fundsatwork€¦ · • momentum research shows that members of retirement funds expect to live the...

FundsAtWorkOctober 2011

agenda01:What is the story about 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

What is the story about retirement and insurance planning in South Africa?

01:

aSouth Africans do not plan sufficiently for retirement

bSouth Africans are under insured

c Retirement reform is coming

• 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

• A culture exists of not preserving retirement benefits when changing employers

• Longevity poses a risk...South Africans do not plan sufficiently for retirement

01:a

• 100 year olds, centenarians, are currently the fastest growing population globally

• USA 72 000, 1 mil by 2050

• Japan 30 000, 1 mil by 2050

• UK 9 000, 40 000 by 2030

• China 7 000 the most globally by 2050

• Spain 10 000, Canada 5 000, Italy 5 000 and France 3 000

• 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

• Retirement needs focused investment choice

adapted to members’ needs simplified improved

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

01:b

• Chances of becoming disabled are

13 to 22% for white collar workers 29 to 36% for blue collar workers

• Predominantly bread winners

• 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 and39% females 47 years old on average at date of disability 45% of claimants earn R20 000 to R70 000 pa 20% of claimants earn R100 000 to R250 000 pa

• 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

It is estimated that stress and depression related diseases kill more than 600 South Africans daily.

Specified medical conditions 13%

Respiratory 12%

Trauma 11%

HIV/AIDS 10%

Cancer 9%

Stroke 12%

Psychiatry 10%

Cardiovascular 6%

Spine 5%

Neurological 5%

Sensory 5%Muscoskeletal 2% Other 3%

What causes disability?

“”

• Permanent health insurance (PHI) significantly improved

• New disability benefit added

• Family Protector improved simplified

Retirement reform is coming

• First paper due out in 2013

• First implementations expected in 2015 - roll out next 10 years but not defined

01:b

Retirement reform is coming

• First paper due out in 2013

• First implementations expected in 2015 - roll out next 10 years but not defined

01:b• 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

By simplifying and improving FundsAtWork• Retirement benefits• Insurance benefits• Lifestyle benefits• Business benefits

How will FundsAtWork support you in helping your clients to write stories that are clear, simple and safe?

02:

trans

parency f exibility

value for money ease of use

By simplifying and improving FundsAtWork product options

retirement benefits

insurance benefits

lifestyle benefits

business benefits

The philosophy of transparency, fexibility, ease of use and valuefor money is still core to the design of FundsAtWork.“

”

FundsAtWork retirement benefits

– placing people

among the top 6%

ConservativeMomentum Money MarketMomentum MultiManager Money Market

CautiousMomentum StableGroMomentum InfationGroMomentum Secure Bonus

BalancedMomentum BalancedMomentum MultiManager BalancedMomentum Shari’ah FundMomentum Super Nation Fund

Aggressive

Momentum AggressiveMomentum MultiManager Aggressive

LifestagesMomentum Active Lifestage portfolios Momentum Passive Lifestage portfolios

Trader

Trader portfoliosMomentum BondMomentum Infation Guaranteed FundMomentum Infation Plus FundMomentum Capital Plus FundMomentum Gold Bullion FundOver 300 unit trusts

Entrepreneur

Momentum StableGroMomentum InfationGroMomentum Secure BonusMomentum Active Lifestage portfolios

Momentum Passive Lifestage portfolios

Momentum Active Lifestage portfolios

Momentum Secure Bonus

Founder Narrator Provider

less fexibility

more fexibility

ConservativeMomentum Money MarketMomentum MultiManager Money Market

CautiousMomentum StableGroMomentum InfationGroMomentum Secure Bonus

BalancedMomentum BalancedMomentum MultiManager BalancedMomentum Shari’ah FundMomentum Super Nation Fund

Aggressive

Momentum AggressiveMomentum MultiManager Aggressive

LifestagesMomentum Active Lifestage portfolios Momentum Passive Lifestage portfolios

Trader

Trader portfoliosMomentum BondMomentum Infation Guaranteed FundMomentum Infation Plus FundMomentum Capital Plus FundMomentum Gold Bullion FundOver 300 unit trusts

Entrepreneur

Momentum StableGroMomentum InfationGroMomentum Secure BonusMomentum Active Lifestage portfolios

Momentum Passive Lifestage portfolios

Momentum Active Lifestage portfolios

Momentum Secure Bonus

Founder Narrator Provider

less fexibility

more fexibility

Dynamic lifestages based on Momentum’s house view – retirement and insurance package

Boutique / Specialist for the most financially sophisticated

Guaranteed portfolio, cost effective and NSSF mirror

Founder

Momentum easy to use fexibility, infation targeted range, dynamic lifestage and guaranteed options

less fexibility

more fexibility

...simplified and improvedNarrator Provider Entrepreneur

FounderGuaranteed portfolio – trustee defaultMetropolitan MultiManager Smooth Growth (Global)

• New opportunity presented by the merger

• Higher investment performance benchmark

• R5.3 billion already invested

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

Metropolitan MultiManager Smooth Growth (Global)

Momentum Secure Bonus

• High investment performance benchmark with MVA *

• Globalexposure

• Full capital and liquidity guarantee

* Market value adjuster

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

Global Equity 14,5%

RSA Equity 37.5%

RSA Cash 5%

Property 7.5%

RSA Bonds 7%

Absolute Return

20%

Fund of Hedge Funds 3%

SRI 2.5%Global Bonds 3%

vola

tility

of p

ortfo

lio re

turn

syears to

retirement

accumulator consolidator defenderbuilder

> 7years

toretirement

5 - 7years

3 - 5years 0 - 3

years

Narrator

Momentum Lifestages

CPI+7% CPI+6% CPI+5% CPI+3%

Provider

Infation targeted rangeMomentum Enhanced Factors 7, 6, 5, 4 and 3

Guaranteed rangeMetropolitan MultiManager Smooth Growth (Global) Momentum InfationGro Momentum Secure Bonus Dynamic lifestagesMomentum LifestagesSplit funding, except in Lifestages

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%60% 46% 28.5% 18% 12.5%

0%EF 7 EF 6 EF 5 EF 4 EF 3

25% 25% 20% 15% 10%

12.5%14%

24%29.5% 30%

2.5%12.5%

25%32.5% 40%

2.5%2.5% 5%

7.5%

Local equities and property

Local absolute return

Local fixed interest

Global

Local commodities

EntrepreneurBoutique / SpecialistSelected Momentum portfolios

Momentum Passive Lifestages

Over 300 external portfolios and unit trusts

Notes

* Momentum Aggressive, StableGro and Infation Plus no longer available

* Passive Lifestages only available in Entrepreneur

Simplified portfolio pricing

Founder, Narrator and Provider1.5% all-in portfolio fee

Entrepreneur

Asset management fees applyAsset based fees charged only

on external portfolios

FundsAtWork Asset Consulting

Key benefits

• 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

Easy first steps – target 75%+

replacement ratio

expected annual

income after retirement

expected annual salary

prior to retirement

=

Founder, Narrator and Provider

• No additional cost

• Help with replacement ratios and investment feedbacks

• Phase 1: face to face with large clients

• Phase 2: providing tools for financial advisers (forthcoming attraction)

• Additional help in choosing split funding and alternative glide paths in Provider

Entrepreneur

• Available at an additional cost applied on either an advisory body or member level

• Boutique solution

Momentum Lifestages and PassiveLifestages

Momentum portfolios range

Over 300 unit trusts

Metropolitan MultiManager Smooth Growth (Global) (MMSG(G))

Momentum Lifestages

Momentum Enhanced Factors 7, 6, 5, 4 and 3

Mom Lifestages

MMSG(G), MSB and Mom InfationGro

EntrepreneurFounder Narrator Provider

less fexibility

more fexibility

FundsAtWork insurance benefits

– facing the challenges

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

“Imagine having to survive on 25% less of your salary

if you become disabled.

”

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

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 period for a limited time

• Minimum waiting period 1 month

• 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

• Funeral benefit R10 000 per main member and spouse R5 000 per child 8 family members covered (the member, up to 2 spouses and 5 children)

Family Protector base benefits updates

• Education benefit Amount available for children’s education following the death of a member to supplement group life cover Lump sum of R50 000 (max of R10 000 per child) Up to 5 children covered

“ ”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

FounderDisability benefits

Death benefitsGLAPHI, PTD, CIP

and dread disease – 3 options

Family Protector BASE

PHI permanent health insurance

PTD lump sum disability

CIP capital income provider

GLA group life cover

Narratorcompulsory insurance benefits

Disability benefits

PHI at 75% of salary

Death benefits

Life Eventing GLA

Family Protector BASE

1

2

3

4

5

6

7

8

Narrator the all-in-one option

FundsAtWork Life Eventing

high

17.5%

medium

15%

low

10%

Group life cover GLA – automated cover changes

+ Permanent health insurance PHI at 75% of salary, 12 months

age 3525 45 61

• 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

Provider / EntrepreneurDisability benefits Death benefits

PHI, PTD, CIP, TTD and

dread disease – 3 options

GLA, SAC, spouse’s life cover and accidental death

Family Protector BASEFamily Protector PLUS

Family Protector PLUS

• Funeral benefit add children add cover add parents / parents-in-law

• Education benefit add children add cover

• Health premium waiver add years add another medical scheme

FundsAtWork lifestyle benefits

– living life in style Momentum MultiplyFundsAtWork members of the umbrella or preservation funds have access to the Multiply wellness programme

Read more herewww.momentum.co.za/fundsatwork

Home loansWith the employer’s agreement, individual members under the FundsAtWork umbrella funds have access to pension backed guaranteed home loan facilities at preferential rates

Note* Momentum Secure Bonus

remains the default portfolio for home loans

Smart accountsFNB Smart Accounts are available to all members who withdraw from the FundsAtWork umbrella funds and do not have active bank accounts

SMSes and emails to membersBe up to date on member transacting and benefit balances

FundsAtWork business benefits– making life easier

R10 000 000

R8 000 000

R6 000 000

R4 000 000

R2 000 000

1 00050020010050

Pot

entia

l add

ition

al re

tirem

ent

savi

ng fo

r the

sch

eme

Employees per scheme

} }

• Employee contributions can be invested sooner into the market, leading to better long term retirement savings

1 to 7 8 9 10 11 12 13 14 15

48 – 72 hours

confi

rm

cont

ribut

ions

bank

tra

nsfe

r

3 + 7 working days

? ? ?

inve

st

man

ual E

FT

manual administration

* Period of 40 years

Real time control

• Employer controls all aspects of the monthly contribution process

• Claims process: withdrawal benefit paid out day after member leaves fund using employer portal notification

• Financial adviser can perform all functions on behalf of employer

manual vs

electronic

More benefits

• External educators

• Online transacting

• Cellphone and email notification

EF 7 to 3

Mom Lifestages

MMSG(G), MSB MomentumInfationGroAll FlexiCovers and Life Eventing options

Passive Lifestages Momentum portfolios rangeOver 300 unit trustsAll FlexiCovers and Life Eventing options

Entrepreneur

MMSG(G) trustee default

Standard GLA, PHI, PTD and CIP

Founder

Momentum Lifestages

Life Eventing GLA and PHI

Narrator Provider

less fexibility

more fexibility

Family Protector BASE

Snapshots• Trader option removed

• MMSG(G) in Founder

• 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

• All-in 1.50% fee in Founder, Narrator and Provider

• Entrepreneur asset based fees on external portfolios only

• 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

coming soonQuoting 1 FebruaryInstallations 1 March

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