Retirement Solutions Frequently Asked Questions for client JMMB

FREQUENTLY ASKED QUESTIONS Why choose JMMB RS

LET JMMB’S RETIREMENT SOLUTION TAKE CARE OF YOU

JMMB believes that after a lifetime of work you deserve to breathe easy in retirement.

That’s why we created the JMMB Retirement Solution, a tax-free investment plan, tailor-made to make the most of your monthly contribution.

We believe in a holistic approach to your financial well-being, where we partner with you to create a financial plan to meet your retirement goal.

If you want to be financially independent in your golden years, the earlier you start preparing, the better. Whoever you are and whatever your vision for retirement, you want to make sure that you’re set up to enjoy it to the fullest.

We know that you may have questions and we have the answers and information to support you.

Whether you’re employed or self-employed, keep reading to see why you can trust your retirement to us.

FAQ 1. What is JMMB Retirement Solution?

JMMB Retirement Solution (“JMMB RS”) is an approved tax advantaged retirement plan as defined under the Income Tax Act and the Pensions (Superannuation Funds and Retirement Schemes) Act 2004. Contributions made to the Plan are tax deductible from salary, and the earnings of the Plan do not attract withholding tax.

"Tax Deductible " is an amount that an individual can subtract from their gross income. It reduces income and therefore the amount of income tax owed.

2. Who is the sponsor of JMMB Retirement Solution?

Jamaica Money Market Brokers Limited (“JMMB”) is the sponsor of the retirement plan.

As a licensed Administrator and Investment Manager by the Financial Services Commission, JMMB has the responsibility to administer and invest the assets of the plan.

3. Who is directly involved in the management of JMMB RS’s operations?

The Sponsor has selected Trustees who are responsible for the scheme’s operations. In

All individuals who are self-employed or employed in non-pensionable positions and do not currently contribute to an approved superannuation fund or another approved retirement scheme are eligible to join JMMB RS

addition, employees of the Sponsor act as Agents of the trustees. They will be directly involved in the administration and management of the JMMB RS’s operations. There are also member elected Trustees for the Retirement Scheme.

4. Who qualifies to become a member of JMMB RS? • The JMMB RS is open to all Jamaican workers

between the ages of 18 and 69 years.

• All individuals who are self-employed or employed in non-pensionable positions and who do not currently contribute to an approved superannuation fund or another approved retirement scheme are eligible to join JMMB RS. • Upon change of employment, potential members are entitled to transfer their pension benefits from an approved Superannuation Fund or Retirement Scheme to the JMMB Retirement Solution.

5. How does someone benefit from being a member of the JMMB RS? You determine your monthly contributions, you can maximize/increase the amount as you work towards achieving your retirement goal.

6. Am I able to contribute to two or more funds or schemes at the same time?

No, current Jamaican legislation prohibits this.

However, active members have the option of transferring pension benefits from another Approved Retirement Scheme or Superannuation Fund to JMMB Retirement Solution in the event of resignation or termination from employment.

7. How much can I contribute to JMMB Retirement Solution?

There is no set minimum contribution amount but it should be determined by your expected income needs at retirement.

8. How do I make contributions to JMMB RS? Contributions can be made either by: a. Salary deduction and the amount remitted to JMMB b. Bank cheque c. Transfer from an existing JMMB account or d. Wire transfer

9. If an employer chooses to contribute on behalf of their employees, how is this done?

If an employer decides to contribute to JMMB RS on behalf of a member, those contributions form a part of the member’s contribution.

Contributions by an employer cannot exceed ten percent (10%) of the member’s annual pay or wages.

In addition, contributions made by the employer are automatically vested to the member. However, the employer does not have to contribute, unlike with a traditional pension plan. The employer would remit contributions for the employee, together with the amount deducted from the employee’s salary to JMMB. “Vested” means that ownership of your employers’ contributions become wholly owned by the investor.

Upon applying for membership, you will be advised about the various fund management strategies and relevant risk profiles

10. If I die, what would happen to my money?

Each active member is asked to submit information about their beneficiaries so that in the event of death, the beneficiaries will receive an allocation of your pension benefits based on the information provided. If the listed beneficiary is a child, you should name a Trustee or your will should include provisions concerning who is legally able to manage the money on the child’s behalf.

11. What guarantees do I have of increased returns on my pension benefit as opposed to investing it myself?

There are no guarantees on the returns on your pension benefit because this depends on prevailing market conditions. Upon applying for membership, you will be advised about the various fund management strategies and relevant risk profiles. This will assist you in deciding which is best for your circumstances.

12. When will I be able to access my pension benefits?

You may be able to claim your pension benefits once you have satisfied the following: • Normal Retirement A member’s Normal Retirement Date can be any day (chosen prospectively by the member) between the ages of 60 years and 65 years.

Once the member attains that age, he is entitled to receive a Normal Pension.

• Late Retirement A member of the P, seeking to delay retirement, cannot retire at a date greater than five (5) years beyond his Normal Retirement Date.

• Early Retirement A member can choose to retire early within ten (10) years of his Normal Retirement Date.

• Disability Retirement If a participant/member becomes totally and permanently disabled as a result of bodily injury, ill-health, disease or mental disorder, he shall be retired.

The Trustees acting on the advice of a duly qualified and registered medical practitioner shall determine the disability of the member.

The Trustees may determine the permanency of the member’s disability upon the advice of a medical practitioner, at any reasonable time prior to his Normal Retirement Date.

13. Since I’m immediately vested, will I be able to access my funds before I have satisfied the above- mentioned criteria?

No. Only upon satisfying the above-mentioned criteria can you obtain the portion you have invested along with the interest earned on the account. However, your accumulated account balance, including the market value of your contributions together with gains on the portfolio, may be transferred to another Superannuation Fund or Retirement Scheme if so requested.

14. How is my money invested?

When you become a member of JMMB Retirement Solution, you will be required to select from one of three asset mixes or investment strategies operated within the JMMB RS. Each asset mix will have varying levels of cash, bonds or equities. The lower risk levels will be associated with higher amounts of cash and vice versa. A brief description of the three (3) types of asset mixes is included on the following pages.

THE AGGRESSIVE FUND The aggressive fund is typically for investors with an above average risk appetite and a long time horizon to retirement.

THE STRATEGIC ASSET ALLOCATION WILL BE AS FOLLOWS:

Asset Class

Description

Allocation Range

Equities

Local regional and international securities

25% - 65%

Fixed Income

Local Jamaican and US denominated bonds

30% - 60%

Money Market Instruments Alternative Assets

.05% - 2.5% Real Estate Investments, Jamaican denominated Preference shares, Corporate offerings

10% - 30%

THE MODERATE FUND The moderate fund is typically for investors with an average risk appetite and a medium to long term time horizon to retirement.

THE STRATEGIC ASSET ALLOCATION WILL BE AS FOLLOWS:

Asset Class

Description

Allocation Range

Equities

Local regional and international securities

15% - 40%

Fixed Income

Local Jamaican and US denominated bonds

40% - 75%

Money Market Instruments Alternative Assets

1% - 35% Real Estate Investments, Jamaican denominated Preference shares, Corporate offerings

5% - 20%

THE CONSERVATIVE FUND The conservative fund is typically for investors with below average risk appetite and a short time horizon to retirement.

THE STRATEGIC ASSET ALLOCATION WILL BE AS FOLLOWS:

Asset Class

Description

Allocation Range

Equities

Local regional and international securities

10% - 30%

Fixed Income

Local Jamaican and US denominated bonds

45% - 80%

Money Market Instruments Alternative Assets

5% - 20% Real Estate Investments, Jamaican denominated Preference shares, Corporate offerings

5% - 15%

15. Is the JMMB Retirement Solution unitized?

The Fund which holds all monies invested for the retirement plan is unitized. This means that specific assets are attached to each of the three investment strategies and your interest in the Fund is divided into units. This is a convenient way to manage and represent individual member’s portion of the Fund. Your contributions are used to purchase units at the current price in your chosen investment strategy.

16. Why do unit prices fluctuate?

The assets held in the Fund on behalf of each individual member are represented by units.

This is a convenient way to manage and represent individual members’ holding in the Fund. Since the prices of the assets in the fund are market determined and will fluctuate, the value of the units representing the member’s holding will also fluctuate.

17. How often is each member’s portfolio reviewed?

Each member’s portfolio will fall into either the Conservative, Moderate or Aggressive investment strategy. These portfolios are managed and monitored daily.

18. Is it mandatory for me to make monthly contributions and if yes what is the minimum $ amount?

No, you do not have to make regular monthly contributions and there is no minimum. However there is a maximum of 20% of total annual salary.

You are required to contribute at least once annually.

19. Is there a mandatory minimum period my funds have to be invested in the JMMB RS? No.

20. When can a member start receiving benefits?

Members can withdraw the monies at the earliest age 50. This withdrawal can be one of two options: (1) a lump sum of 25% of the account balance and the rest as an annuity. (2) A straight annuity purchased through JMMB but sold by a life insurance company.

21. Can I switch between funds at any time or designated times, and are there any associated costs?

There is no cost for switching between strategies but switching more than once per year is discouraged.

22. What is the fee structure for JMMB RS? JMMB RS has a simple and transparent fee structure. No administrative fees apply to JMMB RS. However, JMMB as managers of the JMMB RS,

charges a management fee of up to 2.5% per annum on the total assets of the Fund.

23. Can JMMB Retirement Solution Trustees increase the fees without notice to the members?

Any adjustment to fees would require adequate notice being given to members.

24. Is there a penalty for withdrawal from the JMMB RS? Conditions for withdrawal are detailed below: By law, the earliest you can withdraw from the Retirement Plan is age 50 years (assuming a stated normal retirement age of 60). That is called early retirement but you may also withdraw for ill health. These are stipulations laid down by the regulators tax authority and the Trust Deed and Rules. However, you may transfer the funds at any time from JMMB RS to another approved Pension Plan or Retirement Scheme if you so desire. There would be no associated penalty fee applied to member account.

25. How can I keep track of the progress of my pension investment?

Members will receive annual reports on the progress of the fund. Additionally, members can log-in to their account on our website and view their investments at their convenience.

26. What can I do to boost my retirement plan if I am already contributing the maximum 20% to my JMMB RS account?

JMMB offers a range of Unit Trust options and other investment solutions that provide good long-term investment opportunities to supplement your retirement portfolio.

Speak with a JMMB representative about your retirement plans and goals or email jmmbpensions@jmmb.com for further details

JOINING IS EASY AND CONVENIENT To join simply: Speak with a JMMB representative about your retirement plans and goals.

OR Complete our enrolment form by scanning the barcode seen at right and then email it to jmmbpensions@jmmb.com

"Retirement is wonderful if you have two essentials: much to live on and much to live for."

- Unknown

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