Postal PPR Series D

Product description: This is a life insurance product that is designed to ensure the progressive constitution of savings to supplement your retirement benefits. It offers guaranteed returns, which could be augmented by the eventual distribution of dividends, and excellent tax benefits.

Key concept: The Postal PPR plan is an investment solution that allows you to plan your savings in a flexible manner while availing of attractive rates of return and tax benefits so that when you retire you will have constituted an individual supplement for your retirement benefits, thus safeguarding your quality of life in the future.

Managers: Fidelidade-Mundial Insurance Company.

Date the plan was launched: 8 August 2006.  

Period: The client can choose the period for the investment. The plan can only end after the client reaches the age of 60 and the contract must have commenced at least five years and 1 day ago.

 
Conditions: The individual must be between 18 and 80 years of age (inclusive).

Subscription: The client can define an investment plan for the amounts and frequencies of deposits according to their individual objectives and capacity, subject to the following minimum values:

Clients who define an investment plan can choose to automatically update the value of the periodical premiums, which can be raised by a fixed amount.

Returns: The Postal PPR plan offers two kinds of returns:
Guaranteed fixed component: 2,75% (throughout the validity of the contract).
              
Variable component:
In addition, annual dividends might be attributed each year, which correspond to a positive balance of the Annual Results of this product.
This balance is equal to a minimum of 90% of the net financial returns obtained during the year by means of the application of the assets of this product’s Autonomous Investment Fund, less the minimum guaranteed returns paid, the annual management fees for the Autonomous Fund and any eventual negative balance from the results of the preceding year.

Fees:
Subscription fee: 0,5% will be deducted from the capital deposited.
Penalties for early withdrawals: In the event that the capital is withdrawn outside the situations envisaged by existing legislation and the contract, a penalty of 2% will be deducted from the sum that will be refunded.
Management fee: A maximum of 1.25% of the average value of the mathematical provisions for the year in question will be deducted from the annual returns obtained.
Transfer fee: 2,0% of the sum to be transferred.

Beneficiaries: If the insured party is alive at the end of the contract or in cases of early encashment, the insured party is the beneficiary.
If the insured party dies while the contract is in effect, the following individuals will be considered to be beneficiaries:

• O The surviving spouse of the insured party and other legitimate heirs, unless another beneficiary has been designated or other solutions are contained in the insured party’s will, without prejudice to the intangibility of the legitimate solution.
• If the spouse of the insured party is not alive, if the PPR Series D product was a common asset of the couple, the surviving spouse and other heirs will inherit the share pertaining to the deceased.

The representative assets of the mathematical provisions of the insurance contracts of the Postal PPR Series D product will be invested by means of an Autonomous Fund.
The assets of the Fund can be constituted by securities, participation in collective instruments, short term debt instruments, bank deposits or other monetary products. The assets of the Fund can be constituted by land, buildings and credit derived from mortgages.
These assets are subject to the limits established by governmental decrees.

Deposits:

While the contract is in effect, the insurer can refuse, for the future:
- The payment of non-periodical premiums; an increase in the value of periodical premiums; the resumption of the payment of periodical premiums; the payment of periodical premiums whenever the 10 year swap interest rates for the Euro are fixed below 3.95%.
Sums deposited during the last five years :
- If the existing tax legislation remains unchanged, sums deposited during the last five years of the validity of the contract cannot be deducted from your tax returns. In such cases the insurer will thus not issue the respective tax declaration.
- Moreover, when the end of the contract is less than five years away and at least half the period of the contract’s validity has elapsed, no deposits, periodical or otherwise, will be accepted whenever the value of deposits paid during the first half of the contract are, or become, less than 35% of the total deposits made.

Limits for partial refunds: In the event that partial refunds are made of sums invested in the Postal PPR Series D product, the respective value reimbursed as well as the remaining value of the Guaranteed Capital, after the refund, cannot be less than €500. These limits are not applicable in cases where the share of a deceased individual is refunded, in situations where the spouse of the insured party dies and the PPR was a common asset of the couple.

Transfers: From the Postal PPR Series D product to another managing entity:
- A penalty of 2% of the value to be transferred will be applied per transfer.
- In the event of partial transfers, the respective sum transferred as well as the remaining value of the guaranteed capital, after the transfer, cannot be less than €250.
Payments of the capital upon maturity: At the end of the contract the client can choose to receive the accumulated capital as a lump sum (in one payment), as lifelong income or as a mixture of these two solutions.

Situations in which refunds are allowed: You can obtain total or partial reimbursements of the sums invested in the Postal PPR plan in the following situations:
- Retirement on account of old age or at an age equal to or over 60 years in the case of the insured party or spouse when the PPR plan is a common asset of the couple.

- Long term unemployment (over 1 year), permanent professional disability or serious illness in the case of the insured party or any member of the family unit;
- Death of the insured party or spouse when the PPR plan was a common asset of the couple.
If refunds are made in the circumstances described above: (1) in the event of the death of the spouse of the insured party and (2) when the person who is applying for the refund is in the respective situation of unemployment, disability or serious illness at the date of each deposit, the refunds can only be derived from deposits invested at least 5 years ago counting from the date the sums were deposited.
However, when the facility of tax benefits has not been used, a total refund can be obtained if the amount deposited during the first half of the validity of the contract represents at least 35% of all sums deposited and if 5 years have elapsed after the date of the first deposit.
It is also possible to obtain a total or partial refund of the sums invested even outside the conditions described above, however, a contracted penalty of up to a maximum value of 2% will be applied to the sums withdrawn and tax penalties will also be applicable on the amount.

Conditions for obtaining refunds and the respective proof thereof

Retirement on account of old age

Individuals who are receiving old age pensions under any provisions of social protection legislation, i.e. social security or other plans for state employees, including situations where the retirement age for receiving pensions has been lowered – proved by means of the presentation of a certificate or an authenticated declaration corroborating the status of being a pensioner issued by the entity that is responsible for processing the pension.

Long term unemployment

Dependent or independent workers who, although available for work, have been unemployed for over 12 months and are enrolled in the respective Employment Centres – duly proved by a certificate issued by the Employment Centre where the individual is enrolled.

Permanent professional disability

Individuals in one of the following situations:

Who are receiving disability pensions under any provisions of social protection legislation, i.e. social security or other plans for state employees;
Who are receiving pensions on account of professional accidents or illnesses, as long as the degree of disability is not less than 60%;
Individuals who are not receiving such pensions but are permanently incapacitated due to an act by a third party that prevents them from earning more than a third of the remuneration they would normally receive while carrying out their professional activities.

The situations mentioned above are to be corroborated by a certificate or an authenticated declaration confirming pensioner status and, if required, stating the respective degree of disability, issued by the organization responsible for processing the pension or they can be corroborated by an official document which mentions the respective disability or a certificate issued by specialist panels designated by the ISP.

Serious illness

Individuals who are the victims of illnesses which, owing to the characteristics of the illness and the individual, can endanger the individual’s life and/or require lengthy treatment and/or cause significant residual incapacity – duly proved by a medical certificate corroborating the situation of illness or disease, issued by the competent authorities of the health system or subsystem used by the individual.

Tax regulations

Tax deductions
Sums invested in 2006 in the Postal PPR Series D plan afford tax benefits in the form of deductions from taxable income up to a maximum limit that varies according to the age of the subscriber, according to the following table:

Reimbursements can only be derived from sums deposited at least 5 years ago counting from the date when they were deposited and in cases envisaged by prevailing legislation. An exception to this rule is made only in cases where the insured party dies.
In the event that the PPR is refunded outside these situations, the sums deducted from taxable income must be declared, augmented by 10% for each year that has elapsed since the date of the respective deduction up to the date of the refund.

Taxation of returns
Returns obtained by means of PPR products are taxed only when sums are withdrawn or refunded. When the reimbursement takes place in the form of capital, in the situations envisaged by prevailing legislation, even in the case of death, only 2/5 of the returns are taxed at a rate of 20%, which translates into the application of an effective rate of 8%.
Thus, the returns obtained are partially exempt from income tax. If the reimbursement of the Postal PPR product occurs in the form of an income, this will be taxed according to Category H of the Income Tax Code (income earned from pensions).

This regime is only applicable in situations of reimbursements that are covered by prevailing legislation.
This taxation regime for returns obtained by means of PPR products is also applicable to deposits made less than 5 years ago, as long as the 1st deposit was made over 5 years ago and at least 35% of all deposits were made during the first half of the validity of the contract, in the following cases:

- Retirement on account of old age or at an age equal to or over 60 years in the case of the insured party or spouse when the PPR plan is a common asset of the couple.

- Long term unemployment, permanent professional disability or serious illness in the case of the insured party or any member of the family unit, when the person due to whose condition the request for the refund is made is in the respective situation of unemployment, disability or serious illness at the date of each deposit.

Outside these situations, an identical rate of taxation will be applied as in the case of life insurance products: 20% during the first five years; 16% between the fifth year and the eighth year; 8% after the eighth year, as long as at least 35% of all deposits were made during the first half of the validity of the contract.

Exemption from Stamp Duties
In the event of the death of the insured party or spouse (when the Postal PPR/E product is a common asset of the couple), the sums reimbursed in favour of the beneficiaries are not subject to stamp duties.

Top

In case of doubts, consult our list of FAQs: FAQ Retirement Savings Plans - PPR