Frequently Asked Questions - Transamerica Life Canada

Transamerica Life Canada Segregated
Fund Lineup Changes
FAQ and related information
Transamerica regularly reviews the investment offerings in its segregated funds contracts. As a result of our
most recent review, we will be making changes to the segregated funds that will result in a streamlined and
more focused investment offering.
This document contains answers to frequently asked questions and specific information related to the 2013
Transamerica Life Canada (TLC) segregated fund changes.
Contents
TLC SEGREGATED FUND CHANGES AND INFORMATION................................................................................................................................................. 2
COMMISSIONS................................................................................................................................................................................................................... 5
POLICYHOLDER PACKAGE.................................................................................................................................................................................................. 7
OTHER DOCUMENTATION/REPORT/COMMUNICATION................................................................................................................................................... 8
TAX IMPLICATIONS FOR NON-REGISTERED POLICIES.................................................................................................................................................... 10
FEES.................................................................................................................................................................................................................................. 10
OPERATION NOTES........................................................................................................................................................................................................... 12
FOR ADVISOR USE ONLY

TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
TLC SEGREGATED FUND CHANGES AND INFORMATION
Which segregated fund contracts are affected by the changes
GROWSafe 94, GROWSafe 97, GROWSafe 99 and GROWSafe 2 (GS2).
Notes:
• GROWSafe 94, 97 and 99 are referred as GROWSafe (GS).
• On the client statement, the following wording is used to designate the contract type: GROWSafe 1 – GS194,
GROWSafe 1 – GS197, GROWSafe 1 – GS199 and GROWSafe 11 – GS299
• NN segregated fund contracts (e.g., IMS), TGIF, Five for Life (5FL), imaxxGIF, TIP, BIG, Seg 1(72), Agent’s Plan,
imaxx Fund mutual funds and the Alliance Segregated Fund (i.e., CI GIF, BPI Legacy I & II, TD GIF II,
AIC Segregated Funds) contracts are not affected by the changes.
What are the segregated fund changes, and do policyholders have any special rights
• For the Canadian Short-Term Bond Fund: fund name change only.
• For all other funds: termination of funds and automatic reallocation of assets to new funds. The new funds
are a class of certain segregated funds currently available in TGIF.
Funds changes at a glance:
Current fund lineup and fund names: funds that
will be terminated
New funds and fund names
Investment objective
1 Canadian Bond Fund Transamerica Canadian Bond GIF – GS/GS2 100/100 Similar
2 Canadian Balanced Fund Transamerica Canadian Balanced GIF – GS/GS2 100/100 Similar
3 Transamerica imaxx Canadian Fixed Pay Fund Transamerica Canadian Fixed Pay GIF – GS/GS2 100/100 Similar
4 Canadian Equity Fund Transamerica Canadian Equity GIF – GS/GS2 100/100 Similar
5 Global Growth Fund Transamerica Global Growth GIF – GS/GS2 100/100 Similar
6 International Balanced Fund Transamerica Canadian Balanced GIF – GS/GS2 100/100 Not similar
7 TOP Conservative GIP Transamerica Canadian Balanced GIF – GS/GS2 100/100 Not similar
8 TOP Balanced GIP Transamerica Canadian Balanced GIF – GS/GS2 100/100 Not similar
9 TOP Growth GIP Transamerica Global Growth GIF – GS/GS2 100/100 Not similar
10 U.S. Balanced Fund Transamerica Canadian Balanced GIF – GS/GS2 100/100 Not similar
11 U.S. Bond Fund Transamerica Canadian Bond GIF – GS/GS2 100/100 Not similar
12 U.S. Equity Fund Transamerica Canadian Equity GIF – GS/GS2 100/100 Not similar
Whether or not the new fund is deemed to have a similar investment objective to the corresponding terminating
fund, Transamerica will facilitate both transfers and withdrawals without fees and charges from terminating funds.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
TLC SEGREGATED FUND CHANGES AND INFORMATION
Why is Transamerica terminating these funds
Eliminating redundancy and potentially reducing costs to policyholders
Overall, with each fund termination, policyholders of a terminating fund will become part of a larger corresponding
new fund class. Policyholders of the funds will potentially benefit by having administrative and operating costs
spread across a greater pool of assets.
In addition, each new fund that is considered to have a substantially similar investment objective as its
corresponding terminating fund would generally attract the same type of policyholders. As a result, each such
fund termination will contribute towards reducing redundancy across the Transamerica segregated fund lineup,
while policyholders will continue to hold funds that reflect their risk and investment preferences.
What is the total number of segregated funds available by contract before and after the changes
Number of funds available GROWSafe 94, 97, 99 and GROWSafe 2
Prior to the fund change date 13
After the fund change date 6
What is the final list of funds that will be available after the fund change date
• Transamerica Canadian Short Term Bond GIF – GS/GS2 100/100
• Transamerica Canadian Bond GIF – GS/GS2 100/100
• Transamerica Canadian Balanced GIF – GS/GS2 100/100
• Transamerica Canadian Fixed Pay GIF – GS/GS2 100/100
• Transamerica Canadian Equity GIF – GS/GS2 100/100
• Transamerica Global Growth GIF – GS/GS2 100/100
When will the changes to the GROWSafe and GROWSafe 2 segregated fund investment lineup occur
Changes will occur on or about May 10, 2013.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
TLC SEGREGATED FUND CHANGES AND INFORMATION
Are the changes affecting any of the universal life (UL) contracts
No. GROWSafe and GROWSafe 2 segregated fund are not available in UL.
How did Transamerica choose the new funds
Various criteria were considered when choosing the new funds and determining which would correspond to each
of the terminating funds. Where the new fund has similar investment objectives, this was the main factor. Where
the investment objective was not similar, the main factor was the fund investment category, e.g., equity, balanced
or bond.
Will the management of the TOPs portfolio be moved to CI Investment Inc. (the same approach
as for the TOPs in TGIF, 5FL, imaxxGIF and TIP)
No. TOP Conservative GIP, TOP Balanced GIP and TOP Growth GIP in GROWSafe and GROWSafe 2 will be
terminated and reallocated to funds that are managed by Aegon Capital Management (ACM).
Will the new funds and the new name for the Canadian Short-Term Bond Fund have the same
fund name structure as the one that was introduced in fall 2012
Yes. In order to easily identify the funds that belong to the contract, the following fund name structure will be used:
Transamerica + fund name + GIF (Class 2* if applicable) + contract name + guarantee level.
*Class 2 introduced in November 2008 is being maintained.
Example:
Transamerica Canadian Bond GIF Class 2 – GS94 100/100
Transamerica Canadian Bond GIF Class 2 – GS97 100/100
Transamerica Canadian Bond GIF – GS99 100/100
Transamerica Canadian Bond GIF – GS2 100/100
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
COMMISSIONS
Do any of the changes affect commissions
Yes. Transamerica is stopping the special program that was put in place in April 2010 for GROWSafe 2 that doubled
DSC trailer compensation.
Why is Transamerica stopping the special program for the GROWSafe 2 DSC trailer compensation
In January 2012, we announced a shift in our strategic focus to our life insurance products. Offering a special
compensation program for one segregated fund contract is not in line with our strategic focus. The revised DSC
trailer that will be introduced on May 10, 2013, is in line with the DSC trailer that is currently being paid on some
other Transamerica segregated funds.
What is the change to the GROWSafe 2 DSC trailer commissions
Effective May 10, 2013, the commission structure will be as follows (regardless of the age of the DSC units):
0.375% of the fund value per year. Please review the document entitled “Addendum to Transamerica Compensation
Guide for Advisors” (DCC1376 3/13) for details.
DSC
No load
Trailer commissions
GROWSafe 2 DSC trailer for GROWSafe 2 , effective May 10, 2013:
0.375% of the fund value per year
No changes
GROWSafe 94, 97, 99 No changes No changes
Deposit commissions
GROWSafe 94, 97, 99 and GROWSafe 2 No changes No changes
Notes:
• A trailer is also known as a service fee.
• No load is also known as Low Load Sales Charges (LSC), and in some contracts is also referred to as
Fee Category B.
• Deferred Sales Charges (DSC), in some contracts, are also referred to as Fee Category A.
• GROWSafe 94, 97 and 99 deposit commission and trailers: there is no change in the commission structure.
The commission structure will follow the current commission structure.
• GROWSafe 2 DSC deposit commission, no load deposit commission and no load trailers: there is no change
in the commission structure. The commission structure will follow the current commission structure.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
COMMISSIONS
Does the new trailer apply to all DSC funds
Yes. The new GROWSafe 2 DSC trailer commission is applicable to all funds available under the GROWSafe 2 contract.
If the trailer commission is paid on a policy anniversary basis, and the policy anniversary date
falls after May 10, 2013, will an exception be allowed
No. The new GROWSafe 2 DSC trailer commission is effective May 10, 2013. There are no exceptions. The trailer
that is paid is determined by the holdings on the anniversary date only.
If the trailer commission is on a calendar-quarter basis, will the new commission be applicable at
the end of June 2013
Yes. The new GROWSafe 2 DSC trailer is effective on May 10, 2013. and the trailer is prorated daily.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
POLICYHOLDER PACKAGE
Will the policyholder package be sent to all affected policyholders
Yes. Policyholders need to be informed of the changes that are happening to their segregated fund lineup.
When will policyholders be notified of the changes
Yes. Policyholders packages need will to be mailed informed out of beginning the changes on March that are 12, happening 2013. to their segregated fund lineup.
What is included in the policyholder package
Yes. The package Policyholders includes need to be informed of the changes that are happening to their segregated fund lineup.
• policyholder letter
• Schedule A: a detailed list of changes affecting each contract
• Schedule B: information on policyholders’ options
Is the policyholder package the same for all segregated fund product/contracts
Yes. No; however, Policyholders most need packages to be are informed the same. of the Please changes refer that to the are following happening table. to their segregated fund lineup.
GROWSafe 94, 97, 99 and GROWSafe 2
Policyholder letter
Schedule A
Schedule B (options)
The letter is the same for all contracts.
Schedule A is not the same for all contracts. It is based on the contract.
There are four versions of schedule A: GS94, GS97, GS99 and GS2
Schedule B is the same for all contracts.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
POLICYHOLDER PACKAGE
Where can I find an electronic sample of the client communications
Yes. Please Policyholders visit www.transamerica.ca need to be informed to find of the a copy changes of the that policyholder are happening communications.
to their segregated fund lineup.
What are the policyholders required to do
Yes. Policyholders should need read to their be informed package of carefully the changes and review that are their happening options, to as their detailed segregated in Schedule fund B, lineup. with
their advisor.
OTHER DOCUMENTATION/REPORT/COMMUNICATION
Where can I find the investment objectives of the funds that will be available after the fund
change date
Please visit www.transamerica.ca for a list of available funds and their investment objectives.
Where can I find an electronic copy of the fund code mapping for the terminated funds
(a list of the funds that will be terminated and where the assets will be reallocated)
Please visit www.transamerica.ca to review Schedule A for each contract. As noted above, there are four versions
of Schedule A.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
OTHER DOCUMENTATION/REPORT/COMMUNICATION
Can I obtain a list of my clients who are affected by these changes
Yes. No specific Policyholders list is available. need to be To obtain informed more of the information, changes that please are use happening FUNDcom to their or webCAPPOW. segregated fund On webCAPPOW,
lineup.
you will be able to see the fund family your clients are invested in, and this will indicate the changes to which your
client’s policies will be subject.
Which Fund Fact documents are being updated or created
Yes. • At Policyholders the time of the need policyholder to be informed mailing, of the following changes that Fund are Fact happening pages will to be their created: segregated fund lineup.
o Transamerica Canadian Bond GIF – GS/GS2 100/100
o Transamerica Canadian Balanced GIF – GS/GS2 100/100
o Transamerica Canadian Fixed Pay GIF – GS/GS2 100/100
o Transamerica Canadian Equity GIF – GS/GS2 100/100
o Transamerica Global Growth GIF – GS/GS2 100/100
• At the time of the fund change date, the following Fund Fact document will be updated:
o Transamerica Canadian Short Term Bond GIF – GS/GS2 100/100
Will there be a financial statement for the funds that are being terminated
Fund financial statements are not required for segregated funds that are terminated prior to the financial statement
date. Financial statements could still be produced, but it would be at Transamerica’s discretion.
Notes:
• Separate financial statements for GROWSafe and GROWSafe 2 will no longer exist. The financial statement
that will now be produced will combine segregated funds under the following contracts: TGIF, Five for Life (5FL),
imaxxGIF, TIP, BIG, Seg 1(72), Agent’s Plan, GROWSafe and GROWSafe 2 .
• For the December 2012 financial statement, the Canadian Short-Term Bond Fund in GS/GS2 will be listed under
the financial statement for TGIF, 5FL, TIP, imaxxGIF, BIG, Seg 1(72) and Agent’s Plan.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
TAX IMPLICATIONS FOR NON-REGISTERED POLICIES
Are there any tax impacts for policyholders as a result of these fund changes
Yes, for the following change: termination of a fund and the automatic reallocation of assets to a new fund.
The automatic reallocation of fund units and transfers and/or withdrawals from non-registered policies is a taxable
event, meaning a capital gain or loss will be realized by the policyholder. These will be reported on the 2013 T3 slip
(or T3/R16 slip for Quebec residents).
The disposition of the underlying funds will create fund capital gains or losses that will be reported to
non-registered policyholders as a notional distribution. These will be reported on the 2013 T3 slip (or T3/R16
slip for Quebec residents).
Notes:
• Segregated fund termination and reallocation cannot be done on a tax-deferred basis.
• There is no tax impact for registered policyholders of the terminating funds as a result of these fund changes.
• The Canadian Short-Term Bond Fund name change is not a taxable event.
FEES
Policyholder’s redemption fees
Can the policyholder choose to redeem prior to the fund change date If yes, are there any
redemption fees for the policyholders
Yes, policyholders can choose to redeem prior to the fund change date.
• For the funds that are being terminated, no redemption fees (e.g., DSC) will be charged for withdrawals made
between March 12, 2013, and May 10, 2013. This applies only to fund units acquired prior to March 12, 2013,
or units acquired pursuant to an existing PAC agreement until May 10, 2013.
• Redemption fees will be charged on all units surrendered from the Canadian Short-Term Bond Fund and
on units surrendered from any other fund where there was a transfer from this fund after the notice of
fund changes.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
FEES
Fund fees
Is there an impact on management fees and MERs
Type of changes
Termination of funds and the automatic
reallocation of assets to new funds
Fund name change (Canadian Short-Term Bond Fund)
Is there an impact on management fees and estimated MERs
See details in the table below. Estimated MERs for the new funds can be found on the
new Fund Fact pages.
No impact. Fees for the continuing fund will stay as they are.
Details are as follows:
Current fund lineup and fund names:
funds that will be terminated
New funds and fund names
Management fees and estimated MERs
of the new fund
1 Canadian Bond Fund Transamerica Canadian Bond GIF – GS/GS2 100/100 Same fees as the fund that is being
terminated
2 Canadian Balanced Fund Transamerica Canadian Balanced GIF – GS/GS2 100/100 Same fees as the fund that is being
terminated
3 Transamerica Imaxx Canadian Fixed Pay Transamerica Canadian Fixed Pay GIF – GS/GS2 100/100 Same fees as the fund that is being
terminated
4 Canadian Equity Fund Transamerica Canadian Equity GIF – GS/GS2 100/100 Same fees as the fund that is being
terminated
5 Global Growth Fund Transamerica Global Growth GIF – GS/GS2 100/100 Same fees as the fund that is being
terminated
6 International Balanced Fund Transamerica Canadian Balanced GIF – GS/GS2 100/100 Different. The fees will be the ones for
the new Transamerica Canadian Balanced
7 U.S. Balanced Fund
GIF – GS/GS2 100/100
8 TOP Conservative GIP
9 TOP Balanced GIP
10 TOP Growth GIP Transamerica Global Growth GIF – GS/GS2 100/100 Different. The fees will be the ones for the
new Transamerica Global Growth GIF –
GS/GS2 100/100
11 U.S. Bond Fund Transamerica Canadian Bond GIF – GS/GS2 100/100 Different. The fees will be the ones for the
new Transamerica Canadian Bond GIF –
GS/GS2 100/100
12 U.S. Equity Fund Transamerica Canadian Equity GIF – GS/GS2 100/100 Different. The fees will be the ones for the
new Transamerica Canadian Equity GIF –
GS/GS2 100/100
For information on the estimated MERs (with taxes) for the new funds, please review the Fund Fact pages on the
Transamerica website.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
OPERATION NOTES
Will the change impact fund codes
Yes. New funds will have new fund codes. Please visit www.transamerica.ca fund changes to review Schedule A
for each contract. There are four versions of Schedule A.
The Canadian Short Term Bond Fund will keep its current fund codes.
Will a confirmation of the transaction be mailed out
Yes, a transaction confirmation will be mailed to policyholders for both automatic termination and reallocation, as well
as for requested transactions.
How will the termination of a fund and the automatic reallocation of assets to a new fund be displayed
on the policyholder’s December 31, 2013, statement and on the confirmation of the transaction
The transaction will be displayed as a regular fund switch.
Are there any restrictions related to FundSERV or wire order transactions
Yes, restrictions similar to those on direct (paper) trades (e.g., closed to deposits, withdrawals, fund transfers) are
applicable to FundSERV trades.
Transamerica will not accept any FundSERV wire trades after 4:00 p.m. ET on the Tuesday preceding the fund
termination. For cut-off dates for direct trades, please refer to Schedule B. Schedule B can be found on the
Transamerica website at www.transamerica.ca fund changes
What is the administrative procedure for order submissions
A summary of the changes will be sent to the distributor’s back office outlining the changes and providing contact
information.
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TRANSAMERICA LIFE CANADA SEGREGATED FUND LINEUP CHANGES
OPERATION NOTES
If there is an assignment on the terminated fund, will it be transferred to the new fund
A loan assignment will remain on the policy until discharged by the loan provider, regardless of the fund changes.
Any requests to redeem without sale charges on a loan policy will require permission from the loan provider.
Note: Loan assignments are at the policy level (and not at the fund level). Transamerica will inform the loan
providers of the fund changes.
Any amount that is allocated to a segregated fund is invested at the risk of the contract holder(s) and may
increase or decrease in value.
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