Old Mutual former policyholders, their dependants or nominees who made contractual changes to their policies between January 2001 and December, have until December 2009 to inquire whether they are owed or not.
Peter de Beyer, managing director of customer solutions at Old Mutual, says his company is ready to process claims from qualifying former members, but is waiting for amendments to the Income Tax Act to be able to make cash payments to all qualifying members.
He said Old Mutual has set aside about R120million to fund cash payouts to former members as a commitment to enhance the savings of customers who made contractual changes to their policies.
To date, the assurance giant says it has paid out R323million to existing policyholders as a way of enhancing their policy values.
Old Mutual's announcement follows an agreement the life industry undertook with the minister of finance in December 2005, resulting in the signing of the Statement of Intent.
De Beyer says his company had enhanced the values of qualifying retirement annuities (RAs) and endowment policies that were still active on December 1.
He said contractual changes were enhanced to these policies between January 1 2001 and December 1 and members and policyholders were being notified in writing of such enhancements.
In terms of the Statement of Intent, cash payouts might be due in the case of RA fund policies that were no longer active as at December 1.
Nominees or dependants of deceased former members could also qualify, subject to the provisions of the Pension Funds Act and De Beyer said the onus was on such former members or their beneficiaries to request a cash payment.
According to him, RAs remain a valuable and tax efficient way of saving for retirement.
But in the case where members chose to reduce their contributions, stop paying their contributions or decreased the term of a traditionally structured RA, the costs already incurred were recovered from the accumulated fund values of the policies, which would result in a lesser return on investment for such customers.
The following RAs or provident fund policies qualify or meet the criteria for a cash payout.
The policy must have:
l ended before December 1;
l been changed between January 1 2001 and December 1. Changes include the taking of early retirement, stopping of premiums prematurely, decreasing premiums and reducing the term of the investment; and
l had its investment value reduced by more than 35percent because of the contractual change.
Former members, their dependants or nominees who qualify for cash payouts should contact Old Mutual on 0860-104-738 or send an e-mail to firstname.lastname@example.org, or mail a letter to PO Box 335, Mutualpark, 7451.