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Nordben’s Flex Plan is a retirement savings product that was available in seven currencies until Nordben stopped issuing this product to new business in 2000. It pays out at least the accumulated account (Policy) value on retirement (maturity), earlier surrender or on earlier death.
The seven currency Policyholders’ Funds (the Funds) are held by Nordben to meet its liabilities under the Flex Plan retirement savings product.
The Funds have low investment risk because capital and bonuses are guaranteed in full.
The investment approach is as follows:
The assets are held in the currency of the Fund or currency hedging is used to eliminate exchange rate risk.
The Funds are invested as follows (as at 30 September 2020):
CHF |
DKK |
EUR* |
GBP |
NOK |
SEK |
USD |
|
---|---|---|---|---|---|---|---|
Government Bonds |
0.0% |
99.8% |
99.9% |
99.4% |
99.6% |
52.7% |
99.2% |
Corporate Bonds |
0.0% |
0.0% |
0.0% |
0.0% |
0.0% |
46.5% |
0.0% |
Cash |
100.0% |
0.2% |
0.1% |
0.6% |
0.4% |
0.9% |
0.8% |
|
|
|
|
|
|
|
|
Average modified duration of fixed interest assets (years)** |
0.0 |
0.9 |
0.3 |
0.9 |
0.6 |
0.2 |
1.4 |
|
|
|
|
|
|
|
|
*The EUR Fund is allowed to invest in German, French and Finnish Government Bonds. **The modified average duration is a measure of how the value of a fixed interest asset changes in relation to its yield. The higher the duration, the more sensitive the asset is to changes in interest rates. |
The performance of the Funds also depends on the expenses they have to meet, which are outlined below.
The Funds need to meet various expenses (costs). These costs include the investment management charges, policyholder protection charges and an expected shareholder charge payable to Nordben.
The expected shareholder charge is:
The above costs are itemised in the table below:
Charge |
Charging Basis |
---|---|
Investment management charges |
0.085% per annum of funds under management (per Fund) subject to a minimum amount of NOK 150,000 |
Charges in respect of the Guernsey Policyholder Protection regime |
GBP 25,000 spread across all Funds |
Expected shareholder charge* |
0.75% per annum for 2021 increasing by 0.05% per annum until 1% |
*The expected shareholder charge is only taken in a given year after Nordben consults with the Appointed Actuary. This charge taken may be lower than that described above. If the charge taken from a Fund in a given year is lower than the charge that Nordben wishes to take in that year, we will (if possible) in subsequent years recoup the monetary shortfall. |
Nordben continues to reserve the right to increase the expected shareholder charge by more than the percentages described above. Future announcements regarding any increase to the expected shareholder charge will be published on this website.
In addition, there may be direct charges which apply to your Policy (such as a charge applied to premiums paid; or charges for optional death/disability benefits). Please contact us to discuss any direct policy charges.
The Flex Plan retirement savings product features a bonus which is credited to the accumulated account (Policy) value each year. The bonus is paid from the Funds to your Policy.
The bonus is declared in December each year and credited to your Policy in the following January (e.g. declared in December 2017 and credited in January 2018).
The bonus cannot be lower than 0%.
The discretionary bonus for each Fund is declared annually and is available by clicking here.
The enhancement is currently set to ensure that policyholders receive a fair share of the Fund when they are paid their benefits.
The enhancement approach is determined by Nordben’s Board at its discretion upon taking account of the advice of the appointed actuary. The approach for setting the enhancement is not guaranteed and may be changed without notice. The primary concern when setting the enhancement is to ensure that the Funds are able to meet their liabilities.
The enhancement depends on market conditions at the time and so it can be volatile. In particular, the values of the assets are sensitive to changes in interest rates.
The enhancement for each Fund is declared monthly and is available by clicking here.
On surrender, death or retirement, you will receive the accumulated account value plus an enhancement (if one applies).
In order to determine bonuses, a financial review is carried out by Nordben’s appointed actuary each year. The financial review compares Nordben’s assets (the total value of our investments) with its liabilities (the total value of money we owe to our policyholders in respect of our insurance contracts) and considers Nordben’s financial position.
One part of the financial review is to determine the surplus (excess of assets over liabilities) in each currency Fund. The surplus mainly arises from investment returns, but may also come from profits and losses arising from payments (retirement, death or surrender) from the Fund.
Nordben’s Board determines how much of the surplus is to be distributed to policies as a bonus after due consideration of the advice from the appointed actuary and taking account of the Nordben’s bonus philosophy. Nordben operates a bonus smoothing policy so that investment returns are smoothed out over time, that the surplus is fairly distributed over time and that the cost of smoothing is broadly neutral over the longer term.
Bonuses are not necessarily expected to remain at constant levels, nor are they necessarily expected to reflect investment returns from year to year.
Once credited to your Policy, bonuses are guaranteed in full if held to retirement (so cannot be deducted from your Policy).