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At the end of each year policyholders’ PPS Profit-Share Account, comprising the Apportionment Accounts and the Special Benefit
Accounts, are allocated a share of 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 receive a lump sum payment 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
.
The PPS Profit-Share Account represents an allocation of surplus and investment returns only. This account does not belong to the
policyholders, or their nominated beneficiaries (or become a ‘vested benefit’) until retirement, death or exit. 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 balance 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, and it is paid to the policyholders’ beneficiaries or their estates on death. For all policyholders aged 66 or older, the full
balance of the PPS Profit-Share Account is available through the Vested Profit-Share Account to 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.
ALLOCATION TO SPECIAL BENEFIT ACCOUNTS
The following investment allocations (Note 1) for 2017 were made to the Special BenefitAccounts:
2017
2016
PPS Insurance
R million
R million
PPS BEE investment income gains
11.0
5.7
Investment income and gains
2 214.8
1 255.2
Total allocated
2 225.8
1 260.9
2017
2016
PPS Namibia
N$ million
N$ million
Total allocated
99.6
26.1
Note 1 – Investment return allocated to policyholders’ Special BenefitAccounts as a percentage of the PPS Profit-Share Account at the beginning of the year.
INVESTMENT RETURNS AND PROFIT
ALLOCATION TO POLICYHOLDERS’
PPS PROFIT-SHARE ACCOUNT
for the year ended
31 December 2017
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