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