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24053_MPA_ENG_cover.indd
the future starts now
the Mana¯ed Pension Account
SK2750/INT12-0378/July 2012
www.skandiainternationalhk.com
Skandia International, part of the wealth management business of Old Mutual plc, is the international group of companies which provides offshore and cross-border investment solutions.
Calls may be monitored and recorded for training purposes and to avoid misunderstandings.
Royal Skandia’s Hong Kong offi ce: 24th Floor, Henley Building, 5 Queen’s Road Central, Hong KongPhone: +852 3552 5888 Fax: +852 3552 5889 E-mail: [email protected]
Authorised by the Insurance Authority of Hong Kong to carry on long term business.
Royal Skandia Life Assurance Limited is registered in the Isle of Man under number 24916C.
Registered and Head Offi ce:Skandia House, King Edward Road, Onchan, Isle of Man, IM99 1NU, British Isles.Phone: +44 (0)1624 655 555 Fax: +44 (0)1624 611 715.
Authorised and regulated by the Isle of Man Insurance & Pensions Authority.
Royal Skandia is a member of the Association of International Life Offi ces.
for Hong Kong market only
Important information
• This product is an investment-linked assurance scheme (‘ILAS policy’). It is a life assurance policy issued by Royal Skandia Life Assurance Limited (‘Royal Skandia’). Your investments are subject to the credit risks of Royal Skandia.
• The contributions you pay towards your ILAS policy, and any investments made by Royal Skandia in the underlying funds you selected, will become and remain the assets of Royal Skandia. You do not have any rights or ownership over any of those assets. Your recourse is against Royal Skandia only.
• The contributions you pay, after deduction of any applicable fees and charges of your ILAS policy, will be invested by Royal Skandia in the underlying funds you selected. Your ILAS policy value will be calculated by Royal Skandia based on the performance of your selected underlying funds.
• Due to the various fees and charges levied by Royal Skandia on your ILAS policy, the return on your ILAS policy as a whole may be lower than the return of the underlying funds you selected.
• Early surrender or withdrawal of the policy/suspension of or reduction in contribution may result in a signifi cant or even a total loss of principal (contributions) and bonus awarded. Poor performance of underlying funds/assets may further magnify your investment losses, while all charges are still deductible.
• The investment-linked funds available under this product can have very different features and risk profi les. Some may be of high risk.
The following documents constitute the Principal Brochure:
• the Mana¯ed Pension Account brochure; and
• the ‘Details of the Royal Skandia investment-linked funds’
2
contents at a ¯lanceintroduction 4
the Managed Pension Account – a great start when you’re planning for your retirement 4
benefi t from the strength and reputation of Royal Skandia 5
an ideal place to put your investment 6
what is the Managed Pension Account? 7
investing with your Managed Pension Account 8breadth of investment opportunities 9
changing your investment choice 9
making contributions to your Managed Pension Account 10
changing your contributions 10
missing contributions 11
stopping contributions 11
accessing your investment 12encashing via the charge-free allowance 13
encashing via the fi xed account 14
full or partial encashment 14
full payment at maturity 14
taxation matters 15tax effi ciency 15
your personal tax circumstances 15
charges that may apply to your Managed Pension Account 16
charges summary 17
charges in detail 18
your Managed Pension Account 21how to apply 21
policy maintenance 21
payment at maturity 21
payment before maturity 22
termination 22
your right to change your mind 22
further information 23
3
Retirement may seem a long way off at the moment, but it’s all too easy to fall into the trap of thinking there is plenty of time to prepare fi nancially.
With advances in healthcare and social conditions, we are generally living longer. Besides, most people are now choosing to retire not just earlier but also in style. So, the earlier you start saving for your retirement the sooner your dreams come true.
The Managed Pension Account is specifi cally designed for medium- to long-term savings. It enables you to invest regular amounts over your selected investment period (‘Account term’) and lump sums at any time. This provides you with the fl exibility to respond quickly when there are changes in your life or new investment opportunities. It also gives you access to your money should you need it.
the Mana¯ed Pension Account – a ¯reat start when you’re plannin¯ for your retirement
A ¯reat startAt commencement, to help your Managed Pension Account get off to a good start, we will increase your initial investment by adding an extra 5% allocation* to each regular contribution due and paid during the fi rst year. That means for every regular contribution of $100 you put into your Account, we increase it to $105 for you.
And that’s not all. Once the account has been set up, if you increase your regular contributions, we will also add an extra 5% allocation* to each additional amount of the regular contribution during the fi rst year of the increase.
A ¯reat fi nishAt maturity, we will also give a loyalty bonus based on the bid value of the regular contributions (See page 13 ‘calculating your Account value’), provided that the regular contributions have been paid throughout the Account term. Depending on your Account term, the maximum loyalty bonus is 5%. It will be credited as additional units across your selected investment-linked funds. (See page 14 ‘full payment at maturity’.)
The extra allocation and the loyalty bonus do not apply to lump sum contributions.
Please note that Managed Pension Account is a contractual policy and runs for a selected Account term. If you encash it earlier, you will be subject to an early encashment charge as detailed on page 19.
* The 5% allocation is not the same as a 5% investment return as your investment is subject to investment risk.
4
Royal Skandia is a company within Skandia International. Skandia International, part of the wealth management business of Old Mutual plc, is the international group of companies which provides offshore and cross-border investment solutions.
Originating in South Africa in 1845, the Old Mutual group has a balanced portfolio of businesses offering asset management, life assurance, banking and general insurance services in 33 countries, primarily in South Africa, Europe, Latin America, Asia and North America. Old Mutual is listed on the London and Johannesburg Stock Exchanges, amongst others.
benefi t from the stren¯thand reputation of Royal Skandia
Being part of Old Mutual makes Skandia International a key division of one of the largest life assurers in Europe, with a strong fi nancial base. The Old Mutual group has funds under management of £267.2 billion*, serving more than 12 million customers.
We recognise the importance of providing innovative, fl exible investment solutions and local support to our customers. Therefore, we opened our branch offi ces in Hong Kong in 1991 and Singapore in 2008 as our Asia hubs. We have local, dedicated teams with a wealth of experience, local market knowledge and international exposure. You can be assured that you are investing with a company that truly understands the needs of international investors.
At Skandia we also continue to set new, higher standards to deliver ever-improving products and a wider investment choice.
* As at 31 December 2011, source: Old Mutual
5
Royal Skandia is based in the Isle of Man which is part of the British Isles. The Isle of Man has its own government and the longest continuous parliament in the world. All the life assurance companies based on the island are closely regulated by the Isle of Man Insurance & Pensions Authority. Therefore, the Isle of Man is an established offshore investment centre offering a politically and economically stable environment. That’s why a lot of fi nancial and related services set up their head offi ces on the island. You can fi nd out more on www.isleofmanfi nance.gov.im.
Of all the major offshore centres, the Isle of Man is one of only a few that has a statutory compensation scheme – the Isle of Man Life Assurance (Compensation of Policyholders)
an ideal placeto put your investment
Regulations 1991. In the event of insolvency, policyholders are entitled to claim compensation of up to 90% of the encashment value of their policies under the compensation scheme. The compensation scheme operates globally no matter where the investors reside. Notwithstanding the availability of the compensation scheme, there is no guarantee that you will get back up to 90% of your contributions paid or the prevailing value of your account. The fi nal value you receive, if any, may be less than the total contributions paid or the prevailing value of your account.
This liability to policyholders is administered by the Insurance & Pensions Authority of the Isle of Man, which levy contributions from all participating insurers. These contributions are held in
a Policyholders’ Compensation Fund. In the event that the fund is insuffi cient to sustain any claims made, the Insurance & Pensions Authority may defer, reduce or extinguish any amounts payable as compensation. Full details of the Regulations can be found on www.isleofmanfi nance.gov.im.
In recognition of the Isle of Man’s status as the leading offshore base, from 2001 to 2009 (with the exception of 2007) it has been voted ‘Best International Financial Services Centre’ at the International Investment International Fund & Product Awards. In 2007 and 2010, it was highly commended in the same category.
6
The Managed Pension Account is an investment-linked life assurance policy. You select your retirement age which will then determine your Account term at commencement. The minimum term towards your selected retirement age has to be at least fi ve years and the maximum retirement age is 65 (subject to a maximum term of 25 years).
This Account offers a way of investing for the future within the structure of a life assurance policy, so that you can enjoy greater fl exibility via switching than by making the same investments directly. The Account is issued as a group of 10 identical policies,
what is the Mana¯ed Pension Account?
primarily for investors who are or become UK resident and may be affected by UK tax rules. The policies can be encashed equally or just a few specifi cally.
The Account is available to individual, corporate and trustee investors. It is based on regular contributions. These can be monthly, quarterly, half-yearly or annually, and in HK$, £, US$ or €. You can also, if you wish, make lump sum contributions.
The Managed Pension Account puts you in control of your fi nancial plans by enabling you to allocate your
contributions to a portfolio of your chosen investment-linked funds to match your investment objectives. You can also change your investment choice at any time as your goals change over the Account term.
The value of your Account units is calculated with reference to the value of the underlying assets, so your Account value will be dependent upon the performance of those assets. It may fall as well as rise and cannot be guaranteed.
investment-linked funds
Investment-linked funds are set up by life assurance companies to invest in unit-trusts, collective investment schemes and other assets. These are known as the ‘underlying assets’.
The performance of each Royal Skandia investment-linked fund normally matches that of the underlying assets to which it is linked. If the value of the underlying assets rises or falls, so does the value of our investment-linked fund – and so does the value of your allocated units of the investment-linked funds. However, the extent of rise and fall in the value of the Royal Skandia investment-linked fund and that of the underlying assets may not be identical or may be lower because of the Royal Skandia investment process and charges detailed on page 16.
Each of the investment-linked funds in our range is made up of units of equal value. Units in selected Royal Skandia investment-linked funds will be allocated to you as regards your contributions net of charges. The number of units in any Royal Skandia investment-linked fund you have chosen represents your notional amount Royal Skandia usually has invested in the underlying assets. Your allocated units are notional and are solely for the purpose of determining the value of your Account.
Although you legally own the policy, the legal and benefi cial interests of the underlying assets belong to Royal Skandia. So, you do not have legal or benefi cial interests in the underlying assets. Your recourse is against Royal Skandia only.
7
what the Mana¯ed Pension Account enables you to do
• Access an extensive fund range managed by world-class specialists from just a minimum regular contribution of HK$1,800/ £150/ US$225/ €225 per month.
• Choose and switch the investment-linked funds within your Account – currently free of switching charge (see page 9 ‘breadth of investment opportunities’).
• Make lump sum contributions if you wish on top of regular contributions, subject to our acceptance (see page 10 ‘making contributions to your Managed Pension Account’).
• Access your money whenever you wish (see page 12 ‘accessing your investment’).
• Enjoy tax advantages, depending on your personal circumstances (see page 15 ‘taxation matters’).
• Receive death benefi t of 101% of your Account value.
investin¯ with your Mana¯ed Pension Account
8
breadth of investment opportunitiesdesignated in a different currency to the underlying funds/assets themselves may rise and fall purely as a result of exchange rate fl uctuations. Hence, the investment is subject to currency risk.
The Managed Pension Account gives you access to an extensive range of investment-linked funds whose underlying assets are managed by world-class fund management companies. They cover a wide spectrum of asset classes, investment strategies and geographic regions.
Our investment proposition is split into two distinct offerings:
• Self-select
• MultiManager
For more information about the range of choice available, please refer to details of the Royal Skandia investment-linked funds.
Investment involves risks. In considering this investment, you should be aware that the value of the investment-linked funds is not guaranteed as their prices may fall as well as rise. The value of investment-linked funds that hold assets
As your fi nancial goals change, you can simply and quickly change (or ‘switch’) your investment-linked funds. This is currently free of charge. You can also select different investment-linked funds for new contributions. This ensures that you are not locked into the fortunes of an investment-linked fund or fund management group in the future.
chan¯in¯ your investment choiceYou can split contributions to your Account between up to 10 investment-linked funds at commencement. Each investment-linked fund is denominated in the same currency as your contributions. No less than 1% of the total of any contribution can be allocated to any investment-linked fund.
9
You can make regular contributions in the following currencies to your Account.
Minimum contributions – re¯ular
Minimum contributions - lump sum on top of re¯ular if chosenYou can make lump sum contributions only if you are also making regular contributions.
You can make your contributions by bank standing order, telegraphic transfer, cheque, banker’s draft or credit card payment.
makin¯ contributions to your Mana¯ed Pension Account
Frequency To start your Account Future increases
Regular HK$ £ US$ € HK$ £ US$ €
Each month 1,800 150 225 225 120 10 15 15
Each quarter 5,400 450 675 675 360 30 45 45
Each half-year 10,800 900 1,350 1,350 720 60 90 90
Each year 18,000 1,500 2,250 2,250 1,200 100 150 150
Frequency At start of your Account Subsequent top-up
Additional lump sum on top of regular
HK$ £ US$ € HK$ £ US$ €
12,000 1,000 1,500 1,500 12,000 1,000 1,500 1,500
When setting up your Account, you should choose a contribution level that you are confi dent that you can maintain for the full Account term until your selected retirement age.
You can increase the regular contributions at any time, subject to
chan¯in¯ your contributionsour acceptance. If you pay by credit card you can choose to automatically increase your contributions by 5% or 10% on each Account anniversary.
You can also reduce regular contributions subject to the minimum contribution level at the time as
stated in the table. But if you do not maintain them at your previous ever highest committed level in any Account year, we will apply a ‘contribution servicing charge’ by cancelling units from your Account. (See page 18 ‘contribution servicing charge’)
10
If you stop making regular contributions, the value of your Account units will continue to change in line with any growth subject to investment risk. All charges, including the maintenance charge and contribution servicing charge, will continue to be applied. Stopping
If you miss any regular contributions within the preliminary period and they are not repaid by the end of three months which is also within the preliminary period, the Account will terminate without value and you will not get anything back. If you miss your regular contributions after the preliminary period, they must be paid
missin¯ contributionswithin the three months; otherwise the Account will become ‘paid-up’. This means that it will remain in force but all charges, including the maintenance charge and contribution servicing charge, will continue to be applied. If the Account value is insuffi cient to cover the charges, the Account will terminate without value.
stoppin¯ contributionsregular contribution is treated the same as missing regular contributions for purpose of calculation of contributing servicing charge. If you stop making regular contributions within the preliminary period, however, the Account will terminate without value.
lump sumsIf you have made any lump sum contributions at commencement, during the preliminary period or at any time even though the regular contributions have stopped, they will remain in force and the maintenance charge will continue to be applied.
Any regular contributions which have been outstanding for more than three months and are subsequently paid will be treated as lump sum contributions for unit allocation. The contribution servicing charge applied will not be recredited.
preliminary period
Except for lump sum contributions, the Managed Pension Account has no surrender value within a ‘preliminary period’. The length of the preliminary period differs according to the Account term selected. It is ‘n’ months where ‘n’ equals the number of full years in the Account term. For example, a 10-year Account term will have a preliminary period of 10 months.
The maximum preliminary period is 24 months.
11
accessin¯ your investment
12
The Managed Pension Account is designed for long-term regular investment over a fi xed period but it also provides convenient ways to access your investment.
encashin¯ your Account
You can take out 1% of your Account value as charge-free allowance without an early encashment charge. The allowance is calculated on the selling (bid) value of the investment-linked funds purchased by regular contributions at each Account
anniversary. It is cumulative and so if you do not use it, you can carry it forward for future years. However, the allowance cannot be taken in advance. Each time you encash your Account, the allowance accumulated will be used fi rst to reduce the
encashin¯ via the char¯e-free allowance
encashed amount before calculating any applicable early encashment charge.
The allowance only applies to regular contributions and not to lump sum contributions.
After a preliminary period (see page 11), you can request encashments:
• via a ‘fixed account’
• by fully or partially encashing your Account.
• via a ‘charge-free allowance’ with either nil or reduced early encashment charge
calculatin¯ your Account value
The value of your Account units will normally increase or decrease in line with changes in the value of the underlying assets and any reinvested income received from those assets. The value will also be affected by Royal Skandia charges.
Units in investment-linked funds are priced in two ways. There is the ‘bid’ price, at which they are sold, and the ‘offer’ price at which they are bought. The difference between the two is called the ‘bid/offer spread’. The spread is used to take account of the costs described above. In the case of the Managed Pension Account the bid/offer spread on contributions is 7%.
Whenever you encash your Account value subject to the early encashment charge explained on page 19, the surrender value is calculated by multiplying the number of Account units by the bid price of units on the transaction date. This will normally be the working day after we receive your completed withdrawal request and relevant documents at our Head Offi ce.
In certain circumstances, the bid price can be infl uenced by the volume of transactions taking place on any particular day.
13
Another way to access your capital during your Account term is with our fi xed account. When you use this facility, you are taking an interest-free loan up to the lower of 50% of your Account value or 90% of your surrender value.
The fi xed account is only available where encashments are greater than HK$60,000, £5,000, US$7,500
encashin¯ via the fi xed accountor €7,500. The early encashment charge will not apply to this loan, providing your Account is maintained until the end of its term.
You may repay all of the loan at any time. If you only repay part of the loan, you should ensure the remaining part of the loan meets our minimum loan amount at the time.
When your Account matures, the value of your Account units – plus the loyalty bonus at maturity – is available to you as a lump sum, provided that the regular contributions have been paid throughout the Account term.
The loyalty bonus is calculated as below subject to a maximum of 5%:
You can fully or partially encash your Account subject to an early encashment charge where applicable. (See page 19 ‘early encashment charge’)
If any loan is not yet repaid before full encashment or end of your Account term, the outstanding loan will be deducted from the encashment or maturity value.
The fi xed account is charged an additional HK$69, £5.75, US$8.60 or €8.60 per month until the loan is fully repaid. We reserve the right to decline an application for a fi xed account.
full or partial encashment
full payment at maturity
The charge only applies if the value of the encashed amount is greater than the available charge-free allowance.
Early encashment of regular contributions is available after the
0.2% x the selling (bid) value of investment-linked funds purchased by regular contribution units on maturity date x Account term in full years.
For example, a loyalty bonus of 5% (ie 0.2% for each account year x 25 years term) will be added on the maturity date at the end of a 25-year
Account term. But, any lump sum contribution units or units in the fi xed account will not be counted.
You should also be aware that Royal Skandia reserves the right to defer payment of the maturity value in the circumstances when realisation of underlying assets cannot be carried out at normal market condition.
preliminary period subject to an early encashment charge where applicable, whereas you can encash your lump sum contributions at any time without an early encashment charge.
14
As Royal Skandia is located in the tax-effi cient offshore centre of the Isle of Man, your investment will grow virtually tax free.
Under Isle of Man law, there is no liability to tax on income tax, capital
taxation matterstax effi ciency
gains tax or corporation tax on funds linked to policies. Some dividends may be received net of withholding tax, deducted at source in the country of origin, but once inside your Account they can accumulate
your personal tax circumstancesHowever, you should consult your fi nancial adviser on suitable ways to access your investment and on the taxation rules that apply in your country of residence.
free of tax. Thanks to this, your investment within the Managed Pension Account will grow more effi ciently.
We do not make a deduction of tax when you encash your Account, either in part or in total, but the personal tax consequences of investing in the Account will depend on many factors.
15
The table on the next page summarises the charges that may apply to your Managed Pension Account. You can fi nd a fuller description of each of the charges afterwards.
char¯es that may apply to your Mana¯ed Pension Account
The actual charges that apply to your Account will depend on the encashed amounts, frequency of any encashments and remaining Account term, etc.
Royal Skandia reserves the right to vary the annual management charge and maintenance charge, and impose the switching charge with not less than one month prior written notice or such shorter period of notice in compliance with the relevant regulatory requirements.
16
char¯es summary
Name of charge Amount of charge How the charge is deducted
Account charges
Bid/offer spread The bid/offer spread is the variance between the bid price and offer price of an investment-linked fund, which is 7% of the contribution. Annualised rate not applicable.
Refl ected in the number of units of investment-linked fund allocated. Units of investment-linked fund selected are allocated at the offer price. On the other hand, when units are cancelled for purpose of encashment or payment of charges, the bid price is used.
Maintenance charge
HK$69/ £5.75/ US$8.6/ €8.6 per month or equivalent to HK$828/ £69/US$103.2/ €103.2 per year.
Deducted from the account value by cancelling units of investment-linked fund on the 20th of each month (or on the preceding working day if it is a non working day).If the account is linked to two or more investment-linked funds selected, then units will be cancelled from each investment-linked fund in proportion to the value those units bear to the total account value.
Contribution servicing charge (where applicable)
This charge applies if a regular contribution is reduced, or partially or completely missed in any Account year.0.67% per month (or equivalent to 8% per year) of the reduced/missed annualised regular contributions.
Deducted from the account value by cancelling units of investment-linked fund on the contribution due date (or the next following working day if it is a non working day). This charge will apply from the next account year after the regular contributions have been reduced/missed.If the account is linked to two or more investment-linked funds selected, then units will be cancelled from each investment-linked fund in proportion to the value those units bear to the total account value.
Early encashment charge (where applicable)
This charge applies when regular contribution units are encashed before the maturity date or the 25th Account anniversary, whichever is the earlier.The charge is calculated as a percentage of the value of the regular contributions units being encashed/cancelled.The applicable percentage depends on the committed contribution payment term and the number of remaining contribution payment term.
Deducted from the account value by cancelling units of investment-linked fund on the working day following the working day the encashment request is received at our Head Offi ce.If the account is linked to two or more investment-linked funds selected, then units will be cancelled from each investment-linked fund in proportion to the value those units bear to the total account value.
Investment-linked fund charges
Royal Skandia annual management charge
1% each year of the value of investment-linked fund.
Refl ected in the unit price of the investment-linked fund.
External annual management charge
0-2.5% each year (depending on the underlying fund chosen) of the value of underlying fund charged by fund management companies.
Refl ected in the unit price of the investment-linked fund.
Switching charge Currently waived. Not applicable.
Other charge
Credit card charge (where applicable)
A nominal charge in percentage based on the contribution will be added onto the collected contribution amount. This applies to credit card payments in all currencies.
Credit card providers take a charge on all contributions collected and Royal Skandia bears approximately half of the amount.
17
char¯es in detailaccount char¯es
bid/offer spread
This is the difference between the selling (bid) price and the buying (offer) price of each investment-linked fund, which is 7%. When you pay contributions, units of investment-linked funds are allocated at the offer price. When you encash money from your Account or units are cancelled for payment of charges, the bid price is used for calculation.
maintenance char¯e
It is HK$69/ £5.75/ US$8.6/ €8.6 a month. If you choose to use the fi xed account facility, the maintenance charge is HK$138/ £11.5/ US$17.2/ €17.2.
contribution servicin¯ char¯e (where applicable)
This charge applies if a regular contribution is reduced, or partially or completely missed in any Account year.
This charge will apply to the difference between the previous ever highest committed level in any Account year and the amount of regular contributions you actually paid in the relevant account year. The charge rate is 0.67% per month (or equivalent to 8% per year) and is deducted monthly by cancelling units.
If you reduce your regular contributions, this charge will apply from the next Account anniversary, and then in each later Account year, until you reinstate your regular contributions to the previous ever highest committed level and pay for one full Account year.
If you miss your regular contribution, this charge will apply from the Account anniversary after your Account was made paid-up. This charge will continue to apply in later Account years even if you reinstate your regular contributions, unless you repay all the outstanding contributions for an Account year and pay for one full Account year. An Account becomes paid-up if you do not pay the outstanding regular contributions within three months.
In the event you have chosen automatic increase of regular contributions on each Account anniversary, your previous highest committed level will increase each year. So, it is important that you commit to a level you can maintain for the entire Account term.
For example, if you missed contributions of US$300 in total in one year, you would pay a contribution servicing charge of US$2 (ie US$300 x 0.67%) per month over the following Account year – US$24 in total.
We do not apply contribution servicing charges for reduced or missed regular contributions that:
• do not exceed the available charge-free allowance at each Account anniversary
• are reduced or missed for up to a maximum of three months, provided the reduced or missed contributions are reinstated in full within that three-month period.
The contribution servicing charge does not apply to lump sum contributions.
18
early encashment char¯e (where applicable)
The early encashment charge will be applied if you encash regular contribution units before the maturity date or the 25th Account anniversary, whichever is the earlier. Units allocated from lump sum contributions are not subject to this charge when they are encashed.
The amount of the charge will depend on:
• the Account term
• the number of full Account years since the Account started.
At any time after the preliminary period, you may encash via the available charge-free allowance free of early encashment charge, provided the remaining surrender value does not fall below the minimum amount stipulated by Royal Skandia at the time which is currently HK$12,000/ £1,000/ US$1,500/ €1,500. If the value falls below the minimum, the Account may be automatically encashed.
Where the encashed amount is greater than the available charge-free allowance, an early encashment charge will apply to the difference between the encashed amount and the available charge-free allowance. The charge-free allowance will then be reduced.
For example, if the encashment amount requested is HK$36,000 or currency equivalent whereas the available charge-free allowance is HK$12,000, the amount subject to an early encashment charge is HK$24,000.
The table in the next page shows the applicable percentages which apply as early encashment charges.
investment-linked fund char¯es
annual mana¯ement char¯e
We make an annual management charge of 1% a year of the value of the investment-linked funds. This charge is applied daily and refl ected in the unit prices of the investment-linked fund(s).
The fund management company/companies for the underlying asset(s) may also make a charge which is refl ected in the unit prices. These charges range from 0% to 2.5% per year.
For full details of annual management charges, please refer to details of the Royal Skandia investment-linked funds or/and the respective offering documents of the underlying assets.
switchin¯ char¯e
We do not currently charge a fee for switching.
19
56
78
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124
.4%
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46.5
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59.4
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.9%
69.3
%10
0.0%
100.
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212
.1%
16.8
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.5%
27.3
%31
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31.2
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.2%
41.5
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%
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%
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8%10
.8%
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6%
120.
0%0.
6%2.
6%
130.
0%0.
6%
140.
0%
15 16 17 18
19
20
21
22
23
24
25
1516
1718
1920
2122
2324
25
100.
0%10
0.0%
100.
0%10
0.0%
100.
0%10
0.0%
100.
0%10
0.0%
100.
0%10
0.0%
100.
0%
50.5
%52
.5%
53.7
%54
.0%
56.3
%56
.6%
61.5
%63
.0%
64.9
%66
.9%
67.0
%
32.2
%34
.5%
37.2
%37
.8%
40.0
%41
.2%
45.5
%45
.7%
48.8
%48
.8%
51.3
%
21.9
%23
.6%
25.6
%26
.6%
29.9
%31
.1%
33.8
%34
.5%
36.2
%36
.3%
38.7
%
16.8
%17
.1%
18.7
%20
.3%
22.1
%23
.5%
25.6
%26
.1%
28.3
%28
.7%
29.9
%
13.3
%14
.2%
15.1
%16
.0%
18.5
%19
.8%
20.2
%21
.8%
22.6
%23
.9%
25.4
%
10.5
%11
.6%
12.2
%13
.1%
15.1
%15
.6%
16.7
%18
.0%
18.8
%19
.7%
21.6
%
8.8%
9.8%
10.0
%11
.1%
13.4
%13
.8%
14.1
%14
.5%
14.9
%16
.1%
17.0
%
6.9%
7.4%
7.5%
8.7%
9.8%
10.1
%11
.4%
12.3
%12
.8%
13.8
%15
.3%
4.6%
5.5%
6.1%
7.8%
8.4%
9.0%
9.7%
10.9
%11
.5%
12.2
%13
.4%
3.9%
5.0%
5.1%
6.6%
7.2%
7.7%
9.0%
9.6%
10.3
%11
.8%
12.5
%
3.3%
4.2%
4.6%
6.3%
6.6%
7.5%
8.4%
9.2%
10.0
%11
.4%
12.1
%
2.5%
3.8%
4.5%
5.8%
5.9%
7.1%
8.2%
9.0%
9.4%
10.7
%10
.8%
0.6%
2.5%
4.3%
5.4%
5.5%
5.9%
7.1%
8.6%
8.7%
9.9%
10.0
%
0.0%
0.6%
2.6%
4.5%
5.0%
5.8%
6.4%
7.7%
8.5%
8.9%
9.0%
0.0%
0.6%
2.3%
4.3%
5.0%
6.0%
7.6%
8.3%
8.3%
8.4%
0.0%
0.6%
2.3%
4.2%
5.4%
6.9%
7.5%
7.7%
7.9%
0.0%
0.6%
2.2%
4.7%
6.0%
6.9%
7.5%
7.6%
0.0%
0.6%
2.7%
5.2%
6.1%
7.0%
7.2%
0.0%
0.6%
2.9%
5.4%
6.6%
6.8%
0.0%
0.6%
3.0%
5.8%
6.5%
0.0%
0.6%
3.0%
4.5%
0.0%
0.6%
2.3%
0.0%
0.6%
0.0%
Acc
ount
term
(in
year
s)
For e
xam
ple:
if y
our A
ccou
nt v
alue
is H
K$5
0,00
0 af
ter 5
full
year
s of
a 2
5 ye
ar te
rm, t
he e
arly
enc
ashm
ent c
harg
e w
ill b
e H
K$1
4,95
0 (H
K$5
0,00
0 x
29.9
%).
In
this
cas
e, th
e va
lue
you
will
rece
ive
is H
K$3
5,05
0.
Num
ber o
f co
mpl
ete
year
sin
forc
e
Illus
trat
ion:
Ear
ly E
ncas
hmen
t Cha
r¯e
(EEC
)
20
your Mana¯ed Pension Accounthow to apply
policy maintenance
The Royal Skandia Managed Pension Account is available to anyone aged 18 and over subject to our reasonable requirements. You should, however, check that your country’s laws allow you to invest in an offshore life assurance policy.
You may apply for the Account on your own or on a joint basis with another applicant. The Account may be set up on a single, joint or multiple
lives assured basis. Each life assured must normally be aged under 65 at the maturity date. The life assured is the named person upon whose death the benefi t payable in the Account will be to the accountholder.
When you are ready to proceed with your application, you should complete the application form and submit all relevant information.
Once we have accepted your application we will issue an acceptance letter followed by Account Terms and Policy schedules as a formal record of your Account. You can request a summary of the units allocated to your Account at any time. You may also wish to track the daily price of your selected investment-linked funds by visiting our website www.skandiainternationalhk.com.
You will receive regular valuation statements from us. Alternatively, you can view the details anytime online via our Client Centre on
www.skandiainternationalhk.com. Once you send us your request, you will be assigned with a dedicated user account and password.
Your fi nancial adviser can give you more details.
payment at maturityTo obtain full payment at the end of the Account term you need to send a completed maturity payment form to Royal Skandia’s Head Offi ce.
21
When you want to fully encash your Account, you must send a completed surrender authority to Royal Skandia’s Head Offi ce before any payment can be made.
Payment following a surrender request or death claim would normally be remitted within fi ve days of receipt by Royal Skandia at our Head Offi ce of the documentation and evidence as we may reasonably require to make payment.
payment before maturity
Royal Skandia has the right to terminate the Account in the following circumstances:
• Where regular contributions stop or are missed within the preliminary period (three months from the last unpaid contribution due date are
termination
You have the right to cancel your Account and obtain a refund of any contribution(s) paid less any market value adjustment.
If you wish to proceed cancellation, you will not be entitled to the additional 5% allocation given at commencement.
If you wish to cancel, you must return the policy and give written notice, signed by you, to Royal Skandia to request cancellation. This notice
your ri¯ht to chan¯e your mind
We require the death certifi cate (if applicable), to be sent to our Head Offi ce, and may require further evidence in some circumstances, before any death benefi t payments can be made.
Documentation may be sent to our Hong Kong offi ce for onward transmission to our Head Offi ce. The transaction date will normally be the working day after receipt at our Head Offi ce, irrespective of where the documentation is sent.
Death claims may be subject to Isle of Man probate. The maximum interval between receipt of all relevant documentation completed to Royal Skandia’s satisfaction and payment of the proceeds will normally be no longer than one month. If the Courts of Justice require further evidence, there may be delays.
You should be aware that Royal Skandia reserves the right to defer payment or an encashment request in the circumstances when realisation of underlying assets cannot be carried out at normal market conditions.
allowed for paying the outstanding regular contributions) except where a lump sum contribution has been paid; or
• Where payments to the Account have stopped or have been missed after the preliminary period and the
unit value becomes insufficient to maintain the Account in force.
If your Account is terminated, it means the Account will lapse without value.
must be received directly by Royal Skandia’s Hong Kong offi ce at 24th Floor, Henley Building, 5 Queen’s Road Central, Hong Kong within 21 days after:
• either the delivery of the policy to you/your representative, or,
• the issue of the notice informing you/your representative about the availability of the policy and the expiry date of the cooling-off period,
whichever is earlier. If the value of your investment has fallen by the time we receive your cancellation letter/notice, the refund of your contributions will be reduced by an amount equivalent to the drop in the value.
These cancellation rights do not apply to additional contributions once your policy is issued and has passed all the above cancellation conditions.
Please refer to the ‘Cooling-off Initiative’ issued by the Hong Kong Federation of Insurers from time to time for reference.22
This document is based on Royal Skandia’s understanding of the law, regulation and taxation practice of the UK and Isle of Man as at July 2012, which may change in the future. No liability can be accepted for any personal tax consequences as a result of future legislative, regulatory or tax changes.
You should seek professional advice regarding your own tax circumstances.
Benefi ts under the Royal Skandia Managed Pension Account are determined strictly in accordance with the relevant standard Account Terms, copies of which are available on request from your fi nancial adviser in the fi rst instance or at our Hong Kong offi ce.
Any information concerning the offering document (including the literature ‘details of the Royal Skandia investment-linked funds’) and the
further informationAccount Terms are to be interpreted in accordance with and are governed by Isle of Man Law. However, this will not preclude the right to bring legal action in a Hong Kong court or any court elsewhere which has a relevant connection with the Account.
Royal Skandia Life Assurance Limited accepts full responsibility for the accuracy of the information contained in the offering document of the Managed Pension Account and confi rms having made all reasonable enquiries, that to the best of Royal Skandia’s knowledge and belief there are no other facts the omission of which would make any statement misleading.
Royal Skandia Life Assurance Limited always aims to deliver excellent service. But if you do have any cause to complain, please write to the Complaints Team Manager at our Head Offi ce address.
This ILAS (investment-linked assurance scheme) is authorised by the Securities and Futures Commission in Hong Kong. Authorisation is not a recommendation or endorsement of a scheme nor does it guarantee the commercial merits of a scheme or its performance. It does not mean the scheme is suitable for all investors nor is it an endorsement of its suitability for any particular investor or class of investors. The Commission does not take any responsibility for the contents of the offering document. The Commission makes no representation as to its accuracy or completeness, and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of the offering document.
If you require any further information, please contact your fi nancial adviser in the fi rst instance or our Sales and Customer Support team at Royal Skandia’s Hong Kong offi ce.
Date of publication: July 2012
23
24053_MPA_ENG_cover.indd
the future starts now
the Mana¯ed Pension Account
SK2750/INT12-0378/July 2012
www.skandiainternationalhk.com
Skandia International, part of the wealth management business of Old Mutual plc, is the international group of companies which provides offshore and cross-border investment solutions.
Calls may be monitored and recorded for training purposes and to avoid misunderstandings.
Royal Skandia’s Hong Kong offi ce: 24th Floor, Henley Building, 5 Queen’s Road Central, Hong KongPhone: +852 3552 5888 Fax: +852 3552 5889 E-mail: [email protected]
Authorised by the Insurance Authority of Hong Kong to carry on long term business.
Royal Skandia Life Assurance Limited is registered in the Isle of Man under number 24916C.
Registered and Head Offi ce:Skandia House, King Edward Road, Onchan, Isle of Man, IM99 1NU, British Isles.Phone: +44 (0)1624 655 555 Fax: +44 (0)1624 611 715.
Authorised and regulated by the Isle of Man Insurance & Pensions Authority.
Royal Skandia is a member of the Association of International Life Offi ces.
for Hong Kong market only
1
PRODUCT KEY FACTSMana¯ed Pension Account
June 2011
This statement provides you with key information about this product.This statement is a part of the offering document.
You should not invest in this product based on this statement alone.
Name of insurance company:Royal Skandia Life Assurance Limited (‘Royal Skandia’)
Single (Lump sum) or regular contribution:– Regular contributions; or– Regular contributions and lump sum contribution
Regular contribution frequency:Monthly/Quarterly/Half-yearly/Yearly
Minimum contribution payment term:Five years
Period with surrender charge(early encashment charge):Varies depending on the committed contribution payment term
Governing law of policy:Law of Isle of Man
Quick facts
Contribution currency:HK$/US$/£/€
Minimum investment:– Regular contribution:
Monthly: HK$1,800/US$225/£150/€225Quarterly: HK$5,400/US$675/£450/€675Half-yearly: HK$10,800/US$1,350/£900/€1,350Yearly: HK$18,000/US$2,250/£1,500/€2,250
– Lump sum contribution:HK$12,000/US$1,500/£1,000/€1,500
Maximum investment:
N/A
Death benefit:101% of account value
• This product is an investment-linked assurance scheme (‘ILAS policy’). It is a life assurance policy issued byRoyal Skandia. This is not a fund authorised by the SFC pursuant to the Code on Unit Trusts and MutualFunds (‘UT Code’).
• The contributions you pay, after deduction of any applicable fees and charges of your ILAS policy, will be invested by Royal Skandia in the ‘underlying funds’ you selected (see below) and will accordingly go towards accretion of the value of your ILAS policy. Your ILAS policy value will be calculated by Royal Skandia based on the performance of your selected underlying funds from time to time and the ongoingfees and charges which will continue to be deducted from your ILAS policy value.
• Note, however, that all contributions you pay towards your ILAS policy, and any investments made by RoyalSkandia in the underlying funds you selected, will become and remain the assets of Royal Skandia. You donot have any rights or ownership over any of those assets. Your recourse is against Royal Skandia only.
• Due to the various fees and charges levied by Royal Skandia on your ILAS policy, the return on your ILASpolicy as a whole may be lower than the return of the underlying funds you selected. Please see pages 2 and3 for details of the fees and charges payable by you.
• ‘Underlying funds’ available for selection are the funds listed in the ‘Details of the Royal Skandia investment-linked funds’. These may include funds authorised by the SFC pursuant to the UT Code, but may also include other portfolios internally managed by Royal Skandia on a discretionary basis not authorised by theSFC under the UT Code.
• Although your ILAS policy is a life assurance policy, the amount of your death benefit is linked to the performance of the underlying funds you selected which are subject to investment risks and market fluctuations. The death benefit payable may be significantly less than your contributions paid and may notbe sufficient for your individual needs.
What is this product and how does it work?
2
What are the key risks?Investment involves risks. Please refer to the principal brochure for details including the risk factors.
• Encash with either nil or reduced early encashment charge by using the charge-free allowance available.(Please refer to page 13 of the product brochure for details.)
• At outset of policy, regular contributions are allocated at 105% of each regular contribution due and paid before the first account anniversary, and 100% thereafter. (Please refer to page 4 of the product brochure fordetails.)
• At maturity of policy, there is a loyalty bonus of up to maximum of 5% of the bid value of the regular contributions (depending on the number of years of account term). (Please refer to page 4 of the productbrochure for details).
Other features
• Credit and insolvency risks – This product is a life assurance policy issued by Royal Skandia. Your investmentsare subject to the credit risks of Royal Skandia.
• The investment-linked funds available under this product can have very different features and risk profiles.Some may be of high risk. Please read the principal brochure and the offering document of the underlyingfunds involved for details.
• Early surrender/withdrawal penalty (Early encashment charge) – This ILAS policy is designed to be heldfor a medium/long term period. Early surrender or withdrawal of the policy/suspension of or reduction incontribution may result in a significant or even a total loss of principal (contributions) and bonus awarded.Poor performance of underlying funds/assets may further magnify your investment losses, while all chargesare still deductible.
• Market risks – Investment return of this ILAS policy is contingent upon the performance of the underlyingfunds/assets and therefore there is a risk of capital loss.
• Foreign exchange risks – The investment returns of the ILAS policy may be subject to foreign exchangerisks as some of the underlying funds may be denominated in a currency which is different from that of yourILAS policy.
Is there any guarantee?• This product does not have any guarantee of repayment of principal (contributions). You may not get back
the full amount of contributions you pay and may suffer investment losses.
Mana¯ed Pension Account
What are the fees and charges?
Scheme level
Royal Skandia reserves the right to vary the annual management charge and maintenance charge, and imposethe switching charge with not less than one month prior written notice or such shorter period of notice in compliance with the relevant regulatory requirements.
Bid/offer spread
Annual management charge
– Annualised rate not applicable. – The bid/offer spread is the
variance between the bid priceand offer price of an investment-linked fund, which is 7% of thecontribution.
1% per year of the value of investment-linked fund
– Reflected in the number of units of investment-linked fund allocated.
– Units of investment-linked fund selectedare allocated at the offer price. On theother hand, when units are cancelled forpurpose of encashment or payment ofcharges, the bid price is used.
Reflected in the unit price of the investment-linked fund.
Applicable rate How it is deducted/charged
(continued)
3
What are the fees and charges? (Cont.)
Scheme level
Switching charge
Maintenance charge
Contribution servicingcharge
Surrender charge(Early encashmentcharge)
Currently waived.
HK$69/ US$8.6/ £5.75/ €8.6 permonth, or equivalent to HK$828/US$103.2/ £69/ €103.2 per year.
0.67% per month (or equivalent to8% per year) of the reduced/missedannualised regular contributions.
The charge is calculated as a percentage of the value of units allocated as regards the regular contributions being encashed/cancelled.The applicable percentage dependson the committed contribution payment term and the number of remaining contribution paymentterm. Please refer to the illustrativeexample and table of applicable percentages on page 20 of the product brochure.The charge is 100% of the value ofunits allocated as regards the regularcontributions during the preliminaryperiod (the maximum preliminaryperiod is 24 months. Please refer to ‘Additional information’ overleaf fordetails).
Not applicable
– Deducted from the account value by cancelling units of investment-linked fundon the 20th of each month (or on the preceding working day if it is a non working day).
– If the account is linked to two or more investment-linked funds selected, thenunits will be cancelled from each investment-linked fund in proportion tothe value those units bear to the total account value.
– Deducted from the account value by cancelling units of investment-linked fundon the contribution due date (or the nextfollowing working day if it is a non workingday). This charge will apply from the nextaccount year after the regular contributions have been reduced/missed.
– If the account is linked to two or more investment-linked funds selected, thenunits will be cancelled from each investment-linked fund in proportion tothe value those units bear to the total account value.
– Deducted from the account value by cancelling units of investment-linked fundon the working day following the workingday the encashment request is received at our Head Office.
– If the account is linked to two or more investment-linked funds selected, thenunits will be cancelled from each investment-linked fund in proportion tothe value those units bear to the total account value.
Applicable rate How it is deducted/charged
Please refer to ‘Charges that may apply to your Managed Pension Account’ page 16 of the product brochure for details of the charges.
Mana¯ed Pension Account
4
What if you change your mind?
Cooling-off period
Royal Skandia Life Assurance Limited Phone: 3552 5888Address: 24th Floor, Henley Building, Fax: 3552 5889
5 Queen’s Road Central, Hong Kong. Email: [email protected]: www.skandiainternationalhk.com
Insurance company’s information
Mana¯ed Pension Account
• Cooling-off period is a period during which life insurance policyholders may cancel their policies and getback their original investments (subject to market value adjustment) within the earlier of 21 days after thedelivery of the policy or issue of a notice to you or your representative. Such notice should inform you of theavailability of the policy and expiry date of the cooling-off period. Please refer to the cooling off initiative issued by Hong Kong Federation of Insurers from time to time for reference.
• You have to tell your insurer by giving a written notice. Such notice must be signed by you and received directly by Royal Skandia at 24th Floor, Henley Building, 5 Queen’s Road Central, Hong Kong.
• You may get back the amount you paid, or less if the value of the investment-linked funds chosen has gonedown.
Additional information
ImportantRoyal Skandia is subject to the prudential regulation of the Insurance Authority. However, the Insurance Authoritydoes not give approval to individual insurance products, including the Managed Pension Account referred to inthis statement.
If you are in doubt, you should seek professional advice.
The SFC takes no responsibility for the contents of this statement and makes no representation as to its accuracyor completeness.
Calls may be monitored and recorded for training purposes and to avoid misunderstandings.
Royal Skandia’s Hong Kong office: 24th Floor, Henley Building, 5 Queen’s Road Central, Hong Kong.Phone: +852 3552 5888 Fax: +852 3552 5889 E-mail: [email protected]
Royal Skandia Life Assurance Limited is registered in the Isle of Man under number 24916C. Registered and Head Office: Skandia House, King Edward Road,Onchan, Isle of Man, IM99 1NU, British Isles. Phone: +44 (0)1624 655 555 Fax: +44 (0)1624 611 715.Authorised by the Isle of Man Insurance & Pensions Authority.
Royal Skandia is a member of the Association of International Life Offices.
SK7545/INT12-0761/July 2012
What are the fees and charges? (Cont.)
Underlying funds levelYou should note that the underlying funds of the investment-linked funds may have separate charges on management fee, performance fee, bid-offer spread and/or switching fee. You do not pay these fees directly –either (1) the fees will be deducted and such reduction will be reflected in the unit price of the underlyingfunds or (2) units will be redeemed from your investment-linked funds to pay these fees. For details, pleaserefer to the offering document of the underlying funds and/or the principal brochure of Managed Pension Account, which are available from Royal Skandia upon request.
• The Managed Pension Account has no surrender value (except for lump sum contributions paid) within thepreliminary period, which depends on the number of years of account term selected. If you encash yourILAS policy within the preliminary period, your ILAS policy will terminate without value and you will not getanything back. The preliminary period is ‘n’ months where ‘n’ equals the number of full years in the accountterm. For example, a ten-year account term will have a preliminary period of ten months.
• The maximum preliminary period is 24 months.
Please refer to the product brochure for details.