APPOINT MULTIPLE EDUCATION BENEFICIARIES UNDER THE ONE TAX-EFFECTIVE, FLEXIBLE BOND
Futurity leads the way in helping you cover education expenses at every stage of your life. Fund school and university and other associated education costs, with an innovative new Education Bond that works like your own special purpose ‘education’ family trust.
With the ability to appoint up to ten Education Beneficiaries you can cater for the education needs of multiple generations of your family and/or philanthropic giving.
The flexible structure gives you full control and access to your funds at any time, both for making Education Benefit Claims and withdrawals for any purpose. Importantly, when you make Education Benefit Claims to fund education costs, these claims have particularly attractive tax outcomes. This is because Futurity automatically adds an Education Tax Benefit of $30 for every $70 claimed from your Education Bond’s earnings component as Education Benefits.
Contributions to your bond can be made via a regular savings plan or lump sum contributions. You can then choose how your funds are invested via our expansive investment menu with options to build your own portfolio or use a custom blended option.
TAILOR SEPARATE INVESTMENTS FOR EACH BENEFICIARY
An Individual Education Bond allows you to nominate a single Education Beneficiary who will be the sole recipient of the Bond’s benefits.
Enabling you to plan, save and invest to ensure that future education expenses for your nominated Education Beneficiary will be met.
The flexible structure gives you full control and access to your funds at any time, both for making Education Benefit Claims and withdrawals for any purpose. A unique feature of an Education Bond is its tax effective outcomes when you make Education Benefit Claims for your Education Beneficiary. This is because Futurity automatically adds an Education Tax Benefit of $30 for every $70 claimed from your Education Bond’s earnings component as Education Benefits.
Contributions to your bond can be made through a regular savings plan or by making lump sum contributions. You choose how your funds are invested by selecting from our expansive investment menu, with options to build your own portfolio or use a custom blended option.
Ahead of the pack for tax-effective education investing
Futurity Education Bonds are a smart tax-effective choice, offering a variety of tax benefits. Making them a great choice for tax-effective investing.
Due to their unique structure you may enjoy lower tax rates, education benefits and tax-free withdrawals when compared to traditional managed investments. Which is particularly appealing to those on a higher personal tax rate. With the added benefit of not needing to declare ongoing earnings in your annual tax return.
Wealth and estate planning features
Futurity Education Bonds have great estate planning features to ensure your investment is treated in line with your future wishes. You can make ‘Will-like’ nominations to achieve tax-effective inheritances, which means your Bond’s proceeds are distributed to your chosen nominees on a tax-free basis. You may also appoint a Bond Guardian to carry out your wishes should you die or become incapacitated.
Through the Future Activated Transfer feature of the Bond you are able to select a date or life event, that results in the Bond automatically shifting ownership from the original Bond Owner to another person (such as a child or grandchild), company or a trust.
Choose from an extensive menu of investment options
Our investment menu has been designed to give you the just the right amount of choice and flexibility to suit your family’s unique circumstances. With choices including both active and passive investment styles designed to help meet your educational cost and investment objectives. Plus, the addition of a socially responsible choices. within the different investment options.
If you’d prefer some additional guidance and are looking to simplify your choices, check out Futurity EdSaver. Where we have done the hard work for you to narrow down and simplify your investment choices.
Make an informed choice
At Futurity, transparency and openness is important to us so we’ve gathered together all the details to help you make an informed decision.
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Futurity Education Bonds PDS
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A guide to establishing and managing your Bond
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Education Bonds are a tax-effective way for people (particularly high-income earners) to save and invest for education specific funding. These dedicated savings and investment vehicles allow you to keep your education savings separate from other investments. Importantly, these Bonds can be structured for many longer dated strategies (including for estate planning) with a term of up to 99 years able to be set.
The Family Education Bond is a savings and investment structure to fund the education needs of multiple Appointed Education Beneficiaries under one flexible Bond. Up to 10 Education Beneficiaries at any one time can be appointed under a Family Education Bond.
The Family Education Bond can operate like a special education purpose Family Trust structure with the inbuilt tax effectiveness of a traditional Education Bond. You as the Bond Owner have discretion to appoint and remove from a wide field of potential Appointed Education Beneficiaries from the Family Class and/or Friends Class.
An Individual Education Bond is set up with one individual Education Beneficiary per Bond. This one-to-one structure ensures that all the Bond’s benefits are earmarked and invested for that single Education Beneficiary. This provides certainty that each Education Beneficiary’s Bond is aligned to their specific age, education goals and timeframes. There are no restrictions on the number of Individual Education Bonds that can be taken out.
Yes, with a Family Education Bond you have wide discretion to appoint and remove Education Beneficiaries. For an Individual Education Bond you can replace the Nominated Education Beneficiary at any time.
No, the wide classes of Education Beneficiaries, including yourself, can be any age. You can even establish a Bond for not yet born children.
Yes, this can be done at any time. You can change the duration of your Bond Term whether a set number (up to 99) years, or set to end on the death of the Bond Owner or a specified period after such death.
Futurity Education Bonds are Tax-Paid investments meaning that we pay the tax on the Bond Owner’s behalf. There are no annual distributions paid to you as all earnings are included in the Bond’s growth and reflected within daily calculated unit price.
One of the distinct advantages of Education Bonds over Investment Bonds, is a special taxation benefit called the Education Tax Benefit.
The Education Tax Benefit is received when Education Benefit Claims are made from the Bond’s Earnings Component and represents a refund of the tax already paid by Futurity on the Bond’s investment earnings. This benefit is equal to $30 for every $70 withdrawn from the Earnings Component. Education Benefit Claims are tax assessable in the Education Beneficiary’s hands, rather than the Bond Owner.
These features make Education Bonds highly attractive as a flexible, tax-effective savings vehicle to fund education expenses for one or more Education Beneficiaries. The Bond Owner retains full control of their investment in case any unforeseen circumstances arise, or if they change their mind and want to use the Education Bond for non-education purposes.
Futurity Education Bonds are highly flexible and can cater to a range of lifelong expenses.
Education related drawdowns receive a special taxation benefit called the Education Tax Benefit. However, Bond Owners can still access funds for other purposes and may still achieve desirable tax outcomes. When a withdrawal is made for non-education related expenses, advantageous Investment Bond rules will apply.
We recommend that Bond Owners and prospective Bond Owners seek independent taxation advice.
There are no fees for establishment, additional contributions, claims/withdrawals or for exiting your Bond.
Management fees apply and consist of Futurity’s Management fee as well as investment management fees charged by Underlying Managed Funds on the Bond’s expansive investment menu. The total of these fees have a percentage impact on the net asset value of the selected Investment Options and is reflected in their unit prices.
Education Bonds are Tax-Paid investments - meaning throughout a Bond’s entire investment term, Futurity pays tax annually on behalf of you as Bond Owners. This tax is nominally stated at 30%, but much lower effective fund tax rates apply to most Investment Options.
A minimum Initial Contribution amount of $5,000 applies to Lump Sum plans.
For Savings Plans, you can start with an Initial Contribution of $1,000 and an ongoing Savings Plan of $200 per month. The Savings Plan can be converted to a Lump Sum plan once a total Bond value of $5,000 has been reached.
A maximum contribution limit of $660,000 per Education Beneficiary applies to each Individual Education Bond. Higher limits apply to Family Education Bonds.
You can use our Savings Escalator feature to increase your Savings Plan amount each year. You can select a rate between 0% and 25%, helping your Contributions keep pace with inflation.
There is a cooling off period of 14 days from the first to occur of either, receipt of your Confirmation Certificate or 5 days after we issue your Bond should you change your mind regarding the investment. You will receive your funds back at the current unit price including any fees that were payable (initial advice and/or stamp duty).
What happens if the Education Beneficiaries completes their education and there are still funds left in the Bond?
If there are still funds left in the Bond and all education claims have been finalised, then the Bond Owner can either nominate a new Education Beneficiary or continue to make Other Withdrawals for non-education purposes. If the Bond Owner doesn’t nominate a new Education Beneficiary, you can fully withdraw funds or decide to continue holding it as an Insurance Bond with Tax Rules applying.
No - when considering investing into a Futurity Education Bond, it is important to understand that:
- investment returns can go up and down
- future returns may differ from past returns
- returns and net contributions are not guaranteed and will vary
- you may get back less than what you paid in.
By using the Bond’s Estate Planning Features, Bond Owner’s can ensure their investment is treated in line with their wishes.
The Bond Estate Nomination feature ensures the proceeds of the Bond are paid to your Bond Estate Nominees if you die (and are the last surviving Life Insured) before the end of the Bond Term. This ensures that Bond Benefits pass to them outside of a Will and without going through the normal probate and estate procedures. Bond Estate Nominees can be changed at any time.
Future Activated Transfers allows you to have the ownership of your Bond transferred to another party (such as a child or grandchild) upon your death as Bond Owner or certain period after your death. The Transferee receives full ownership of the Bond in its tax-advantaged state.
Alternatively, a Bond Guardian can be appointed to act on behalf of a Bond Owner in the event of death, legal, physical or mental incapacity. The role of the Bond Guardian is to ensure that the original intentions for the Bond are carried out and must act in the best interest of the Education Beneficiary. The Guardian can act with restricted or full powers as elected by the Bond Owner.
