OLD MUTUAL WEALTH

INVESTMENT VEHICLES
2
OLD MUTUAL WEALTH
INVESTMENT VEHICLES
Old Mutual Wealth is an elite service offering brought to you by
Old Mutual Investment Services (Pty) Ltd and Old Mutual Life
Assurance Company (South Africa) Ltd, Licensed Financial Services Providers
CONTENTS
Once goals and strategies have been set for your client, Old Mutual Wealth has a full range of investment vehicles designed
and managed to help you achieve these goals.
For discretionary investments
3
Old Mutual Wealth Linked Investment 3
Old Mutual Wealth Life Wrapped Investment 3
For retirement savings
4
Old Mutual Wealth Retirement Annuity Investment 4
Old Mutual Wealth Preservation (Pension or Provident) Investment 4
For retirement income
5
Old Mutual Wealth Linked Retirement Income 5
3
OLD MUTUAL WEALTH
INVESTMENT VEHICLES
Old Mutual Wealth is an elite service offering brought to you by
Old Mutual Investment Services (Pty) Ltd and Old Mutual Life
Assurance Company (South Africa) Ltd, Licensed Financial Services Providers
FOR DISCRETIONARY INVESTMENTS
Old Mutual Wealth Linked Investment
THIS IS A FLEXIBLE SAVINGS VEHICLE SUITABLE FOR GROWING CAPITAL AND OFFERING CLIENTS COMPLETE LIQUIDITY.
This investment vehicle aims to provide the discerning client with optimal capital growth as well as the ability to draw a
discretionary income. It offers access to a comprehensive range of exible investment options that allow maximum freedom of
choice concerning the underlying investments.
Clients may invest in the Old Mutual Wealth Linked Investment at any stage in their lives.
Once-off, recurring investments via debit order and additional ad hoc investments are allowed.
Client may disinvest and may choose to schedule regular withdrawals into their bank accounts.
All interest income, rental income, foreign dividends and interest earned in the underlying unit trust funds are taxed in the
hands of the client at his or her marginal rate.
Capital gains on disposal of units are taxed in the hands of the client at his or her appropriate capital gains tax rate.
This should ideally be considered a medium- to long-term investment.
The Linked Investment Services Provider (LISP) is regulated by the Financial Advisory and Intermediary Services Act (FAIS)
and underlying unit trust funds are regulated by the Collective Investment Scheme Control Act (CISCA).
The client mandates Old Mutual Investment Services (OMIS), a licensed Administrative Financial Services Provider to
administer and to carry out related instructions on their behalf.
The client can use the LISP to access multiple unit trust funds.
Old Mutual Wealth Life Wrapped Investment
THIS IS A TAX-EFFICIENT INVESTMENT VEHICLE DESIGNED TO GROW CAPITAL
This is a long-term insurance policy that helps to manage estate planning and could be a tax-efcient way to save, depending
on your clients unique tax situation. Since returns are taxed within the life policy at the insurers income tax rate, net of tax
returns can be enhanced for higher marginal rate tax payers. Clients also enjoy the exibility of a comprehensive range
of investment opportunities which spans the entire investment spectrum and can be combined to match a clients personal
investment strategy.
Clients may invest in the Old Mutual Life-Wrapped Investment at any stage in their lives.
Additional investments are limited to 120% of the higher investment made in one of the previous two years. Recurring
investments via debit order are allowed.
The law currently restricts Old Mutual to paying only one loan and one disinvestment during the rst ve years of the
contract, equivalent or less than the investment made plus 5% p.a. compound growth (and less any prior disinvestment
or loan).
Clients will only be allowed to use post-tax money to invest into this product.
All income and capital gains earned in the policy is taxed in the hands of the insurer, in this case
Old Mutual Life Assurance South Africa (OMLACSA) Limited, (referred to as four funds taxation).
Distributions are reinvested net of four-funds taxation.
Capital gains tax (CGT) is deducted prior to units being sold.
Proceeds are received tax free in the hands of the client.
4
OLD MUTUAL WEALTH
INVESTMENT VEHICLES
Old Mutual Wealth is an elite service offering brought to you by
Old Mutual Investment Services (Pty) Ltd and Old Mutual Life
Assurance Company (South Africa) Ltd, Licensed Financial Services Providers
FOR RETIREMENT SAVINGS
Old Mutual Wealth Retirement Annuity Investment
THIS INVESTMENT VEHICLE ALLOWS FOR PRE-TAX ACCUMULATION OF CAPITAL FOR RETIREMENT.
Memberscontributions to a retirement annuity are deductible from their taxable income, subject to the ruling legislation.
The investment offers access to a comprehensive range of rand-denominated unit trust funds, as well as specialist life and
guaranteed funds that allow maximum freedom of choice concerning underlying investments and risk exposure (within the
limits set by Regulation 28). In terms of current legislation, the member benet is also protected in the fund should the member
become insolvent.
Clients may invest in the Old Mutual Retirement Annuity Investment at any stage in their lives. Note that, transfers from
provident funds to retirement annuities may have adverse consequences on tax and liquidity.
Once-off, recurring investments via debit order and additional ad hoc investments are allowed.
Disinvestments from a retirement annuity are not allowed with the exception of small retirement annuities, currently below
R7 000. Loans are not allowed.
A maximum of one third of the retirement benet can be taken as a lump sum at retirement, while the remainder of the
retirement benet must be used to purchase an annuity to provide income during retirement.
The income produced from the annuity purchased with the balance of the retirement benet will be fully taxable in the
hands of the client at his or her marginal tax rate at that time.
Benets are paid in terms of the rules of the Fund. These happen at retirement, death, disability or emigration.
Premiums paid are tax deductible by the member, within the limits of the Income Tax Act.
Growth within the retirement fund is tax free (currently no income tax and CGT is payable, subject to changes in
legislation).
A portion of the lump sum taken at retirement may be tax-free.
Withdrawals from a retirement annuity are not allowed. Benets may be transferred to another retirement annuity prior
to retirement.
The investment is not subject to a minimum contractual term. However by law a member of a retirement annuity fund may
only retire from the age of 55, although earlier retirement may be permitted in the event of disability.
Old Mutual Wealth Preservation (Pension or Provident) Investment
WITH THIS VEHICLE YOU CAN TAX-EFFICIENTLY PRESERVE YOUR PENSION OR PROVIDENT FUND WITHDRAWAL BENEFITS
FOR RETIREMENT.
These investments allow clients to preserve their retirement savings after a job change or when they cease to be a member of
a company pension or provident fund. Clients may disinvest once before retirement, subject to tax and retirement legislation.
This investment allows them to postpone the tax payable on their retirement savings until after retirement, when it is likely that
the taxable income of the employee (taxed at the omployees marginal tax rate) will be less. This also allows for compound
returns to accumulate tax-free on the full amount until retirement.
This investment offers access to a comprehensive range of rand-denominated unit trust funds, as well as specialist life and
guaranteed funds that allow maximum freedom of choice concerning underlying investments and risk exposure (within the
limits set by Regulation 28).
GENERAL RULES GOVERNING PRESERVATION PENSION PLANS
On retirement, a maximum of one third of the value of the investment may be taken in the form of a lump sum, subject
to tax.
The balance must be used to purchase an approved compulsory annuity.
5
OLD MUTUAL WEALTH
INVESTMENT VEHICLES
Old Mutual Wealth is an elite service offering brought to you by
Old Mutual Investment Services (Pty) Ltd and Old Mutual Life
Assurance Company (South Africa) Ltd, Licensed Financial Services Providers
GENERAL RULES GOVERNING PRESERVATION PROVIDENT PLANS
On retirement, the full value of the investment can be withdrawn in the form of a lump sum, subject to tax.
Alternatively, the benet may be taken part as an annuity and part as a lump sum.
TAXATION AND LIQUIDITY
No tax is payable on transfer from another approved pension or provident fund into the Old Mutual Wealth Preservation
Funds.
Of the lump sum payout at retirement, up to R315 000 (current limit according to the Income Tax Act) may be tax free
within certain limits. The balance will be taxed at between 18% and 36%, subject to limits, as determined by the Income
Tax Act. The limits described here are subject to changes in legislation.
Currently, preservation funds are not taxed on interest and capital gains that remain in that fund.
Prior to retirement, one taxable withdrawal is allowed, of which the rst R22 500 is tax free, subject to any restrictions
which may be imposed by the transferring fund. This limit includes any amount withdrawn at the time of the initial transfer
to the preservation fund. Thus, if a cash amount is taken at that point, no further withdrawal will be allowed (unless the
amount taken was less than R22 500).
The investment is not subject to a minimum contractual term. However, by law a member of a retirement annuity fund may
only retire from the age of 55, although earlier retirement may be permitted in the event of disability.
FOR RETIREMENT INCOME
Old Mutual Wealth Linked Retirement Income Investment
THIS VEHICLE PROVIDES A MARKET-LINKED INCOME TO CLIENTS FOR LIFE. GROWTH WITHIN THE VEHICLE IS TAX FREE, BUT
INCOME IS TAXED AT THE CLIENTS MARGINAL TAX RATE.
The Old Mutual Wealth Linked Retirement Income allows a client retiring from a retirement fund or a policyholder transferring
a compulsory annuity from an insurer, to structure their retirement benet into a market-linked income. This investment provides
clients with a comprehensive range of rand-denominated unit trust funds, as well as life and guaranteed funds to achieve
potential capital growth and generate a regular income. These funds can be changed as investment conditions change.
As a exible, market-linked annuity, this product enables clients to adapt their income rate on an annual basis (currently
between 2.5% and 17.5% of the portfolios total asset value), allowing them to balance income needs and capital
preservation.
Unlike guaranteed annuities, if the client dies then payment of the annuity income can continue to be paid to a nominated
beneciary or the capital balance can be fully paid out (both subject to tax). However, it is essential that the client selects
an income rate that will not deplete his or her capital, because if the income withdrawn plus the ongoing charges are
greater that the investment return generated, the invested capital will erode.
Income tax is payable by the client at his or her marginal tax rate on the income drawn. An income can be drawn on a
monthly, quarterly, half-yearly or annual basis.
The tax payable is based on the total income received from all Old Mutual annuities.
The tax deducted by Old Mutual Wealth may not accurately represent the clients actual tax liability, as the client may
have other sources of income not known to Old Mutual Wealth.
Old Mutual Wealth will deduct tax in terms of the tax tables issued by the South African Revenue Services (SARS). If the
client wishes to use a lower rate of tax, a tax directive must be provided to Old Mutual.
Tax directives are currently valid for one year and application for these should be made annually to ensure the relevant
rate is applied. If the tax directive expires, normal tax rates will be applied without any conrmation being sent to the
client.
The client has exibility in terms of the investment funds selected and the level of income received, subject to certain
restrictions contained in the ASISA standard relating to living annuities. The Old Mutual Wealth Linked Retirement Income
is regulated by the Long-Term Insurance Act and Income Tax Act.