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Employee Direct Deduction Savings Plan

Employee Direct Deduction Investment Savings Plan for Bermuda Companies

We all know that we should be saving money, whether it’s to buy that dream house, set something aside for your child’s education, or for a comfortable retirement. But the reality is that putting money aside can be difficult. LOM Securities (Bermuda) Limited has a simple investment savings scheme that can help you achieve your goals.

Savings Tips

• Set goals – whatever your reason for saving, setting goals will keep you motivated.
• Start early – the longer you save, the more time your money has to grow.
• Save as much as you can – a few extra dollars now can mean a larger pot of money when you need it.
• Create a good mix – the right allocation among stocks, bonds and cash investments can have an enormous effect on your savings. LOM will assist you in choosing the right mix for your needs.
• Leave your savings alone – give your money time to grow.
• Don’t try to anticipate the movements of the market. Sure, you can make adjustments every so often but the best advice is to pick your long-term strategy and stick with it.
• Do not be alarmed by media scare stories.

Why Put Money Aside for the Future?

• Social Insurance will probably cover less than half of what you’ll need for retirement.
• People are living longer – 20 or 30 years after they stop working. That’s a long time to live off your savings.
• Inflation will always be a factor. Over time, even low inflation rates can eat away at the buying power of a dollar, making that dream home that much harder to buy.

Projected Value of Your Investment

Here's How the Plan Works

For the Employee:

• The money you save comes right out of your paycheck – before you ever touch it. You choose an amount you are comfortable with putting aside and your employer sends it to LOM for your investment account. This money is then invested on your behalf according to parameters chosen by you.
• You have an account directly with LOM and are in control of your account and fund choices.
• The LOM Plan provides an additional level of savings, added diversification to the company pension plan and reduced fees (no pension fund administration fees).
• Opportunity for your savings to work harder than bank deposits.
• Easy access to savings when you need them – funds are not locked-in.
• Online access to statements.
• No set-up fees or costs.
• Low monthly minimum contribution of $50.

For the Company:

• The Plan is simple and streamlined and requires very little effort on the company’s part.
• Low monthly minimum contribution of $1,000 i.e. $1,000 total combined employee contributions.
• No set-up fees or costs.
• LOM representatives will meet with company management to discuss the Plan in detail and help determine company plan parameters.
• LOM representatives will conduct seminars at the company’s convenience to help employees understand the need to save for their short and long term financial goals and to explain the Plan details.
• LOM representatives will meet with interested employees to discuss risk tolerance, fund allocations and help complete account forms.
• All the company has to do is deduct the funds from payroll and send to LOM for account allocation.
• Any changes to employee allocations will be done directly through LOM and LOM will ensure the company receives notification immediately for next payroll deduction.
• No tax is charged for exchange from BMD to US dollars when funds are returned in BMD dollars.
• Applicable FX rates will apply for non-US dollar denominated funds.
• Company benefits include: great recruiting tool; and supporting the education of budgeting and savings for employees.

The Investment Choices Available Are:

Preservation of Capital

The LOM Money Market Funds (USD, CAD, EUR and GBP)
Your primary goal is capital preservation. Through active management these funds’ objectives are to achieve a return in line with short-term money rates of the relevant currency.

Conservative

The LOM Fixed Income Fund (USD)
You are prepared to experience some fluctuation in value but capital preservation is very important to you. This fund mainly invests in US government bonds, corporate bonds, convertible securities, asset-backed securities and mortgage related securities

Moderate

The LOM Balanced Fund (USD)
You appreciate the benefits of investing in shares and bonds and are prepared to experience some risk in the value of your account for the long term potential of future gain. This fund invests in a combination of equity funds, fixed income funds, hedge funds and commodity funds. The investment objective is the growth of capital and the production of income.

Aggressive

The LOM Global Equity Fund (USD)
You fully appreciate the long-term capital growth potential and dividend income that shares can provide and you are prepared to accept increased risk in the value of your capital that comes with share-based global investments. This fund invests in large cap, blue chip equity securities worldwide.

The LOM Global Equity Fund (Ex-US) (EUR)
You fully appreciate the long-term capital growth potential and dividend income that shares can provide and you are prepared to accept increased risk in the value of your capital that comes with share-based global investments. This fund invests in large cap, blue chip equity securities in Europe, the Far East and Australasia.

For investment allocation examples download our investment worksheet.

If you’re uncertain about how to begin, try starting with a small amount such as (say) 3% or 4% of your pay. Then increase it by a specific amount like 1% at regular intervals – such as a particular time of year or whenever you receive a raise. Before long, your savings will be growing and you’ll hardly even notice the effect on your paycheck!

Program Details

Eligibility and Enrollment

As an employee of a participating company, you are eligible to participate in the Plan after completing 3 months of eligible service. In order to join the Plan you will need to set up an account with LOM and provide proof of identity (valid passport or driver’s license), a recent bank statement and verification of physical address.

Withdrawals

All funds except the Money Market Funds have a redemption fee of 1% in the first year. However, up to 10% of the fund value may be withdrawn without penalty in the first year. After the first year, withdrawals (of any amount) can be made without penalty twice each year. LOM reserves the right to charge $50 for each additional withdrawal to encourage this to be a savings plan.

The Money Market Funds have the ability to withdraw any amount twice each year, including the first year. LOM reserves the right to charge $50 for each additional withdrawal to encourage this to be a savings plan.

If a participant in the Plan leaves the company’s employment, he or she may do any of the following:

• Leave the account invested without further contribution required (available if the balance is more than $5,000).
• Leave the account invested and set up automatic monthly contributions going forward either personally or through a new employer (no minimum balance required).
• Close the account and receive the funds as a lump sum cash payment in the currency the account was established in.

Reporting

Your account statement will reflect any and all activity in the Plan. Fund prices are also quoted on Bloomberg, on our website and in the Royal Gazette.

Legal Disclaimer

All funds are offered in accordance with the terms laid out within their relevant Information Memoranda. The relevant Information Memoranda per fund contains further information on risks, advisory fees, distribution charges and other expenses and should be read carefully before anyone invests or sends money. Fund Information Memoranda are available on website and from the Fund Manager.

LOM Asset Management Limited is licensed to conduct investment business by the Bermuda Monetary Authority.