2019 Integrated Report

PPS INTEGRATED REPORT 2019 | 89 At the end of each year policyholders’ PPS Profit-Share Account, comprising the Apportionment Accounts and the Special Benefit Accounts, are allocated the profit or loss, net of movements in insurance policy liabilities earned over that year. The PPS Profit-Share Account accumulates from year to year until a policyholder reaches retirement age. On retirement, death or exit, policyholders can access an amount based on the balance accumulated in their PPS Profit-Share Account at that time. This is over and above the cover enjoyed by them as policyholders . This represents a valuable pool of retirement assets for members, particularly retiring members. The PPS Profit-Share Account represents an allocation of surplus and investment returns only. This account vests upon retirement, death or exit, and is then payable. The total assets backing the PPS Profit-Share Account belong to PPS Insurance or PPS Namibia at all times. The investment returns or losses and net operating income allocated each year may be positive or negative, depending on investment return as well as the operating experience of PPS Insurance and/or PPS Namibia. Therefore, the PPS Profit-Share Account may increase or decrease in any year. Possible variations in the PPS Profit-Share Account are set out in the accounting policies and notes to these financial statements. No guarantees can be given by PPS Insurance or PPS Namibia that the allocations of operating results or investment returns will always be positive, or that the PPS Profit-Share Account will not reduce in any year. The net operating income is allocated with reference to the qualifying products a policyholder holds and in accordance with the allocation rules for the specific products held. The investment returns are allocated in proportion to the size of the policyholders’ PPS Profit-Share Account. For all policyholders from age 60 to 65, the full value of the PPS Profit-Share Account is available through the Vested Profit-Share Account to such policyholders on termination of cover or resignation, subject to the vesting rules as contained in the policy document. On death of a member, at any age, the PPS Profit-Share Account is paid to the policyholders’ beneficiaries or their estates. For all policyholders aged 66 or older, the fair value of the PPS Profit-Share Account becomes available through the Vested Profit-Share Account, for inclusion in financial plans of such policyholders, and it is paid to the policyholders’ beneficiaries or their estates on death. On surrender of a policy prior to the age of 60, policyholders are entitled to receive a lump sum termination payment determined as a proportion of the PPS Profit-Share Account at the time subject to a discount, if the exit is before retirement age. TOTAL ALLOCATIONS TO PPS PROFIT-SHARE ACCOUNTS 2019 2018 PPS Insurance R'000 R'000 Allocation to / (from) Special Benefit Accounts 2 625 000 (745 019) Allocation to Apportionment Accounts 1 415 182 1 372 696 Total allocations to PPS Profit-Share Accounts 4 040 182 627 677 2019 2018 PPS Namibia N$'000 N$'000 Allocation to / (from) Special Benefit Accounts 121 703 (76 098) Allocation to Apportionment Accounts 84 205 82 994 Total allocations to PPS Profit-Share Accounts 205 908 6 896 INVESTMENT RETURNS AND PROFIT ALLOCATION TO POLICYHOLDERS’ PPS PROFIT-SHARE ACCOUNT for the year ended 31 December 2019