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Kharafi National Retirement Savings

Plan Member Booklet

Contents
Page
Foreword

1. What is the Plan?

2. Participation

3. Contributions

4. Account Information

5. Investments

6. Benefit Entitlements

10

7. Other Information

14

8. Plan Contact Information

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Foreword
Kharafi National has designed its Retirement Savings Plan (the Plan) to assist its Employees in
long term saving for the future. Kharafi wishes to ensure that, by becoming a Plan member, you
have the opportunity to make a commitment to your and your familys long-term financial security.
This Plan Summary has been prepared to explain the major provisions of the Plan, and to try to
answer some of the questions those Employees who participate in the Plan might have.
The Plan was established under a Trust Deed and Rules in Bermuda by the Bermuda Trust
Company Limited, a member of the HSBC group. The Plan Trustee was transferred to RBC cees
Trustee Limited in Jersey, a subsidiary of RBC in November 2009. The administration service for
the Plan is provided by RBC cees International Limited in Edinburgh, UK.
Although care has been taken in the preparation of this Plan Summary, it is not the official text of
the Plan. In the event of any inconsistency between the information in this summary and in the
Plan itself, or to the degree the Plan contains more complete or detailed information or rules, the
provisions of the Plan will prevail.

1. What is the plan?


The Plan is designed:
1.

To encourage you to save towards your future by allowing you to make voluntary
contributions into the Plan known as Employee Contributions.

2.

Whereby, if an Employee makes contributions to the plan, Kharafi National will also make
contributions into the Plan. These amounts are known as Employer Contributions.

3.

To enable Participants to gain access to international investment opportunities which they


may not be able to gain access to outside of the Plan.

2. Participation
Who may participate in the Plan?
Any Employee who is not a manual worker of Kharafi National and whose contract of
employment gives them the right to join the Plan, shall be eligible for membership of the Plan.
When will I become a Participant?
You will become a Participant in the Plan after you submit an enrolment form and it has been
accepted by your Employer. If the enrolment form is submitted before the 15th of the month,
you will become a participant in the same month. If the form is submitted on or after the 15th,
then you will become a participant in the following month.
The Employer shall have absolute discretion to declare that a Participant shall cease to be
eligible and any declaration shall take effect in accordance with its terms.
How do I become a Participant?
Your local Kharafi HR representative will conduct the basic enrolment process.
As part of this process, you will be sent a unique user name and password by RBC cees so you
can check your basic enrolment details and make your investment choices for future
contributions. You shall receive your user name in a packet envelope and shall receive your
password via your Kharafi National email.
Is participation in the Plan mandatory?
Yes, participation in the Plan is mandatory according to the below table:
Employee Type/
Location

Hire or Join Date on or


after

Transfer Date on or after

Non-Manual Regular /
All Areas excluding
Egypt

21-Oct-2009

16-Jan-2010

Non-Manual Project
Specific / All Areas
excluding Egypt

01-Jan-2010

16-Jan-2010

Non-Manual Regular
and NMPS /
Egypt only

17-Feb-2010

17-Feb-2010

If your hire, join, or transfer date is before the dates in the above table, participation is
voluntary.

3. Contributions
How do the contributions work?
There are two types of Contributions that may be paid into the Plan:
Contribution type

Percentage

Basis of contribution

Employee

Max. 50%

Basic Salary

Employer

Max. 5%

Matches Employee Contribution

Employee contributions
Employee Contributions are paid into the Plan on a monthly basis by deductions from payroll.
Employees will be permitted to contribute up to a maximum of 50% of monthly basic
contractual salary each month.
Basic contractual salary for this purpose generally means your regular salary or wages
excluding any additional allowances.
Employer contributions
The Employer shall pay Employer Contributions into the Plan on a monthly basis for all
Employees who are participating in the Plan up to a maximum of 5%. This rate shall be based
on the Employee Contribution rate selected by the Employee and these contributions held in
the Employer Account.
For example:
Employee
Employee
Employee
Employee
Employee
Employee

contributes
contributes
contributes
contributes
contributes
contributes

1%
2%
3%
4%
5%
6% to 50%

=
=
=
=
=
=

Kharafi
Kharafi
Kharafi
Kharafi
Kharafi
Kharafi

National
National
National
National
National
National

contributes
contributes
contributes
contributes
contributes
contributes

1%
2%
3%
4%
5%
5%

To benefit from Employer contributions the Employee must contribute to the plan. For
Example;
An employees monthly basic contractual salary is 500kd and he contributes 5%. His
monthly retirement contribution will be 25kd. In return the Company will also contribute
25kd on his behalf giving a total of 50kd that will be transferred to his retirement account
every month.
May I change the levels of contributions?
Employees may increase or decrease their employee contribution percentage rate 4 times a year;
once each quarter in the following months:

January, April, July and October.


The preferred method to change the contribution rate is by employees logging in to their
retirement account online via the RBC cees Online Website and submitting a request to
change their contribution rate.
Changes submitted using the RSP Enrolment Form will also be accepted.
Request made online or through the enrolment form must be done by the 14th of the
designated months in order to be effective in the present month.

For example, if an employee makes a request online to change his contribution rate on or by
14th January then the new rate will be effective from Januarys salary. If an employee makes a
request online on or after 15th January then the new rate will be effective starting from Aprils
salary since it is the next designated month allowed for changes.
The same deadline applies for submitting changes using the enrolment form.
Upon Management discretion, contribution changes may be accepted at other times in certain
situations.
Can I contribute while on leave?
Employees going on leave will have their retirement contributions deducted in advance.
Maximum advance contributions will be deducted for 3 months.
If an employee goes on a leave longer than 3 months, he shall resume participation in the
plan upon his return from leave.

4. Account Information
Is information about the Plan available online?
Yes, at www.rbccees.com.
When you have enrolled into the Plan, you will be sent your unique user name and password
so you can log into your account where you can view:

An overview of your Plans value in any currency you choose

Your current fund holdings at cost and current value

Full contribution history

Your current fund selection for contributions

A history of any switches you have performed

Your personal details

Plan documents

Latest fund information for available funds

Your annual statement

What transactions can I perform online?


In addition to the view only functions above, you can also perform the following actions online:

Investment Preference - Direct the investment of future contributions.

Switch - Direct transactions on existing investments.

Enrolment - Change your Employee contribution rate in the plan.

Personal Details - Update your personal information including distribution bank account
details.

How do I change my beneficiaries?


Beneficiaries can be changed at any time if you wish to set different beneficiaries to those held
on record by Kharafi National. To change beneficaries download a form from the Plan
Information menu on the website and return to the Plan trustee detailed on the form.

5. Investments
How are contributions invested?
The Participant selects how all contribution types are invested from the funds available.
Currently, the funds available are:
Type

Fund

Investment name

Currency

Cash

RBC TS

USD, EUR, GBP, CAD centralised


USD Non Interest Bearing

Various

Bond

Pimco

PIMCO GIS Total Return Bond

USD

Balanced

Fidelity

Growth & Income Fund

USD

Blackrock

Global Allocation Fund *

USD

Blackrock

US Flexible Equity Fund

USD

Fidelity

America Fund

USD

Blackrock

Pacific Equity Fund

EUR

Blackrock

European Focus Fund

EUR

Fidelity

Euro Blue Chip Fund

EUR

Fidelity

Emerging Europe, Middle East & Africa Fund

USD

First State

First State China Growth Fund

USD

Blackrock

India Fund

USD

Fidelity

Emerging Markets Fund

USD

Fidelity

International Fund

USD

Blackrock

Global Dynamic Equity Fund

EUR

HSBC

HSBC Amanah Asia Pac Ex Japan Fund

USD

HSBC

HSBC Amanah Europe Equity Fund

USD

HSBC

HSBC Amanah Global Equity Index Fund

USD

Equity - Regional

Equity - Global
Shariah/Islamic
Compliant

Manager

* Default Fund
A separate investment booklet is available which describes in more detail the types of funds
available to you. This will assist you in making an informed decision.
How do I make my investment choices?
As mentioned earlier, you will be asked to make your personal investment election online after
you have received your username and password. You will have received a website guide which
details how to make your investment preference. You may choose to have your funds invested
in 10 different funds at the same time.
Under the Trust, a Retirement Account is maintained for both Employer and Employee
contributions made for and by each Participant. You are only required to make one investment
choice and this will be applied to both the Employer and Employee contributions.
What if I do not make a personal investment election?

Your contributions will be invested into the default fund which is the Blackrock Global
Allocation USD Fund.
Can I switch my existing investments into other available funds?
Yes. You may switch into other available funds at any time. This can be done online using your
unique id and password, you will have received a website guide which details how to make
your switch submission.
All Switches submitted via the website before 11:00 UK time on any business day in the UK
will be considered by the Administrator that day. If approved the switch request will be
processed (i.e. instructions sent to the Fund Manager(s)) with best endeavours for the same
day.
Switch requests submitted via the website after 11:00 UK time on any business day in the UK
may be considered by the Administrator that day, otherwise they will be considered on the next
business day in the UK. If approved the switch request will be processed (i.e. instructions sent
to the Fund Manager(s)) with best endeavours for the same day as receipt of the request and if
not on that day, then it will be processed on the following business day in the UK.
However, please note that due to dealing deadlines imposed by fund managers, although an
instruction will usually be given to the fund manager on the date of receipt of the switch, we
cannot guarantee that any switch submitted will be dealt with by the fund manager on that
day. We therefore cannot guarantee specific dealing dates or prices obtained.
On average a switch will take approximately 10 working days to complete.
Can I redirect future contributions into other available funds?
Yes, this can be done online using your unique id and password.
Any redirection of future contributions will become effective on the next contribution cycle.
The online process is the same as for your initial investment choice
You are strongly encouraged to read the entire Investment guide relating to investment
options under the Plan before making an investment decision. Investment options in
retirement plans typically have a long term investment nature and therefore investment
decisions should be taken with this is mind.

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6. Benefit Entitlements
What is vesting and when will I become vested in my account?
Vesting constitutes the number of Employee Contributions made before the Participant is
entitled to receive their Employer Contributions. The Employer has decided that the following
vesting schedule should apply for Employer Contributions:
Number of Employee
Contributions

Approximate Time in the


Plan *

Percent

0 - 35

Up to 3 Years

0%

36 - 47

3 - 4 Years

25%

48 - 59

4 - 5 Years

40%

60 - 71

5 - 6 Years

60%

72 - 83

6 7 Years

80%

84 +

More than 7 Years

100%

Normal Retirement

No Time Requirement

100%

Death

No Time Requirement

100%

* The vesting of the Employer Account is determined by the number of contributions you make
to the plan, the time is only shown to give an indication if contributions are made constantly
during the period.
If, for example, you make 60 contributions to the plan which equates to 5 years of continually
contributing to the Plan, you will receive 60% of the current value of the Employer Account,
with 40% returning to the Employer.
All Employee Contributions vest immediately, a Participant is always entitled to receive 100%
of the contributions they have made into the plan regardless of time in the Plan. The actual
value of the Employee Contributions will be determined by the investments the employee has
chosen to invest in and their value at vesting point.
What happens when I leave Kharafi National?
When you leave Kharafi National employment, your membership of the Plan ceases. Subject to
the vesting provisions above, you will be entitled to the current value of your Employee and
Employer accounts. The following options are available to you:
1.

2.
3.

Take a cash lump sum less any applicable bank charges. The benefit entitlement will be
paid by the Plan Administrator in US Dollars, Euro, Canadian Dollars or Pounds Sterling
and will not be subject to any additional income after your investments have been
liquidated. If you wish to receive these funds in any other currency, additional bank
charges payable for this may be deducted from your Account.
Transfer the cash value of your Contributions to another occupational retirement plan.
Retain the assets, in the plan for up to one year after leaving Kharafi National. You should
take a distribution before the expiry of the year. However if RBC cees have not received
instructions from you and the year expires, then any units held will be sold and RBC cees
will hold the assets as cash in each of your Employer and Employee accounts until you
provide bank account details. We suggest that you provide RBC cees with bank account
details now so that there will be no delay in making the distribution to you.

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Employees must fill out the Retirement Savings Plan Termination Form in order to have their
entitled contributions electronically transferred to the bank account depicted in the
termination form. No payment will be made to the employee without the RSP Termination Form
completely filled out.
See How to transfer your entitlement to another Plan below for more detail on the transfer out
process.
How to transfer your entitlement to another plan
You may request the Trustee, with the consent of Kharafi National, to pay the cash value of
your Contributions to another scheme of which you become a Participant, provided that
scheme is empowered to receive such a transfer. At their discretion, the Trustees and Kharafi
National may allow a transfer. If so, the Trustees shall notify the trustees or administrators of
the receiving scheme of the current value of the investment units purchased and held by the
Participant on the day their holdings are redeemed which would represent the transfer
payment. You may not re-enter this Plan and retain the previously earned value of your
Account. Please contact your local representative designated by Kharafi National for the proper
forms and procedures.
What happens if I die in service with Kharafi National?
If you die* whilst employed by Kharafi National, your account will fully vest automatically and
the Plan Administrator will pay the current value of your Employee and Employer Account to
your nominated beneficiary(ies) held by Kharafi National. If you wish the Plan value to be paid
to different beneficiaries than on record at Kharafi National then please complete a beneficiary
form as outlined in How do I change my Beneficiaries?
Distribution will normally be made to your beneficiary as soon as practicable following your
death and completion of the necessary forms, but no later than two years following the death of
the Participant. If on expiry of the two year period, any portion of the death benefit remains
unpaid, the Trustee shall hold the balance on trust for the estate of the Participant.
* excludes suicide
What happens when I retire?
The Plan is intended to allow you to save for your future, including retirement. If you retire at
Normal Retirement (see below), your membership of the Plan ceases and the Employer Account
will fully vest. The current value of your Employer and Employee Account will be paid to you as
a cash lump sum, less any applicable bank charges.
When is normal Retirement?
Normal Retirement is 60 years old, or such other date as is agreed between you and Kharafi
National and notified to the Trustees.
May I take a financial hardship withdrawal from the Plan?
Yes, a hardship withdrawal maybe taken from the Plan whilst in service.
You can withdraw up to 40% of the value of your Employee account subject to a maximum
cash withdrawal of $10,000USD. This withdrawal doesnt affect the vesting status of the
Employer Account and can only be utilised once in the life of the plan.

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May I cancel from the Plan?


Yes, you may cancel from the plan if your hire, join, or transfer date is not included in the
below table. You will be distributed the full value of the Employee Account and will forfeit the
total value of the Employer Account even if it has fully or partially vested. That is to say you
shall not be entitled to the value of any part of the company contributions even when 100%
vested.
You may rejoin the plan at a later date but the Employer Account vesting period will commence
from zero.
Employee Type/
Location

Hire or Join Date on or


after

Transfer Date on or after

Non-Manual Regular /
All Areas excluding
Egypt

21-Oct-2009

16-Jan-2010

Non-Manual Project
Specific / All Areas
excluding Egypt

01-Jan-2010

16-Jan-2010

Non-Manual Regular
and NMPS /
Egypt only

17-Feb-2010

17-Feb-2010

May I freeze or discontinue contributing into the Plan?


Yes, you may freeze or discontinue contributing into the plan if your hire, join, or transfer date
is not included in the above table.
Eligible employees, those not included in the above table, have the ability to freeze or cancel
contribution in the plan for any amount of time. If so then;
Both employee contributions and company contributions will remain active in the
retirement account. Company contributions will not be forfeited or lost.
Employees may re-join the Plan at anytime.
Previous time in the Plan will not be forfeited or lost since employee contributions are still
in the retirement account.
Time in the Plan will continue counting upon rejoining the Plan.
When may I freeze or discontinue contributing into the Plan?
Eligible employees may freeze contributions into the plan twice a year; in January and July.
Forms must be received by 14th of January to be effective in January payroll and by 14th July
to be effective in July payroll.
Are there Income Tax implications to being a Participant in the Plan?
Participants of the Plan should seek independent tax advice in their own country, in regard to
their personal implications relating to membership of the Plan.
The Plan administrator will pay any distributions to Participants gross, less any applicable
bank charges, it is the Participants responsibility to declare any payment inline with any law in
the country of residence when receiving the payment.

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May I make a transfer payment into the plan?


Yes. The Trustee, with the consent of Kharafi National, may accept a transfer payment into the
Plan. The Trustee shall obtain a certificate from the Administrator or Trustee of the
transferring plan of the amount, represented by the current value of the investment units
purchased and held by the Participant on the day their holdings are redeemed. Acceptance of
transfers is at the discretion of the Trustee and Kharafi National. Please contact your local
representative designated by Kharafi National for forms and procedures.
Are there any other restrictions on Plan benefits?
Amounts held in the Plan and credited to you are subject to increases or decreases in value
depending upon the investment option you choose and its performance. Please note that
neither Kharafi National nor the Trustee can be held responsible for any losses that you may
incur as a result of your investment choices.
Benefits under the Plan may not be assigned or pledged to others and are not subject to the
claims of creditors, except as may otherwise be required or permitted by law.
If any person receiving or entitled to any benefit under this Plan shall be subject to a
bankruptcy order then such benefit in the discretion of the Trustee shall cease and terminate.
In the event the Trustee should exercise their discretion to cease and terminate a benefit in
respect of a Participant, the Trustee shall hold or apply such benefit or any part thereof to or
for such person, spouse, children or other dependants of the Participant, or any of them, in
such manner and in such proportions as the Trustee shall in their sole discretion determine.
Kharafi National reserves the right to recover, out of a Participants Contributions, any debt
owed to it as a result of any fraudulent or criminal act or omission by that Participant or any
liability it has incurred as a result of any undertaking it has given on that Participants behalf
and at their request. No such recovery shall be made if the debt is challenged in a competent
court until the court has agreed that the debt is valid.
In certain circumstances, contributions made to the Plan may be returned to Kharafi National
if made on the basis of a mistake of fact.

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7. Other Information
What are the procedures for filing a claim or settling a dispute under the Plan?
If you believe you are being denied any rights or benefits under the Plan, you may file a claim
in writing with the Trustee. If the claim is denied, in whole or in part, the Trustee will notify
you in writing, giving the specific reasons for the decision, including specific reference to the
pertinent Plan provisions and a description of any additional material or information necessary
to perfect the claim and an explanation of why that material or information is necessary. The
written notice will also advise you of your right to request a review of the claim and the steps
that need to be taken if you wish to submit the claim for review.
May the Plan change or be terminated in the future?
The Plan may be amended or terminated at any time by Kharafi National in any manner that it
determines. Except under limited circumstances, Kharafi National does not have the power to:

Amend the Plan in such a manner as would permit any part of the Plan's Trust assets to be
diverted to purposes other than for the exclusive benefit of Participants or their
Beneficiaries (or the reasonable expenses of administering the Plan and Trust).

Amend the Plan retroactively to deprive any Participant or Beneficiary of any benefit to
which he or she was entitled to prior to the amendment.

Whom should I contact if I have any questions?


You should contact your local representative designated by Kharafi National for forms, for
further information about the Plan or if you have any questions regarding benefit entitlements.

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8. Plan Contact Information


Summary Information
Type of Plan
Plan Year

Retirement Savings Plan


31st December

Contact Information
Plan Administrator

RBC cees International Limited


Exchange Tower, 9th Floor
19 Canning Street
Edinburgh
United Kingdom
EH3 8EG
TeamKharafi@rbc.com
Tel: +44 (0) 131 222 4916

Plan Trustee

RBC cees Trustee Limited


19-21 Broad Street
St Helier
Jersey
Channel Islands
JE1 3PB
UK
TeamKharafi@rbc.com
Tel: +44 (0) 131 222 4916

Employer

Kharafi National
PO Box 24081
Safat 13101
Kuwait
Dalal Althefery, HR Superintendent
dalal.althefery@kharafinational.com
Tel: +965 222 59 000 / ext: 4076

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This document is issued by RBC Corporate Employee & Executive Services ("RBC cees"). RBC cees comprises a number of companies which are all subsidiaries of Royal Bank of Canada
("RBC"). RBC cees Limited (the Company) is regulated by the Jersey Financial Services Commission in the conduct of trust company business and by the Guernsey Financial Services
Commission in the conduct of fiduciary business. RBC cees terms and conditions are updated from time to time and can be found at http://www.rbccees.com/cees-legal.html. Registered office
of the Company: 19 21 Broad Street, St Helier, Jersey, Channel Islands, JE1 3PB, registered company number 65008. All products and services offered by the Company are subject to its
Terms of Business, a copy of which will be made available upon request.
This document is prepared solely for the party whose name appears on page 1 of this document, and does not constitute an invitation to apply for any product or service in any jurisdiction to any
other person to whom it is unlawful to make such a solicitation in such jurisdiction. Certain of the products and/or services mentioned in this document (namely Banking, foreign exchange
transactions and Investment advice) are provided by a variety of RBC subsidiaries, other than the Company, operating in a number of different jurisdictions. You should carefully read any risk
warnings or regulatory disclosures in any literature that you receive from RBC, its subsidiaries or affiliates. Please note that (i) the applicable regulatory regime, including any investor protection
or depositor compensation arrangements, may well be different from that of your home jurisdiction; and (ii) all calls made to and/or by the Company and any sister companies within the RBC
Wealth Management network may be recorded.
Registered trademarks of Royal Bank of Canada. Trademark of Royal Bank of Canada. Used under licence.