Limited (Standard Life) issued to the Plan Sponsor (the Policy ). Standard Life Canada invests and manages premiums in the Standard Life Canada Pooled Funds and the Standard Life Canada Guaranteed Funds described in the Policy and Standard Life invests and manages premiums in the Standard Life Guaranteed Funds described in the Policy. Standard Life Guaranteed Funds are only made available to those Members whose investments in Standard Life Canada Guaranteed Funds have reached the Assuris maximum limit for registered group policies and who wish to secure additional Assuris coverage by investing in Standard Life Guaranteed Funds. All contributions made will be applied under the terms of the Policy and according to the government requirements which pertain to the operation of the Plan. Each Member will receive this Member booklet, which includes the provisions of the Plan. Sole authority to amend this Member booklet rests with Standard Life Canada. If there are any changes to this Member booklet, the Member will be supplied with the appropriate amendment. At least once every year, each Member will receive a statement showing his or her financial activities under the Plan. Standard Life Canada is responsible for the overall operation and administration of the Plan and entrusts the Plan Sponsor to act on its behalf for the benefit of the Plan Members. The account of each Member under the Plan is maintained for his or her exclusive benefit. This Plan will be submitted to Canada Revenue Agency by Standard Life Canada for registration as a TFSA under the Income Tax Act. 3
DEFINITIONS "Act" or "Income Tax Act" means the Income Tax Act (Canada), especially but not limited to section 146.2, and its regulations as well as any other applicable provincial income tax legislation and related regulations, as they all may be amended from time to time. "Contribution Room" means the maximum TFSA contributions allowable as reported annually by Canada Revenue Agency on the TFSA Contribution Limit Statement. "I", "my", "you", "your", "Member" and "Eligible Participant" refer to any person who is a participant of a specified group identified by the Organization, or the Spouse thereof, who meets the eligibility requirements and has joined the Plan. "Organization" means the entity who acts as agent for and on behalf of a specified group in respect of this TFSA. "Over-Contributions" means any contributions exceeding the Contribution Room by an amount in excess of the allowable cumulative limit set by Canada Revenue Agency. "Plan" means the TFSA funded through the Policy issued to the Plan Sponsor. "Plan Sponsor" means the policyholder of the Group Retirement Solutions policy issued jointly by Standard Life Canada and Standard Life for the purpose of the Plan. "Spouse" means anyone who is recognized as a spouse or a common-law partner in the Act. "Standard Life Canada" refers to The Standard Life Assurance Company of Canada. "Standard Life" refers to Standard Life Assurance Limited. 4
MEMBERSHIP Am I Eligible To Become A Member? You are eligible to join the Plan if you are a participant of a specified group identified by the Organization, as permitted by such Organization. Your Spouse may also join the Plan, as permitted by the Organization. How Can I Become A Member? You may join the Plan by simply completing and submitting a signed application for membership. When Can I Join The Plan? You can join the Plan at any time. CONTRIBUTIONS How Do I Make Contributions? You can make contributions at your convenience through any of the following options: a) by writing a personal cheque to The Standard Life Assurance Company of Canada; b) by preauthorized cheque; c) by direct deposit through the Standard Life Canada VIP Room; or d) by any other electronic means acceptable to Standard Life Canada. How Much Can I Contribute? You can contribute any amount up to your allowable Contribution Room. Your contributions are not deductible for tax purposes. How Long Can I Contribute? You can contribute to the Plan as long as you continue to be an Eligible Participant. 5
What About Transfers From Other Plans? The Act allows you to transfer any amount from another TFSA into this Plan, tax-free. Details on how to arrange such a transfer are available from Standard Life Canada. What Happens If I Over-Contribute? It is your sole responsibility to ensure that your contributions do not exceed the permitted maximums. Over-Contributions are subject to a penalty tax under the Act. If you over-contribute, you may apply to withdraw any amount necessary to reduce the penalty tax applicable to Over-Contributions to taxfree savings accounts, as stipulated under Part X1.01 of the Act. INVESTMENTS How Are Contributions Invested? Investment decisions are made by the Member. Contributions can be invested in one or more of the Funds available under the Group Retirement Solutions Policy. While there currently is no minimum contribution requirement, a minimum contribution requirement may be prescribed at a later date. TERMINATION OF MEMBERSHIP When Does My Membership In The Plan Terminate? Your membership in the Plan terminates when you no longer meet the eligibility requirements under the Plan. Standard Life Canada reserves the right to terminate your membership in the Plan if your account has been inactive for more than five years and its value is below the minimum amount set by Standard Life Canada from time to time. In such case, the value of your funds will either be paid in accordance with your instructions and failing so, as a lump sum in cash. 6
What Happens If I Terminate Membership In The Plan? If your membership in the Plan ceases, you will not be permitted to make further contributions. You cannot remain in the Plan as a non-active Member. You will be required to provide Standard Life Canada with instructions as to the disbursement of the funds to your credit under the Plan. Details about the options available to you when your participation in the Plan ceases can be obtained from Standard Life Canada. WITHDRAWALS Can I Withdraw Funds From The Plan? Withdrawals can be made under the Plan subject to a minimum amount per Fund as set by Standard Life Canada from time to time. What Is The Impact When I Make Withdrawals? Any withdrawal of your contributions and related earnings, other than a withdrawal of Over-Contributions, is not taxable, and will be added to your contribution room for the following year. If you withdraw money, you cannot reinvest it in your TFSA in the same year unless you still have contribution room. Withdrawals will only create contribution room in the following year. TRANSFERS What About Transfers To Other Plans? You may transfer the value of your funds without incurring tax to another TFSA. 7
ANNUITY PURCHASES What If I Want To Purchase an Annuity Instead? You can apply the value of your funds to purchase a life annuity pursuant to subsection 146.2 of the Income Tax Act and the terms of this Plan. RETIREMENT When Can I Retire? Under this Plan, you may begin to receive retirement income at any time. If I Purchase An Annuity, How Is The Retirement Income Payable? The retirement income is payable as an annuity in equal annual or more frequent instalments except where such instalments may be increased or decreased in accordance with the Act. What If I Want To Make Some Changes After I Begin To Receive My Annuity? You cannot change the form in which your annuity is paid or change your joint annuitant once you have started to receive annuity payments. What Forms Of Annuity Are Available? A wide variety of annuity options are available to you under the Plan, subject to the requirements of any applicable legislation. Assistance with selection of the annuity that best suits your situation is available from Standard Life Canada. Note: Standard Life Canada may require that satisfactory evidence of age be produced, for you or your Spouse, in order to establish the annuity or assess the amount of annuity benefit payable. 8
SETTLEMENT OF SMALL AMOUNTS If the annuity that would be payable at retirement is less than the minimum annuity amount established by Standard Life Canada from time to time, the value of your funds will be paid as a lump sum in cash or will be transferred according to your instructions. DEATH SETTLEMENT Who Receives My Benefits If I Die Before Receiving Retirement Income? You can designate one or more beneficiaries to receive any benefits payable on your death. You can make or, if the beneficiary is revocable, change beneficiary designations by providing a written notice to Standard Life Canada. Notwithstanding the above, if you have appointed your Spouse as your successor holder and that person is living and remains your Spouse at your date of death, that person will become the successor holder of your TFSA in lieu of receiving a death benefit from the Pan. The death benefit is payable to your beneficiary as named or, if no beneficiary has been designated, to your estate. Beneficiary designations are only validated by Standard Life Canada and Standard Life at the time a death benefit becomes payable. What Happens If I Have Appointed A Successor Holder? Standard Life Canada will transfer the value of your account to another account in the name of your Spouse. As successor holder, your Spouse will acquire all of your rights under the account including the right to name, revoke or change any beneficiary designation, subject to restrictions applicable to irrevocable beneficiaries. Investments will be allocated to the same funds until new investment instructions are received by Standard Life Canada. 9
What Is The Death Benefit Payable If I Die Before Receiving Retirement Income? On the first business day immediately following our receipt of written notification of your death, Standard Life Canada will transfer the value of your account on that date to the Standard Life Daily Interest Accumulator (DIA) or to any other fund considered suitable by Standard Life Canada to preserve the value of your account. Such value, plus any interest accrued up to the date of settlement, if any, shall constitute the death benefit. ADDITIONAL PROVISIONS Assignment No annuity payable under the Plan is capable either in whole or in part of surrender, commutation or assignment. If the annuity becomes payable to anyone other than you or your Spouse in the event of your death, it must be commuted. Limitation No benefits or advantages other than those described above will be provided to a Member or annuitant or to a person with whom he or she was not dealing at arm's length on account of this Plan except the advantages derived from the provision of administrative and investment services, as authorized in the Act. 10