Foresters Segregated Funds Deposit Maturity Date and ...

[Pages:3]Foresters Segregated Funds Deposit Maturity Date and Contract Maturity Date Process

Outlined below is a summary of the deposit maturity and contract maturity processes. It is intended to assist you in understanding the Foresters Segregated Funds maturity procedures.

A. Deposit Maturity Date

On each deposit maturity date, which occurs on the 10th anniversary date of a deposit or reset, your client is entitled to receive the deposit maturity guarantee, which is the greater of the guaranteed minimum amount, calculated prior to any transactions on the deposit maturity date, and the market value of the maturing units at the close of business on the deposit maturity date. Clients who have made more than one deposit into their policy may have multiple deposit maturity dates.

If the guaranteed minimum amount is greater than the market value of the maturing units by the deposit maturity date, an amount equal to the difference will be deposited into the CI Money Market Segregated Fund, at no cost to the client.

At the deposit maturity date, each deposit will be renewed and a new deposit maturity date will be set for 10 years after the current deposit maturity date ? unless CI receives a request from the client prior to the deposit maturity date for the deposit maturity guarantee. If the new deposit maturity date would fall within 10 years of the contract maturity date, then the new deposit maturity date will be deemed the contract maturity date. If the annuitant is over 75 years of age, the death benefit guarantee will be reduced for the first five years after the renewal. To renew a deposit, no action is required by the client.

If your client does not want to renew their deposit, we will require written direction signed by the client or electronic direction via FundSERV to proceed with one of the options noted below.

Please note that all requests should be received in the CI office prior to the deposit maturity date. The options are to:

1) Transfer the deposit maturity guarantee amount to a CI-managed product that the client is eligible to purchase. To complete the transaction, please submit the required application form.

2) Transfer the deposit maturity guarantee amount to a product offered by another financial institution. To complete the transaction, the applicable transfer form is required.

3) Request a cash payment (excluding locked-in plans). Withholding taxes will be charged, if required.

For more information on how to submit maturity instructions, please see the Maturity Settlement section below.

B. Contract Maturity Date

The contract maturity date is the date the segregated fund contract matures, and the contract may not be extended or held by the client beyond this date.

On the contract maturity date, your client is entitled to receive the greater of the guaranteed minimum amount or the market value of the contract. If the guaranteed minimum amount is greater than the market value of the maturing units on the contract maturity date, an amount equal to the difference will be attributed to the policy to acquire units of CI Money Market Segregated Fund, at no cost to the client.

We will require written direction signed by the client to proceed with one of the options noted below. Contract maturity payment instructions can not be submitted electronically via FundSERV. A wire order redemption received prior to the contract maturity date will be processed as a direct redemption upon receipt and can not pend until the actual maturity date.

Please note that all requests should be received in the CI office prior to the contract maturity date. The options are to: 1) Transfer to a CI-managed product that the client is eligible to purchase. To complete the transaction, please submit the required application form. 2) Transfer to a product offered by another financial institution. To complete the transaction, the applicable transfer form is required. 3) Request a cash payment (excluding locked-in plans). Withholding taxes will be charged, if required. 4) Transfer to an annuity offered by Foresters Life Insurance Company. To complete the transaction, the necessary transfer documentation is required.

For more information on how to submit maturity instructions, please see the Maturity Settlement section below.

C. Maturity Settlement

Submitting Manual Maturity Instructions ? at Deposit Maturity Date or Contract Maturity Date In order to comply with your client's request for any of the maturity options, CI must be in receipt of your client's signed instructions, signature guaranteed where required, along with the appropriate application and/or transfer form before the maturity date. All maturity settlement instructions must clearly indicate that the transaction is to be processed on the maturity date.

Prior to submitting maturity instructions, please ensure you contact your distributor to determine if there are any additional requirements.

Submitting Maturity Instructions Electronically via FundSERV ? at Deposit Maturity Date

Maturity instructions can be submitted electronically via FundSERV up to 60 days prior to any applicable maturity date. Wire order trade instructions for maturity amounts will remain pending until the maturity date when they will settle on T+1. Please contact your distributor for further information regarding placing wire order transactions for maturity amounts.

Please note that if any maturity instructions are pending, any subsequent FundSERV instructions will assume the next available deposit maturity date if within 60 days. If two wire order maturity redemptions are received, FundSERV will match the first wire order instruction with the closest maturing amount, then the second wire order maturity redemption with the next maturity amount. If no maturing amount is found within the next 60- day period, the wire order maturity redemption will be rejected.

Prior to submitting maturity instructions, please ensure you contact your distributor to determine if there are any additional requirements.

Note: For both written and electronic maturity instructions, if a trade placed prior to the maturity date is still pending on the maturity date and affects the calculation of the maturity benefit, the top-up payment (if applicable) and any maturity payout instructions will not be processed until after the trade has settled. Maturity instructions will only be processed if there are maturing units remaining in the policy after the trade has settled.

D. Tax Treatment upon Deposit Maturity and Contract Maturity

Non-registered Contracts: The difference that is paid when the guaranteed minimum amount is greater than the market value at deposit maturity or contract maturity will be treated as a capital gain and will be reported to the client on a T3 slip at the end of the year in which the difference is paid. This may be offset by any capital losses realized at the time of a withdrawal.

Registered Contracts: When the guaranteed minimum amount is greater than the market value at deposit maturity or contract maturity, the difference that is placed in the client's account can be retained within a registered contract and continue to accrue tax-free until a withdrawal. Upon a withdrawal where this amount is included as part of the redemption, these proceeds will be reported as income to the contractholder/annuitant on a T4 RSP/RIF slip.

Clients will receive a letter notifying them of a deposit maturity date or contract maturity date at least 60 days in advance. We are recommending that they speak to you about their options.

For any addition questions about the Foresters maturity procedures, please contact CI Segregated Funds Team at 1-800-563-5181, option 2.

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