OVERVIEW

27four Life Limited is an investment-linked life company within the 27four group, registered as a Long-Term Insurer and governed by the Long-Term Insurance Act. Our purpose, is to offer a range of products to institutional and retail investors, with a strong focus on the principles of Treating Customers Fairly.

 

This is achieved through the provision of investment platform services to regulated financial services businesses such as asset managers, fiduciary managers and asset consultants who want to introduce investment portfolios to the market without incurring the costs and difficulties of establishing and managing a regulated vehicle.

Such entities can gain easy access to markets by establishing and distributing their own range of investment life products. By making use of the 27four Life Platform, they can have peace of mind and focus on what is most important to them, looking after and managing client assets.

  • Quick, easy and efficient set-up of portfolio/s
  • Hassle free subscription process for clients
  • Branded product documentation
  • Ongoing support
  • No set requirement to tie up capital for capital adequacy purposes
  • Regulation 28 compliance and reporting
  • Flexible administration options
  • Online access to portfolio, valuation and statements

Financial services providers have peace of mind and focus on what is most important to them, looking after and managing client assets.

WHITE LABELING

White labeling has become increasingly popular as the barriers to entry within financial services have increased. Regulatory and cost pressures have made setting up a portfolio an expensive, long and difficult exercise.

 

27four Life allows you to establish and distribute your own branded life products to the market. In other words, you can sell fund policies, endowments and living annuities which are issued via the 27four Life license in the name of your business e.g. “XYZ Balanced Fund” or “XYZ Living Annuity”. The underlying investment portfolio is referred to as a life-pooled portfolio which is a unitised portfolio of assets, into which multiple policyholders can choose to invest.

 

Policyholders own a policy linked to the assets in the portfolio. The life-pooled portfolio(s) can either be structured to hold direct investments in underlying instruments, or to hold units in underlying portfolios, or to hold a combination of both.

FUND POLICIES

A policy issued to retirement funds and medical schemes (or any tax-exempt investor) which allows them to invest into life-pooled portfolios.

Key features

  • You will make an initial contribution at the start of the policy. After this, you can make unlimited adhoc contributions.
  • There is no minimum contribution amount.
  • Withdrawals can be made at any time without cost and there is no minimum withdrawal amount.
  • Fund policies do not distribute income.
  • Should an investor wish to transfer an existing fund policy from another life company to 27four Life, a scrip transfer can be facilitated. In this case 27four Life will issue the investor with a new fund policy on receipt of the scrip transfer.

 

Reporting

  • You will receive a policy document at the start of the policy.
  • You will receive daily valuation reports reflecting the unit prices of your investments and monthly statements.
  • Each time an investment or redemption is processed you will receive a detailed transaction report.
  • We will provide you with Regulation 28 compliance certificates and quarterly SARB reports which will confirm that your investment holdings are compliant.

 

Investment options

You will be able to invest in a range of life-pooled portfolios available on the 27four Life Platform.

 

Tax

Fund policies are tax-exempt as they are only issued to tax-exempt institutions.

 

Fees

The fee you pay will depend on the portfolio/s you select to invest in.

LIVING ANNUITY POLICIES

An investment-linked annuity policy designed to provide retirees with a flexible income during retirement. Best suited to retirees who do not want to purchase a guaranteed or a with-profits annuity.

 

Key features

  • You can purchase this policy with proceeds from a retirement benefit or with proceeds from another living annuity.
  • You can choose a level of income that suits you at the start of the policy, provided that it falls between 2.5% and 17.5% of your investment, as stipulated by South African law.
  • You can also choose whether you want your income to be paid monthly, quarterly, bi-annually or annually.
  • Your income can be paid either as a Rand amount or as a percentage of your investment at the start of each year.
  • You can revise your income annually on the anniversary date of your policy.
  • Your income is not guaranteed for life and is dependent on the value of your investment. This will fluctuate based on the performance of the underlying investments.

 

Investment options

You will be able to invest in a range of life-pooled portfolios and approved collective investment schemes available on the 27four Life Platform.

Tax

Tax will be deducted by 27four Life and paid directly to SARS. The tax paid will be based on either a tax directive provided by you or on the current PAYE tax tables.

 

Fees

  • You will pay an on-going policy fee which depends on the size of your investment.
  • Investments can be switched at any time without incurring any fees.
  • Should you wish to transfer your living annuity to another provider, we will not impose any fees or penalties.

SEAMLESS TRANSITION

The Default Retirement Fund Regulations requires retirement funds to establish an annuity strategy that is appropriate for Fund members when they retire. Historically pre- and post-retirement was generally viewed separately, which often created uncertainty for retirees, leaving them in a sub-optimal financial position and exposing them to higher fees in the retail market.

27four Life aims to alleviate this problem by working directly with retirement funds to develop customized solutions which will allow members to remain invested in the same life-pooled portfolio pre- and postretirement, thus facilitating a seamless transition into retirement.

 

How does it work?

  • In the run-up to retirement, Seamless Transition will steer members into a living annuity by placing their investments into a life-pooled portfolio at a suitable level of market aggression.
  • This will become the default option for all members, providing them with a smooth retirement without exposure to the higher fees of the retail postretirement market.
  • Members are not locked into the service and are free to take cash on retirement if they wish.
  • 27four Life will issue the Fund with a Fund Policy, through which members will be able to access a new life-pooled portfolio.
  • Their investment will be gradually transferred into this life-pooled portfolio in the years leading up to retirement.
  • When they retire, 27four Life will issue Fund members with a living annuity policy, and their investments will remain in the same life-pooled portfolio at the same cost.

 

Fees

Fees will be negotiated based on the complexity of the solution, the investment portfolios and the number of members electing the option.

 

How it works

 

ENDOWMENT POLICIES

An investment-linked, long-term savings policy designed to provide you with a tax-efficient way to save. It is best suited to high net worth individuals (with marginal tax rates higher than 30%) who are comfortable with a 5 year investment term and are looking to save or create liquidity in their estate.

 

Key features

  • You can purchase this policy with a lump sum contribution and / or regular contributions by debit order. Additional lump sum contributions can be made after the policy has been purchased.
  • A 5 year restriction period applies at the start of the policy, during which you will be unable to access your money aside from one withdrawal limited to the lesser of:

– Your contributions during the restriction period plus 5%  compound interest per annum.

– The market value of your investment account less fees and charges.

  • After a restriction period withdrawal, any remaining balance over R2 500 must stay invested until the restriction period ends.
  • After the restriction period you are able to withdraw freely either in lump sums or recurring payments.
  • If your contributions in any policy year are greater than 120% of the higher of either of the two previous policy years, the restriction period will be reset.
  • You must appoint at least one natural person as the life assured and the policy will end upon the death of the last life assured.
  • You can nominate beneficiaries for both ownership and proceeds. Beneficiaries will be paid immediately on the death of the last life assured, thus saving on executor’s fees.

 

Investment options

You will be able to invest in a range of life-pooled portfolios and approved collective investment schemes available on the 27four Life Platform.

 

Tax

  • Income tax will be levied at a rate of 30% and capital gains tax will be levied at a rate of 12% (30% income tax rate x 40% inclusion rate).
  • All tax will be recovered from the policy by 27four Life and paid directly to SARS every 6 months.

Fees

  • You will pay an on-going policy fee which depends on the size of your investment.
  • Investments can be switched at any time without incurring any fees.