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The Top Hat Elite is a personal financial plan, which you, the Employer, can adjust to suit the needs of your employees, is essential to maintaining financial stability. With Top Hat Elite, the option of investing in two funds, the Original Fund and the International Fund is made available.
Key Benefits
- Full participation in the Original Lifestyle Pension Fund and the International Lifestyle Pension Fund
- The advantage of 100% income tax relief on premiums under current legislation.
- The option to take up to 25% of the Client Accumulation as a lump sum and use the balance to purchase an immediate annuity upon maturity of the policy.
The safety of investment spread for your dollar as the Funds investments cover a wide range of assets. - Flexibility in payments
- Attractive immediate annuity purchase.
Who Qualifies for Top Hat Elite?
Top Hat Elite is a contract that is effected by the employer on behalf of employees. The eligibility of employees is left to the discretion of the Employer, subject to the employees being at least 50 years old on their last birthday with a maximum age limit of 68 years.
Retirement Options
At the age of retirement there are two choices available to the employee. The first is to take as much as 25% of the Client Accumulation, tax free as a lump sum and use the balance to purchase an immediate annuity at the Company's then current rates, if better. Alternately, they can be ensured a larger monthly pension by using 100% of the Client Accumulation to Purchase an immediate annuity at the rates indicated above.
Premiums
The recommended minimum monthly premium is $200. As an added benefit, you may wish to increase the minimum premium. Increments of not less than $25 will be accepted at any time. You can further enhance your employee's retirement by channelling bonus payments to the plan. Simply make unscheduled premiums of not less than $500, 95% of which will go directly for the ultimate benefit of you employee.
Where do your premiums go?
For the first year, all the premiums paid by the Employer are assigned to individual accounts on behalf of each employee, after which each employee account is allocated to the Original Fund and the International Fund in the proportions selected. During the first policy year, depending on the level of payments, a portion of the premium is retained to meet establishment expenses.
If payments are increased, 80% of the increase will be allocated to the Funds in the first year of increase and 100% thereafter. In the case of unscheduled premiums, 100% of the payment will be allocated to the Funds from the onset.
All payments, regular or unscheduled, allocated to the funds are subject to a charge to 3%. Each month an amount is deducted from the Client Accumulation to cover administration of the policy.
- The tax benefits from Top Hat Elite substantially enhance the competitive rates already achieved. They include:
Tax free investment earnings. - All premiums on behalf of individual employees, not exceeding 1/3of their chargeable income, are allowable expenses of an Employer for tax purposes.
- A tax free cash lump sum of up to 25% of the amount payable may be made to the payee.
Paid-Up
If for any reason, financial or otherwise, the Employer is unable to continue making regular premiums to the plan, it can be made paid-up. The Company may require payment of a paid-up charge upon such a request.
Death Benefit
Should your employee die prior to retirement, Guardian Life will pay the beneficiary the greater of the total premiums paid, the client accumulation or the guaranteed client accumulation. The beneficiary can access the proceeds at a maximum amount of 25% immediately payable in cash, with the remainder used to purchase a guaranteed immediate annuity for the life of the beneficiary.
Fund Index and Valuation
Guardian Life established the Original Lifestyle Pension Fund Index and the International Lifestyle Fund Index with a base value of 100 in April 1989 and November 1998 respectively. A calculation is done each month on Allocation Day to determine the value of the indices relative to their bases to reflect the performance of the funds and to determine the current value of the Client Accumulation.
An annual audit of both Funds is performed by Guardian Life's auditors, Pricewaterhouse Coopers, Chartered Accountants, Port of Spain, Trinidad. The audit of the funds is separate from, and in addition to, the audit of the company as a whole.
Guaranteed Client Accumulation
Your Client Accumulation will be guaranteed to be no less than that arising under a similar client accumulation calculated using an index value growing at the guaranteed rate of 4.5% per annum for the Original Fund and 3.5% per annum for the International Fund.
Annual Statement to the Employer
At the end of the first year and at least once in each subsequent policy year, we will supply the Employer with statements showing the progress of each employee's Client Accumulation.
