Sagicor Lifestyle is an Approved Retirement Scheme, wherein each participant’s contributions accumulate (subject to the prevailing income tax limits) until retirement. The accumulated funds will be used to provide lifetime income e.g. purchase an annuity which pays a monthly income at the specified retirement age or at the point of permanent disability, if earlier.
Who is Eligible?
In order to qualify for this scheme, you should be:
- a Jamaican resident
- at least 18 years of age
- self-employed or a contract worker
In addition, you should not be and contributing to any other Approved Superannuation Fund or Retirement Scheme. If you are no longer an active member of an Approved Superannuation Fund or Retirement Scheme, you may transfer your accumulated balance to Sagicor Lifestyle.
There are three (3) main benefits:
Upon attaining the retirement age (i.e. between 50 years and 65 years), as determined by the member, a portion of the accumulated balance can be paid as a cash lump sum (tax free) subject to the maximum limit permitted under the Income Tax Act or any other relevant Act. The remainder of the fund is converted to a stream of income through the purchase of an annuity or similar product.
In the event that you are deemed permanently disabled prior to retirement, your pension benefit will be paid under the terms set out in the contract/trust deed and rules.
In the event that you die before retirement, a refund of the total amount of contributions to the scheme, together with interest, is payable to the named beneficiary.
How do you participate in the Scheme
Once you have met the eligibility requirements, you can participate in the scheme through:
- contributions of a maximum of 20% of your annual gross taxable income or emoluments, subject to the prevailing income tax limit.
- transfers of balances from an existing Approved Retirement Schemes for Superannuation Funds. You are required to contribute to the scheme at least once per year.
In the event that the member ceases to be eligible to make contributions to the scheme, the following options are available:
- Accumulated balance is used by the trustees to purchase a deferred annuity payable at retirement
- Accumulated balance is transferred to another Superannuation Fund/Approved Retirement Scheme
- Accumulated balance remains in the scheme, accumulating interest until retirement
What are the investment options?
Our three comprehensive investment retirement options will meet the needs of members allowing them the ability to match their risk profile and stage of life with suitable assets.
Option 1 - The Retirement Band Approach
Option 2 - The Blend and Monitor Approach
Option 3 - The Guaranteed Approach
The Retirement Band Approach
This option is designed based on the philosophy that not all members are sufficiently knowledgeable in the area of investments and as such are not fully equipped to make informed decisions about their investments. This simple all-in-one professionally managed solution, secures individuals with a worthwhile retirement alternative and keeps them appropriately invested throughout the retirement journey, utilizing target retirement year band funds. The funds are tailored to different retirement dates and are managed by Sagicor.
The Blend and Monitor Approach
This option is predicated on the notion that some categories of members have a greater appreciation of the investment environment. To this end, they want to play a greater role in how their funds are invested by determining their own investment mix in line with their retirement goals. These individuals wish to create their asset allocations in line with their balance of risk and reward. This approach allows the members the ability to customize their own retirement solutions.
The Guaranteed Approach
This option is based on the idea of preserving capital for the risk-averse investor, where the perceived complexity of being bogged down with selecting and monitoring of investments is not desired. Instead Sagicor will invest the funds in a risk-free offering. In exchange for this level of comfort and assurance, members are prepared to trade the potential of higher returns over the period for solid, consistent returns.
These simple but effective approaches will allow members to save for retirement in a tax efficient manner and create the desired wealth on the journey to successfully achieving their retirement goals.
HOW ARE PENSION FUNDS INVESTED?
Sagicor Pooled Investment Funds
The Sagicor Pooled Investment Funds are Type 1 Pooled funds. This means that they are investment funds with the sole purpose of investing the assets of Approved Superannuation Funds or Retirement Schemes, established and operated by a licensed investment manager which:
- do not hold any investment or security deemed ineligible or prohibited for an Approved Superannuation or Retirement Scheme under the Pensions Act.
- are not party to or engaged in a transaction prohibited for an Approved Superannuation Fund or Retirement Scheme under the Pensions Act.
The specialized pooled funds are a collection of nine (9) funds (or such other funds that may be determined by the company from time to time) as follows:
- Pooled Equity Fund (PIF EF) - Risk Level: High - invests in listed securities on the local and recognized regional exchanges.
- Pooled Fixed Income Fund (PIF FIF) - Risk Level: Low - invests mainly in Government of Jamaica fixed income securities with longer maturities.
- Pooled Foreign Currency Fund (PIF FCF) - Risk Level: Low to Medium - invests mainly in US$ and Euro denominated fixed income instruments issued by the Government of Jamaica.
- Pooled Money Market Fund (PIF MMF) - Risk Level: Low - invests mainly in short term instruments such as repurchase agreements, variable rate securities, and fixed income securities with an average time to maturity not exceeding two (2) years.
- Pooled Mortgage and Real Estate Fund (PIF MREF) - Risk Level: High - invests in hotels, commercial and warehousing properties, retail complexes and mortgage loans.
- Pooled Global Markets Fund (PIFGMF)- Risk Level: Low to Medium - invests in short term US$ denominated assets, with an average time to maturity not exceeding two (2) years.
- Pooled CPI Fund (PIF CPI) - Risk Level: Medium - invests in Government of Jamaica CPI bonds, where yields are linked to inflation.
- Pooled International Equity Fund (PIF IEF)- Risk Level: High - offers exposure to international markets by investing in listed securities traded on recognised exchanges in US, UK and Canada including exchange traded funds (ETF's), which are securities that track an index and represent a basket of stock or commodities.
- Pooled Diversified Investment Fund (PIF DIF) - Risk Level: Medium - employs a 'fund of funds' strategy, whereby it is invested in other pooled funds, in a mix determined by Sagicor.
Pooled Pension Funds as at July 2014
|Pension Funds||Month to Month||Year to Date||12 Month to Date||5 Year Average Annual Return|
|Mortgage & Real Estate||2.40%||12.60%||17.80%||10.30%|
|Consumer Price Index||0.80%||4.40%||9.70%||N/A|
|Foreign Currency Money Market||0.20%||6.70%||12.40%||N/A|
VALUATION OF THE POOLED FUNDS
The invested assets of the funds are valued by the company at least once per month except for the real estate assets which are valued bi-annually. These investments are based on quoted prices initially recorded at cost and are subsequently re-measured at fair values or other valuation techniques, in compliance with International Financial Reporting Standards.
INCOME AND EXPENSES
The income from the investments of the fund will accrue to and form part of the fund and all taxes, expenses and outgoings in respect of those investments, including costs of acquiring, managing, valuing and disposing of real estate properties will be deducted from the fund. Similarly, deductions will be made from the fund of such amounts as Sagicor considers appropriate in respect of any levy imposed under statute or in respect of any unexpected liability relevant to the fund.
The company reserves the right to charge a fee for the transfer of accumulated balances to another approved Superannuation Fund or Retirement Scheme. This fee is subject to change on ninety (90) days’ notice from Sagicor Life Jamaica Limited.
Within 120 days of the end of each year you will receive a statement that will show your accrued benefit as at the end of the statement period and a projected benefit at your normal retirement age. This estimate does not represent a benefit guarantee but gives a projection of how much income you can purchase at retirement.
There is a management fee of 2% per annum of the average net asset value, payable monthly. Fees are subject to change on ninety (90) days notice from Sagicor Life Jamaica Limited.