FRIENDS PROVIDENT PREMIER FLEXIBLE SAVINGS PLAN
Objective: This plan
is intended for regular savings. It should not be taken out unless
you intend to contribute for the majority of the term. Once started
it must be continued for 18 months but thereafter payments can be
reduced or stopped and restarted without penalty to meet changing
circumstances. Lump sums may be added at any time and withdrawn without
penalty at any time. At maturity the plan pays out in full - it does
not provide a pension.
first 18 months of your regular contributions plus the first 18 months
of any increase are used to purchase initial units. These have a
penalty if you withdraw them before the end of your plan. They also
carry a penalty if you do not complete the first 18 months contributions
(which can be up to 100%) or the first 18 months of any increase.
All regular payments after the first 18 months are used to purchase accumulation
units. Lump sums can be added at any time and also purchase accumulation units.
All accumulation units can be withdrawn without notice at any time.
first 18 months contributions are enhanced by 5% for $500 or more
per month. This is increased to 10% for contributions of $1000 or
more. For contributions over $2000 an additional 1% is added for
each year of the plan up to a maximum of 15% bringing the max bonus
for $2000 or more to 25%.
Duration: At the choice
of the client. This has to be decided at the outset and it is usual
to take it to retirement age. This is because growth rates can be
high and it would be annoying to receive high growth for the duration
of the plan and then have it pay out only to put the money on a lower
fixed interest deposit or start another plan and have charges again.
At the end of the term the money can be withdrawn or left in to continue
growing, however no more contributions are allowed.
Charges: The initial
units have a charge of 1.5% per quarter and there is a plan fee of
$6 per month.
There is no entry cost (bid-offer spread) for regular payments, they buy units
at the bid (exit) price. However lump sums will be subject to a bid-offer spread
of 7%, that is they are deposited at the offer price and immediately drop down
to the bid price. All withdrawals and switches between funds are done at the
There are other hidden charges, taken out before the funds are priced
and so are not seen:
- FPIL take 1.2% pa out by reduction of the fund prices each day. The performance
of the mirror funds are therefore 1.2% pa less than the underlying funds being
- The funds themselves have internal charges (but have been selected based
on their net performance).
The figures below show the annual fund growth required to cover
the product charges:
Monthly Premium (USD)
The table shows that for longer terms and higher contributions,
the costs associated with this plan reduce. For monthly contributions
of US$2,000, the contributions receive an even greater level of allocation
(up to 125%) and so the charges are marginally lower than for the
$1,000 level illustrated. The level of returns required to produce
a positive real return on your savings plan is, therefore, lower
for longer maturities and for higher contribution levels.
can select up to 10 funds and there are no charges for switching
between funds and as a "fund of funds" strategy can involve
many switches, then other plans with a lower fixed charge would ultimately
prove more expensive.
Waiver of premium: This
option if taken, protects your savings if you are unable to work.
If you cannot work for more than 6 months, temporarily or permanently,
then FPIL will pay your premiums for you from the 7th month until
maturity or until you work again. The cost of this varies with age
Premier Savings Plan Key Facts
Premier Savings Plan Brochure
Premier Savings Plan Technical Guide
Premier Savings Plan Application Form
Premier Savings Plan Application Form for Additional Life Insurance / Premium Protection
Direct Charge Authority Form
Banker's Standing Order Form
Bank Instruction Form
Fund Transfer Request Form
Withdrawl / Surrender Form