It’s important that your advisors are aware that as part of the former Standard Life Segregated Fund integration, some processes for segregated fund products from the former Standard Life have changed. Changes were made to bring alignment (where possible) to all segregated fund products so there’s one consistent process to follow. To communicate with your advisors, a related article, Change in segregated fund processing for former Standard Life products, will be live on Repsource this Monday, January 15.
Here is a summary of the changes now in effect:
Change of premium allocation option / sales charge option within a contract
- Moving from Back-end load or Low-load to No-load, whether to the same fund or a different fund is still done as a same day fund switch (no change from pre-integration rule). Please use the Fund Switch form (NN0827). If there are DSC charges to be paid by the client then the client must sign the form. If no charges apply, then you can simply indicate the date and time of client contact on the form (no client signature required).
- You must provide specific fund allocation instructions (dollar amounts for each fund) for 10% free money movement or the trade will be delayed pending receipt of investment instructions. [Pre-integration, the relative market value weighting of each Back-end load fund held (using previous day’s market value) was used as a default.]
- Movement from Low-load to Back-end load (and vise-versa), whether to the same fund or a different fund, will be processed as a two-day sell/buy transaction. Please submit a Change of Sales Charge Option form (NN0998) signed by the client. (Pre-integration, these were done as same day switches.) There may be potential for impact to guarantees and taxable disposition.
- Movement from No-load to Back-end load is no longer permitted. (This was allowed pre-integration.)
Changes to processing defaults
- Purchase requests without investment allocation information will no longer be defaulted to the No-load Ideal Money Market Fund. If allocation information is not provided, the money will not be invested until Manulife receives instructions.
Transfers between contracts
- Any transfer between different contracts that cannot be processed as a Transfer-in-Kind will be processed as a two-day sell/buy transaction.
- Requests to transfer from an RRSP to an RRIF (or other registered savings to registered income tax types) must be submitted on the Transfer to RRIF form (NN1582). This form contains provisions that alter the contract and must therefore be signed by the client. A letter of direction cannot be used for this type of transaction.
Ideal Segregated Funds contract – Moving to the Platinum No-load option
- For the Ideal Segregated Funds contract, moving from No-load or Back-end load to the Platinum No-load option is permitted without completing an application for contracts opened between October 15, 2007 and July 15, 2013. Please use the Change of Sales Charge Option form (NN0998). This is a two-day sell/buy transaction with potential for impact to guarantees and taxable disposition. A new contract number will be issued for administrative purposes. Only contracts sold during this date range have this option because the point of sale materials received at the time of purchase included the Platinum No-load option description. For contracts opened outside of this date range, movement to the Platinum No-load option is not permitted.
Clarification for client-initiated resets
- Resets are now available twice per calendar year for product options that allow client-initiated resets, (pre-integration, they worked on a contract/Series year basis).
To reiterate, the following processes have not changed:
- For registered savings contracts where the Series Maturity Date is December 31, age 71, (the latest age to hold the contract) resets will be allowed even if there are less than 10 years (15 years for the Ideal 100/100 Series) to the Series Maturity Date. This is because the Maturity Guarantee Value will be carried over and the Maturity Benefit Guarantee converts to the Payout Benefit Guarantee upon transfer to a registered income contract as specified in the Information Folder and Contract.
- For any other scenario (maturity date is not December 31, age 71), if there are less than 10 years (15 years for the Ideal 100/100 Series) to the Series Maturity Date, the reset will only be allowed if the Series Maturity Date is first extended to allow the minimum 10 (or 15) years, where possible. Please use the Series Maturity Date or Annuity Commencement Date Change Request form (NN1662) and then request the reset.
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