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Investment Solutions for corporate entities

Investment solutions in the hands of the corporate.

Momentum offers investments solutions that allow the corporate investor to manage the term, options and minimum payout required; and post-retirement medical liability products, such as the Momentum Customised Annuity Policy, so that employers can provide employees and pensioners assistance with long-term medical aid contributions.


Fund information
Momentum Maturity Guarantee Plus Open

A single premium investment product aimed at institutional investors seeking to maximise investment return over a specified term.

How it works

Momentum Maturity Guarantee Plus puts control in the hands of the investor.

  • The investor selects the term of investment, with a minimum term of five years and a maximum term of ten years.
  • The investor selects the minimum pay-out required at the end of the investment term i.e. what percentage of the initial deposit must be guaranteed at the maturity of the contract.
  • If the minimum pay-out at maturity is higher than 100%, it implies that a minimum investment return will be guaranteed over the term of the investment. The product can provide a maximum annual investment return guarantee of 5%.
  • The investor selects the investment option to generate the underlying performance.
  • The investor has the ability to lock in returns and recalibrate investment objectives at policy anniversaries.
  • Based on the investor’s choices, a cap on the annual returns of the underlying growth engine, net of fees, is calculated that will enable the provision of the guarantee. The quoted cap on the annual returns will reduce as the chosen minimum maturity value increases and the term of investment reduces.

It is particularly appropriate for:

  • Investors who would like to benefit from the upside potential of volatile investments like equities but require downside protection in the event of a market decline.
  • Investors desiring to maximise investment returns within a defined risk appetite.
  • Investors who need to plan with confidence and want certainty, not only of capital preservation but also of a guaranteed minimum return on their investment.

Differentiating features

  • Provision of explicit capital and investment return guarantees while benefitting from the upside potential of volatile investments like equities.
  • Choice, control and flexibility placed in the hands of the investor.
  • Pricing and management of guarantees follow international best practice.
  • Competitive fee.
  • Guarantees underwritten by one of the country’s strongest insurer balance sheets.
Momentum Customised Annuity Policy - Post-retirement Medical Liability (PRML) Open

Momentum Post-retirement Medical Liability (PRML) products are aimed at employers to assist with managing the risk of an open-ended post-retirement medical liability and to provide employees and pensioners with a secure, flexible funding approach to meet long-term medical aid contributions.

How it works

The Momentum Customised Annuity Policy is aimed at employers who want to optimally fund for the liability they have in respect of post-retirement medical aid subsidy benefits payable to retiring employees (who qualify under the employer's subsidy policy) in a tax efficient structure. This liability is usually recorded in the employer’s balance sheet under IAS19.

Objectives

To be an asset for employer groups that fund for the post-retirement medical subsidy benefits payable to the medical scheme, this payment to the medical scheme is guaranteed for the life of the retiring employees that qualify under the employer’s medical aid subsidy policy.

Increases on the With Profit Annuity target 115% of inflation (as measured by the increase in CPI) - this increase target is not guaranteed.

To provide employers with investment flexibility to invest any additional funding assets in a Funding Account in line with the required risk versus reward profile of the employer.

To provide a tax efficient structure for employers to fund for these liabilities, the flexible structure combines a Momentum With Profit Annuity and a Funding Account that the employer can combine as an asset to fund for the post-retirement medical subsidy benefits payable to the medical scheme.

How do we aim to achieve Momentum Customised Annuity Policy objectives?

The benefit paid to the medical scheme is provided by the With Profit Annuity part of the asset. For the With Profit Annuity, Momentum uses the Momentum Golden Growth With Profit Annuity at a 3.5% Post Retirement Interest (PRI).

The Golden Growth With-Profit Annuity uses sophisticated best practise risk management to manage investment risks. This allows more freedom to invest in growth assets to generate the increases, while still managing the risk of negative/poor investment returns.

To reduce the volatility of year-to-year increases, the investment returns of the bonus-generating portfolio are smoothed over a 6 year period.

The combination of the growth assets used to generate increases and the 3.5% PRI, targets increases of approximately 115% of inflation. However, there is no guarantee that this target will be met – it relies on the returns of the assets in the bonus generating portfolio.

The Momentum Customised Annuity is suitable for employer groups:

  • Looking to optimally fund for any post-retirement medical subsidy benefit for retiring employees.
  • Who value the benefit of growth-assets generating future increases on the With Profit Annuity relative to medical inflation.
  • Who want flexibility to invest a portion of the assets in the separate Funding Account with a choice of investment portfolio.
  • Who value the tax treatment of the premiums and assets in the Momentum Customised Annuity.

Differentiating features

  • The Funding Account provides employers with the option to invest assets in addition to the With Profit Annuity.
  • The employer has a choice of 5 portfolios in the Funding Account to invest in, to cater for different risk and reward preferences.
  • The With Profit Annuity has the lowest on-going charges in the market. The lower charges translate directly into higher future increases, because the investment returns earned on the assets are reduced by on-going charges before they are used to provide increases.
  • We have the highest exposure to growth assets in our bonus generating portfolio. This results in higher expected increases.