Important Information regarding Significant ... - Manulife



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March 29th, 2004

Dear Colleague:

Important - Information regarding changes to your client’s NAL-Investor & NAL-Investor Plus contracts

Effective June 11th, 2004, all clients with NAL-Investor contracts will have their policy information transferred to a different administrative system. Although we will continue to honor the terms of their contract, there will be administrative changes and product feature enhancements to all existing NAL-Investor contracts.

We review and refresh our products regularly to ensure that they continue to serve investors’ needs. The conversion of NAL-Investor contracts to another system will allow us to consolidate our administrative systems and provide you and your clients with better services and products.

We are pleased to offer you the opportunity to move your NAL-Investor clients to Manulife GIF & GIF encore. We have transfer programs available in order to make this transition as easy as possible. We’ve made significant improvements to our Transfer Privilege Service (TPS) program, including the option to move your client’s NAL-Investor to Manulife GIF Series 1. Enclosed, you’ll find more details on these transfer programs.

To continue servicing your clients with the best choices available, you can provide them with products that offer more choice, growth potential and security – Manulife GIF & GIF encore.

To facilitate this system conversion, unscheduled transactions will be suspended from June 7th to June 11th inclusive. If we receive any transaction requests during this period, they will be held and then processed after June 11th, 2004. We appreciate your support during this time.

What does this package include?

1. A complete list of your NAL-Investor clients (all tax-types are included on this list).

2. Details on the transfer programs available to you.

3. A brochure providing you with information on our GIF & GIF encore products.

4. A copy of the communication to your client (to be mailed April 11th, 2004) which details the changes to:

• tThe frequency of when their funds are valued,

• the allocation of gains and losses for non-registered contracts,

• their maturity guarantee benefit, and

• the look of future statements.

For a complete summary of these changes, please review the enclosed insert or visit the Legacy Product section of Repsource at manulifeinvestments.ca

Thank-you for your continued support of Manulife Investments and the products we offer. We value your business, and will continue to offer your clients the best products and service available.

Sincerely,

Paul Partridge

Product Director, Segregated Funds

Manulife Financial

SUMMARY OF CHANGES

Does this conversion mean my clients will need to sign a new contract?

No. The movement of their NAL-Investor contract information to the new administrative system does not constitute the sale of a new contract. Other than the changes outlined in the communication to your clients, their contract provisions remain intact. This means maturity and death benefit guarantees values will not be impacted, though clients may see an improvement to their guarantee maturity benefit.

Does this now mean that my clients can make new deposits?

No. The changes made to NAL-Investor contracts in 2001 which eliminated the ability to make deposits (including PACs), still apply.

In order for your client to make new deposits, they will need to open a new Manulife GIF or GIF encore contract.

Can my clients still switch between their NAL-Investor Funds?

Yes, your clients will still be able to switch between the three remaining funds.

Does this mean my clients will have access to the full GIF fund line-up?

No. In order to access any additional GIF funds, your clients must transfer the assets in their NAL-Investor contract to a new GIF or GIF encore contract. Once your clients are invested in GIF or GIF encore, they can benefit from the valuable features these products offer.

How will the allocations of gains/losses change for my non-registered clients?

Due to the change in the administrative system, effective June 11th, 2004, your clients’ units will no longer be time-weighted as they were in NAL-Investor. On the new system, your clients will be allocated income realized by the fund (interest, dividends, and capital gains/losses) only if they hold units in the fund on the allocation date, December 31st each year. This method of allocation is referred to as the ‘Distribution Date Method’, and is similar to that of the mutual fund model.

An explanation of this allocation method can be found on the enclosed communication to your clients and on Repsource.

Will this change of administrative system result in a taxable event?

As we are maintaining the NAL-Investor funds on the new administrative system, no allocations of gains or losses will result from this conversion.

What options do my clients have?

In the communication to your clients, three options were provided:

Option 1 - Maintain their NAL-Investor contract as it stands.

If your clients elect to remain in their NAL-Investor contract, the only transactions permitted will be switches between the three remaining funds and redemptions.

Option 2 -Transfer their NAL-Investor contract to a Manulife GIF/GIF encore contract.

• Manulife GIF & GIF encore offer the most choice, growth potential and security available in a segregated fund investment. By moving their NAL-Investor contract to Manulife GIF or GIF encore, they can take advantage of the valuable benefits these products offer.

• To make the transfer from GIF & GIF encore as easy as possible, transfer programs are available to you. We have made significant improvements to the Transfer Privilege Service program, including the option to move to GIF Series 1. Full details on these transfer programs, including how to decide which product is best for your client, are attached.

Option 3 - Clients can elect to redeem their NAL-Investor contract (with the exception of locked-in funds).

Your client’s NAL-Investor contract can be redeemed at any time with the exception of locked-in funds, which cannot be redeemed, but can be moved to another product. Normal surrender charges will apply. Applicable federal or provincial withholding tax charges will apply to withdrawals from registered contracts.

What happens if my client remains invested in their NAL-Investor contract past the conversion date?

If your clients choose to stay invested in their NAL-Investor contract past this date, their contract will be transferred over to the new administrative system. As a NAL-Investor contract on the new system, you and your clients:

• will be able to switch between the three remaining funds,

• will benefit from daily fund valuation (versus weekly valuation),

• will only be able to request fund switches on paper, and

• will be allowed to make redemptions from their funds, and can make these requests electronically, or on paper.

After the conversion date, can I still use the transfer programs to purchase a GIF contract for my NAL-Investor client?

Yes. Once your client’s NAL-Investor contract has been converted to the new system, you can still take advantage of the transfer programs that allow your clients to transfer the assets of their NAL-Investor contract to a Manulife GIF contract.

All clients that have transferred their NAL-Investor contract to a GIF or GIF encore contract may:

• choose from over 60 leading investment funds, from 16 different managers – for optimum diversification and growth,

• make new deposits (including PACs) to GIF Series 2, and GIF encore Series 1 or Series 2.*

* GIF Series 1 remains closed to new deposits. However, NAL-Investor assets transferred through the TPS Program can be moved to GIF Series 1.

What do I need to transfer my clients?

To complete a transfer to a new GIF or GIF encore contract, you will require a:

1. point-of-sale kit (MK7137E),

2. request for transfer form (NN0897E),

3. Manulife GIF/GIF encore Application (NN0821E/F), or

4. Manulife GIF/GIF encore RRIF/LIF/LRIF Application (NN0891E/F).

Contacts

Manulife’s dedicated team of customer service representatives is available from 8:00am to 8:00pm (EST) daily to answer any inquiries about the administration or servicing of your business. Support is available for:

• Manulife Financial advisors: 1-888-790-4387 for all of Canada except Quebec, and 1-800-355-6776 for Quebec only.

• National Account advisors: 1-877-651-6172 for all of Canada except Quebec, and 1-800-355-6776 for Quebec only.

Or visit us on-line at manulifeinvestments.ca to obtain information on products and solutions.

the improved Transfer Privilege Service (TPS) program

Significant improvements have been made to the “Transfer Privilege Service” program. These improvements are not available for internal transfers.

• To maintain their 100% guarantee value and maturity date, we have opened the original GIF Series 1 funds to NAL-Investor contract holders only– which provide a 100% maturity guarantee. Clients who move their NAL-Investor assets to GIF Series 1, also benefit from two resets per calendar year*, potentially locking-in market gains. Only NAL-Investor assets transferred through the TPS program will be accepted into GIF Series 1.

• In addition, we are waiving the current $2500 minimum investment for GIF or GIF encore contracts for assets transferring from NAL-Investor contracts. If you have clients with NAL-Investor assets less than this amount, you may still transfer to Manulife GIF or GIF encore**.

To move your clients’ NAL-Investor assets to Manulife GIF or GIF encore, you have a choice of two transfer programs. The details of these programs are enclosed. In order to help you with this decision, we’ve included some points for you to consider when deciding on the best way to transfer your clients’ assets.

*Refer to the Manulife GIF & GIF encore ‘Information Folder & Contract’ for reset rules.

** The $2500 minimum investment is being waived only for NAL-Investor assets being transferred via the TPS program, however the $1000 NAL-Investor minimum still applies. Future deposits to Manulife GIF or GIF encore must meet existing conditions.

|How the transfer programs affect the client Guarantee values and Guarantee maturity dates |

|Transfer Program |GIF Series 1 |GIF Series 2 |GIF encore Series 1 |GIF encore Series 2 |

|Internal Transfer- Waive DSC Program |Not Available |Maturity Date: |Maturity Date: New 10-year term. |Maturity Date: |

| | |New 10-year term. | |New 10-year term. |

|This transfer program is best for clients| | |Maturity Guarantee: | |

|who: | |Maturity Guarantee: |New - based on 100% of transferred |Maturity Guarantee: |

|-still have applicable DSC | |New - based on 75% of transferred |market value. |New - based on 75% of transferred |

|-have a market value that is | |market value. | |market value. |

|substantially higher than their guarantee| | |Death Benefit: | |

|value | |Death Benefit: |New - based on 100% of transferred |Death Benefit: |

|-don’t mind starting a full DSC schedule | |New - based on |market value. |New - based on |

|again | |100% of transferred market value. | |100% of transferred market value. |

|-don’t mind beginning a new 10-year | | |DSC: New schedule begins. | |

|maturity term | |DSC: New schedule begins. | |DSC: New schedule begins. |

|NAL-Investor TPS program |Maturity Date: |Maturity Date: |Maturity Date: New 10-year term. |Maturity Date: |

| |No change to existing date*. |No change to existing date*. | |New 10-year term. |

|This transfer program is best for clients| | | | |

|who: |Maturity |Maturity |Maturity Guarantee: | |

|-have guarantee values greater than the |Guarantee: |Guarantee: |New - based on 100% of transferred|Maturity Guarantee: |

|market value (maturity dates and |No change to the existing 100% |Changed to 75% maturity guarantee |market value. |New - based on 75% of transferred |

|guarantee values will only be maintained |maturity guarantee benefit. |based on the existing guarantee | |market value. |

|if moved to GIF Series 1 funds) | |amount. | | |

|-want to maintain their 100% maturity |Death Benefit: | |Death Benefit: New - based on 100%| |

|guarantee |No change to the existing 100% death |Death Benefit: |of transferred market value. |Death Benefit: |

| |benefit guarantee. |No change to the existing 100% death | |New - based on |

| | |benefit guarantee. | |100% of transferred market value. |

| | | | | |

| |DSC: Point-in-time maintained in GIF | |DSC: Point-in-time maintained in | |

| |scale |DSC: Point-in-time maintained in GIF |GIF scale. |DSC: Point-in-time maintained in |

| | |scale. | |GIF scale. |

| | | | | |

*The maturity date of some contracts may be shortened to 10 years.

See enclosed client communication for details.

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