With ongoing market instability, the need to plan ahead is more important than ever, and with the MetLife Retirement Portfolio, you’re in a great position to be able to help your clients dive into retirement planning early. Offering access to a range of guarantee levels, the Retirement Portfolio allows your clients to secure either a guaranteed income for life with our Secure Income Option, a guaranteed return of initial capital at the end of the term with our Secure Capital Option, or to choose a level of investment protection through our Protected Growth Funds.
The MetLife Retirement Portfolio is a personal pension which adds a new dimension to retirement planning.
To make it suitable for your client's specific needs; it also offers a range of additional features which can be adapted to suit an individual's unique situation.
If you have clients who are asking the following questions the Retirement Portfolio could be the right solution for them:
- What if I’m not yet ready to retire, but want to make sure my pension fund is working as hard as possible?
- What can I do to protect my retirement if the market falls again?
- How can I make my retirement income last throughout my retirement?
- How do I make sure my retirement fund doesn’t lose out when the stock market starts to recover?
The Retirement Portfolio can provide the peace of mind that annuities provide, coupled with the advantages of income drawdown.
How It Works
Retirement Portfolio - How it Works
With our capital guarantee your clients can benefit from the peace of mind that the value of their pension fund is protected against potential market downturns. We call this the Secure Capital Option.
If your clients choose this option they can secure their initial investment and, providing no withdrawals are taken, they will never get back less than they originally invested at the end of the term. We call this guaranteed amount their Secure Capital Value.
Along with securing your client’s pension, the Retirement Portfolio also allows your client’s investment the chance to grow in a secure environment.
Each year we review your client’s investment. We refer to this as a Secure Capital Review. At this time, we will compare the Secure Capital Value with the actual fund value. If the fund value has grown beyond the Secure Capital Value we will lock-in this new higher figure.
If however the market has dropped and the fund value has fallen, your client’s Secure Capital Value will remain unchanged – it’s guaranteed.
The Secure Capital Option is only available when investing in the MetLife Managed Wealth Portfolios.
The Secure Capital Option also offers a guaranteed minimum death benefit, so your clients can have the added peace of mind that should they die, their beneficiaries will also benefit from the safety net of our guarantees.
If your clients are looking for an income in retirement our Income Guarantee could be for them. We call this the Secure Income Option and it guarantees an income for life, regardless of market conditions. If your clients do not want to take their income straight away they can choose to defer this until a later date.
The guaranteed income for life* is based on the amount your client invests and their age at the time they choose to take income. The initial investment sets what we call the Secure Income Base. Guaranteed income can be paid on a single life or joint life. If income on a joint life basis is selected, the age-related income percentages, referred to as Guaranteed Income Percentages, will be 0.25% lower and based on the younger life.
The table below shows the Guaranteed Income Percentages that are used to calculate your client’s income.
* Please note, the Secure Income Option offers a guaranteed income for life, the capital investment is not guaranteed.
Guaranteed future income
If your client does not need their income immediately they can decide to take it in the future. This is particularly useful if they want to know what the minimum level of income would be when they retire but are not sure when this will be.
By deferring this decision your client will benefit from higher Guaranteed Income Percentages and for each full year they defer taking income we will also increase their Secure Income Base by 4.25% of the initial value – guaranteed.
What are Secure Income Reviews?
Your client’s can also take advantage of any market growth with our annual Secure Income Reviews. These lock-in any gains made to their Secure Income Base.
The Secure Income Reviews work in a similar way to the Secure Capital Reviews. If the fund value grows above the Secure Income Base, we will lock-in this new higher figure.
If the market has fallen, the Secure Income Base won’t be impacted – it’s guaranteed. And, if your client has delayed taking an income, their initial Secure Income Base will still grow by 4.25% for each full year income is deferred.
The graph below illustrates how the Secure Income Reviews work. Each year, on the anniversary of the initial investment, we will undertake a Secure Income Review. If at this review the market has grown, so too will the Secure Income Base. If however the market has fallen, but your client hasn’t yet started to draw an income, their Secure Income Base will still grow by 4.25%.Below shows how Secure Income Reviews work:
The Secure Income Option also offers a guaranteed minimum death benefit, so your clients can have the added peace of mind that should they die their beneficiaries will also benefit from the safety net of our guarantees.
As the MetLife Retirement Portfolio has a number of features including consolidation and income options it can suit a number of clients both at an early stage of their retirement planning or at the point of retirement. Examples include:
Clients who are at the age where they have built up significant pension funds and wish to protect themselves against market falls.
Client’s who are approaching retirement and don’t want to take chances with their fund or their future income.
Client’s who are retiring and want the flexibility of income drawdown but the certainty of a fixed annuity.
Client’s who have taken income drawdown but wish to protect themselves against market falls and the impact this would have on their income.
The MetLife Retirement Portfolio also includes a number of investment and guarantee options which can suit all types of investors from those seeking active investments to the risk adverse.
Clients might come into the product at an early age and make use of the various options as their priorities change and they move through the various stages of the retirement planning cycle. Or, they might come into the product at a late stage to make use of income drawdown for example.
Or, anywhere in between — it’s that flexible.
You and your clients will decide how to use the MetLife Retirement Portfolio to its best ability.
In preparation for the introduction of the Retail Distribution Review which comes into effect on 31 December 2012, we have the following remuneration options:
(Available for advice provided before 31 December 2012)
- Initial commission by establishment charge or reduced allocation
- Trail commission
Please note, whilst commission payments will only be available for advice provided before 31 December 2012, any trail commission established prior to this date will continue to be paid unless otherwise notified.
2. Adviser remuneration
(Available for advice given from 31 December 2012)
- Initial Adviser Charge
- Ongoing Adviser Charge
- Ad-hoc Adviser Charge
Please go to the Adviser Charging section of our Retail Distribution Review page for further information.
Clients can switch out of their guarantee at their Secure Capital or Secure Income Review, or up to 30 days after, although switching back is only allowed after six months. Clients can transfer to another provider or purchase an annuity at any time, but may be subject to any outstanding establishment charges.