Schroder Pension Management Limited Key Features of the Trustee Investment Plan

Transcription

1 January 2016 For trustees of registered pension schemes and their professional advisers only. Not suitable for individual scheme members. Schroder Pension Management Limited Key Features of the Trustee Investment Plan

2 1 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Management Insurer: Registered Office: Directors: The Insurer of the funds is Schroder Pension Management Limited. 31 Gresham Street, London, EC2V 7QA. J. Troiano G. Aslet D. Heathcock W. Mepham P. Wallace Ultimate Holding Company: Schroders plc incorporated in England and Wales. Investment Management: The Insurer has delegated investment management of the life funds to Schroder Investment Management Limited (Investment Manager). The Insurer and the Investment Manager are subsidiary companies of Schroders plc. Schroder Investment Management Limited Schroder Investment Management Limited is a company incorporated in England and Wales, whose registered office and principal place of business is at 31 Gresham Street, London, EC2V 7QA. Schroder Investment Management Limited is authorised and regulated by the Financial Conduct Authority. Terms of Agreement with Insurer The appointment of the Investment Manager has been made under agreements between the Insurer and the Investment Manager. The Investment Manager has full discretionary powers over the investment of the property of the life funds subject to the overall policy and supervision of the Insurer. The agreement between the Insurer and the Investment Manager is terminable on three months notice. The agreement between the Insurer and Investment Manager may also be terminated with immediate effect when this is in the interests of Unitholders. Principal Activities of the Investment Manager The principal activities of the Investment Manager are fund management and investment advice. The Investment Manager is authorised to deal on behalf of the life funds. The Investment Manager shall be entitled to receive for its own account by way of remuneration for its services a fee of such amount and payable on such basis as shall be agreed in writing from time to time between the parties.

3 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 2 Administration The Insurer has delegated all administration functions except Custody services to the Investment Manager. Fund Accounting: Auditor: Register of Unitholders: Custodian: The Investment Manager has delegated the functions of fund accounting, valuation and pricing to J.P. Morgan Europe Limited, 25 Bank Street, Canary Wharf, London E14 5JP. The auditor of the Insurer is PricewaterhouseCoopers LLP whose principal place of business is at Erskine House, Queen Street, Edinburgh, EH2 4NH. The Insurer is responsible for maintaining the register for each life fund. The Investment Manager has delegated certain registrar functions to International Financial Data Services Limited, IFDS House, St Nicholas Lane, Basildon, Essex SS15 5FS. The Investment Manager has delegated the functions of Contract Settlement, Unit Issues and Redemptions, and Record Keeping to International Financial Data Services. The Insurer has appointed JPMorgan Chase Bank, 25 Bank Street, Canary Wharf, London E14 5JP as the Custodian of the property of the life funds ( Custodian ).

4 3 Schroder Pension Management Limited Key Features of the Trustee Investment Plan About the Insurer and this document Schroder Pension Management Limited (the Insurer) is an insurance company authorised to carry on long term insurance business. The Insurer maintains a number of unit linked funds (life funds) for the purpose of offering tax efficient investment options to its policy holders and, by way of reinsurance, to those of other authorised insurance companies. The Insurer offers investment options to the trustees of pension schemes registered under Chapter 2 of the Finance Act Some UK occupational pension schemes (mainly in the public sector) are established under statute rather than by trust and consequently do not have trustees. For the purposes of this document we use the term trustees to include the managers of such schemes. Any reference to you or yours refers to the trustees. The Insurer is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Registered in England and Wales (registered No ) with its registered address and head office at 31 Gresham Street, London, EC2V 7QA, United Kingdom. The Financial Conduct Authority is a financial services regulator. It requires us, the Insurer, to give you this important information to help you to decide whether our Trustee Investment Plan is right for you. You should read this document carefully so that you understand what you are buying, and then keep it safe for future reference.

5 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 4 This key features document is intended for trustees of registered pension schemes and their professional advisers who wish to access the Insurer s range of life funds. It is not intended for individual scheme members. This key features document will give you information on the main features, benefits and risks of the range of life funds provided by The Insurer but should be read in conjunction with: your Policy your signed contract agreement with the Insurer setting out terms, accessible life funds, charges etc. and the Insurer s Policy Rules a document setting out the rules governing the operation of the life funds, to ensure equality of treatment between the Insurer and its policyholders. Details of the life funds managed by the Insurer are given in the life fund data tables at the end of this document. Alternatively you can visit our website: en/uk/pensions/ The Insurer s range of life funds is governed by the Permitted Links rules, as detailed in the FCA s Conduct of Business Sourcebook (COBS), section 21. Definitions In this key features document the following terms have the meanings given to them below, except where the context requires otherwise: Assets in relation to a life fund, refers to all cash, investments, contractual rights and other property of any description held from time to time for the account of that life fund. Collective Investment Scheme (CIS) an arrangement which allows people to invest money together with other people. It enables investors to access a wider range of assets than would be possible with only their own investment. Examples of CISs are Unit Trusts and Investment Funds. Flight Path Swift a Schroders Group product solution for trustees seeking a Liability Driven Investment (LDI) strategy for defined benefit pension schemes. Fund Factsheets documents produced from time to time by the Insurer called Fund Factsheets which detail the life funds and their Investment Objectives and which are available from the Insurer on request. Policy a contract with the Insurer. Registered Pension Scheme a scheme or other arrangement which is registered or treated as registered for the purposes of Part 4 of the Finance Act 2004 and that registration has not been withdrawn. The Insurer s fund range the range of life funds that are managed by the Insurer and made available to UK registered pension schemes. Trustees individual persons or members of a Board given control or powers of administration of assets of UK registered pension schemes in trust with a legal obligation to administer it solely for the purposes specified.

6 5 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Unitholder policyholder investing in the Insurer s life funds whereby benefits payable under the policy are determined by reference to the value of units allocated to the policyholder (as maintained on the Register of Unitholders). Unit-linked fund or life fund a portfolio of assets maintained by the Insurer which is divided into units of equal value. The value (or price) of each unit is determined by the value of the portfolio of assets. The assets held within the fund may be a mix of direct and indirect investments. A direct investment is where the fund holds an actual asset, such as company shares or a building. An indirect investment is where the fund holds assets by investing in a collective investment scheme. Unit series in some cases a unit-linked fund may be split into a number of unit series whereby each unit of the same series is of equal value, and the performance of each series differs only to the extent that different charges apply.. Aims of your Policy with the Insurer Your policy with the Insurer is an investment only insurance policy permitting trustees of Registered Pension Schemes to invest in a range of life funds. The value of the policy is linked to the performance of the life funds. Each life fund has its own investment objectives. A summary of these objectives is contained in the Key Features Document Fund Data section of this document.

7 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 6 Your investment You must make a single premium investment when you take out your policy. Although SPML does not accept regular premiums, it will accept additional single premiums made by you at any time. The invested premiums are used to purchase units in whichever life fund(s) you select from the range available at the time of the premium payment. The price of the units in each fund is calculated daily at a published valuation point. Your policy is primarily designed for investment over the medium to long term and the benefits payable are entirely dependent upon the investment performance of the assets in life fund(s) you choose. You may request a surrender of some or all of the units allocated to you, on any business day, to obtain the cash required for the payment of benefits to scheme members or to invest elsewhere. Surrender proceeds are determined using the unit price calculated at the next valuation point. You may switch between each of the funds you have selected or other life funds offered by SPML, subject to each fund being open to new investment. The returns achieved are entirely dependent on the performance of the assets in which your chosen life funds are invested. Charges are either deducted from the assets of your chosen life fund(s) on a daily basis or are payable by quarterly invoice. There are no initial charges. Your Policy will take effect from the commencement date shown on the Policy and, subject to cancellation, is unlimited as to its duration.

8 7 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Risks General risk factors to consider when investing in these life funds Any stock market investment involves risk. Some of these risks are general, which means that they apply to all investments. Others are specific, which means that they apply to individual funds. Before you decide to invest, it is important to understand these risks. Market risk The value of investments and the income from them can go down as well as up and investors may not get back the amount originally invested. Performance risk Past performance is not a guide to future performance and may not be repeated. Inflation risk Inflation will, over time, reduce the spending power of your investments. Derivatives for efficient portfolio management The life funds may invest in collective investment schemes which use derivative instruments for the purpose of efficient portfolio management. It is not our intention for that the use of derivatives will significantly alter the overall risk profile of the fund. Tax Alterations to tax rates and relief and their impact on policyholders may change at any time and may be applied retrospectively. Cancellation If you exercise your right to cancel the policy, you may not receive a full refund of the premiums paid if the value of your policy has fallen between commencement and our receipt of your intention to cancel. Specific risks associated with these life funds There are fund specific risks and information relating to investing in the life funds that you need to be aware of. The most common risks are highlighted below and additional fund specific information can be found on the fund factsheets under the heading.

9 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 8 Risk Considerations. The Key Features Document Fund Table at the end of this document indicates which of these risks are applicable to each life fund. A. Exchange rates Where a fund holds investments denominated in currencies other than sterling exchange rates may cause the value of these investments, and the income from them, to rise or fall. B. Interest rates With funds investing in bonds there is a risk that interest rate fluctuations could affect the capital value of investments. Where long term interest rates rise, the capital value of bonds is likely to fall, and vice versa. C. Credit/default Bond investments are exposed to credit risk reflecting the ability of the borrower (i.e. bond issuer) to meet its obligations (i.e. pay the interest on a bond and return the capital on the maturity date). The risk of this happening is usually higher with bonds classified as sub-investment grade. These may produce a higher level of income but at a higher risk of default than investments in investment grade bonds. In turn, this may have an adverse impact on funds that invest in such bonds. D. Index unconstrained/reference benchmark The fund is not tied to replicating a benchmark and holdings can therefore vary from those in the index quoted. For this reason the comparison index should be used for reference only. E. Emerging markets Investments in emerging markets can involve a higher degree of risk. Less developed markets are generally less well regulated than the UK, investments may be less liquid and there may be less reliable arrangements for trading and settlement of underlying holdings. F. Specialist sectors/small markets Funds that focus on specific sectors can carry more risk than funds spread over a number of different industry sectors. G. Single country funds Funds that invest solely in the companies of one country or region can carry more risk than funds spread over a number of countries or regions. H. Concentrated portfolios Funds which invest in a smaller number of stocks can carry more risk than funds spread across a larger number of companies. I. Derivatives for investment purposes The life funds may invest in collective investment schemes that use derivatives and forward transactions for investment purposes. These instruments can be more volatile than investments in equities or bonds and can lead to more extreme movements in investment performance.

10 9 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Questions and Answers How do I invest? An application form must be completed and a Policy must be entered into before dealing for the first time. Copies of specimen signatures of individuals whom the trustees wish to have authority to instruct the Insurer (as appropriate) in relation to investments and disinvestments must also be supplied. Before accepting the application, the Insurer will require evidence that the pension scheme is a bona-fide arrangement in order to satisfy its obligations under the relevant anti-money laundering regulations. We will require confirmation that the scheme is a Registered Pension Scheme in accordance with Chapter 2, Part 4 Finance Act Where the scheme has not yet received approval from HM Revenue & Customs, the Insurer will require evidence that the sponsoring company is bona-fide and the confirmation of registration with HM Revenue & Customs should be forwarded to us once received. Investments into the Insurer s life fund range can be made by cash or, where agreed in advance with the Insurer, through the transfer of existing assets. For cash subscriptions: dealing days are every weekday, excluding UK bank holidays. With the exception of the Flight Path Swift solution, life funds which are marked in the life fund data tables at the end of this document, instructions received by 12 noon (with the exception of Pacific Fund, Global Equity Fund and Specialist Value UK Equity Fund which can be received up to 4pm) will be transacted on a forward pricing basis on that day s valuation point (i.e. at a price calculated by reference to the value of the property of the life fund at the next valuation point). We can accept deal instructions through fax or post. What is the minimum investment amount? Series 1 = minimum initial investment amount is 1,000,000. Series 2 = minimum initial investment amount is 1,000,000. Series 3 = access to this series is agreed at the discretion of the Insurer. Please speak to your client director or relationship manager for further information. There is no minimum for additional investments. What investment options are there? The Insurer offers a range of life funds under the Policy which is agreed between the Insurer and the trustees. The full range of funds is shown in the key life fund data section at the end of this document. Fact sheets relating to each life fund are produced quarterly. These carry details of the specific life fund objectives, performance and associated risk factors. These are published on our website.

11 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 10 How is the value of the unit-linked Policy calculated? The value of the Policy will depend directly on the performance of certain specified assets depending on the life funds selected. We allocate units to our policyholders so we can fairly determine what we owe you under the policy. We use the value of the units to determine the value of your policy. You do not have any beneficial right to the underlying assets of the life fund. Valuations and details of transactions can be obtained through our on-line systems E-Distributor and SchrodersLink. Details of how to access these can be provided upon request. When are funds valued? Life funds in the Insurer s range are valued at 12 noon (with the exception of Schroder Life Pacific Fund, Global Equity Fund and Specialist Value UK Equity Fund which are valued at 4pm) and unless stated otherwise in the key life fund data section at the end of this document (i.e. the Flight Path Swift solution funds). How are unit prices determined? Unless there are events beyond the Insurer s control preventing normal operation, the life funds are valued every weekday, except on English public holidays. The unit prices for all funds are published on our website ( each day. A single price is calculated for each life fund and all dealing takes place at the single price for each life fund calculated at the published valuation point for the life fund. The price of units in each fund depends on the value of the investments held within the fund and the number of units in issue at each valuation point. Assets held by the life funds are valued using market prices where available. Funds are normally priced using a mid price valuation. Fund pricing Dilution To mitigate the effects of dilution the Insurer has the discretion to make a dilution adjustment on the sale or redemption of Units to adjust the price. The need to make a dilution adjustment will depend on the volume of sales or redemptions of Units. The Insurer may make a discretionary dilution adjustment if, in its opinion, the existing (for net purchases) or remaining Unitholders (for net redemptions) might otherwise be adversely affected. The Insurer therefore reserves the right to make a dilution adjustment in the following circumstances: a. where the life fund is in continual decline (is suffering a net outflow of investment); b. on the life fund experiencing large levels of net sales relative to its size; c. on the life fund experiencing net sales or net redemptions on any day equivalent to a threshold of 1% or more of the size of that life fund; d. in any other case where the Insurer is of the opinion that the interests of existing or continuing Unitholders and potential investors, require the imposition of a dilution adjustment.

12 11 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Where a dilution adjustment is made, it will typically increase the dealing price when there are net inflows into the life fund and decrease the dealing price when there are net outflows. The dealing price of each class of Unit in the life fund will be calculated separately but any dilution adjustment will, in percentage terms, affect the price of Units of each class identically. On the occasions when the dilution adjustment is not made there may be an adverse impact on the total assets of the life fund. As dilution is related to the inflows and outflows of money from the life fund it is not possible to accurately predict whether dilution will occur at any future point in time. Consequently it is also not possible to accurately predict how frequently the Insurer will need to make such a dilution adjustment. In the usual course of business, the application of a dilution adjustment will be triggered mechanically and on a consistent basis. The dilution adjustment for each life fund will be calculated by reference to the costs of dealing in the underlying investments of that life fund, including any dealing spreads, and these can vary with market conditions. This means that the amount of the dilution adjustment can vary over time. Estimates of the dilution adjustments for each life fund are available on request. Fund pricing Fair value pricing Where the Insurer believes that a significant event has occurred between the close of the markets in which the life fund invests and the point of valuation, and that such event will materially affect the value of that life fund s underlying property, the Insurer may adjust the Net Asset Value per Unit so as to reflect what is believed to be the fair value of the portfolio as at the point of valuation. Alternatively if, in the opinion of the Insurer, the price obtained for an underlying asset is unreliable or no recent traded price is available or if no recent price exists, at a value which, in the opinion of the Insurer, is fair and reasonable, the Insurer may adjust that price so as to reflect what is believed to be the fair value of the underlying asset, in order to reflect the fair value of the portfolio. This is known as fair value pricing. The level of any adjustment will be based upon the movement in a chosen surrogate index which the Insurer believes to be strongly correlated to and representative of the life fund s investment performance, up until the point of valuation, provided that such movement exceeds the threshold as determined by the Insurer for the relevant life fund. The surrogate index will usually be in the form of a futures index, but might also be a basket of securities, which the Insurer believes is also strongly correlated to and representative of the performance of the life fund. Where an adjustment is made, it will be applied consistently to all class of Units within the same life fund. The Insurer will extend the measures described above to any of the life funds whenever it deems it appropriate.

13 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 12 How is investment income treated? All investment income and any tax recovered is retained within the life fund and so increases the value of the units. There are no distributions from the life funds; all units are accumulation only. How are units surrendered? All or part of your investment may be surrendered at any time, except under certain circumstances set out in your Policy, by completing a dealing form and sending this to us by post or fax. This should be signed by authorised signatories in accordance with the arrangements agreed with the Insurer. Surrenders will usually be made as cash although under certain circumstances we are able to satisfy disinvestment through in-specie transfers. What is the dealing and settlement process? Settlement for units purchased or sold will typically be four business days after the dealing day, with the exception of the Flight Path Swift solution life funds which will settle units typically one business day after the dealing day. Our preferred means of settling transactions is by CHAPS. We will settle all disinvestments by CHAPS to a predetermined bank account. For transfers of assets: we will work with you and your advisors to identify an appropriate transfer strategy that minimises costs and increases the efficiency of the transfer. Under certain circumstances we are able to satisfy disinvestment through in-specie transfers. What are the fees and charges? There are no initial or disinvestment charges. The charges outlined below are those that are contained within the on-going charges figures of the Insurer s life fund range. Annual Management Charge: An Annual Management Charge (AMC) is payable on investments in the life funds and can be by direct invoice or through the unit price of the life fund. For series of units where the AMC is included in the price, an adjustment is made within the unit price on a daily basis. The AMC for series 2 is payable under invoice. Typically this is payable on a quarterly basis and is calculated on the arithmetic average of the market value of all the assets invested as at the end of each month during the quarter. The schedule to your Policy will confirm the methodology applied to your investment.

14 13 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Custody Fees: These consist of: safe custody charges settlement and transaction charges other ad-hoc charges. Other Charges: In addition to the AMC, other charges and expenses may be applied. These may include: expenses, taxes, duties, and other charges for buying, managing, maintaining, valuing and selling assets interest on any money that we have borrowed for the life fund any other expenses, taxes, duties and charges arising from our operation of the life fund part or all of any tax charge or other charge on us management costs of underlying funds, where a life fund holds other underlying funds as its investments. Our charges vary by fund and are subject to the terms agreed with the trustees. Please note that the Matching Plus funds cannot be purchased as a standalone investment; they form part of the Flight Path Swift solution. For full details on the fees and charges applied to any associated underlying Schroder Collective Investment Schemes that one of the Insurer s life funds may invest in, please refer to the relevant Prospectus. What about tax? The Insurer is a UK resident company subject to the UK tax regime for life assurance companies. The Insurer s life funds do not pay corporation tax on investment income arising from investments held or any chargeable gains arising from disposal of investments held. In addition, in certain jurisdictions the Insurer s life funds are subject to more generous tax treaty reliefs than other UK fund types. There are three specific cases where a life fund exhibits specific tax advantages. These are: in-specie transfers of UK equities into a life fund can be undertaken without paying stamp duty; there is no UK VAT charged on investment management fees as the Insurer is in the same VAT group as Schroder Investment Management Limited (the Investment Manager); and there is a full withholding tax exemption on US equities held within the Insurer s life funds and there may be reduced rates in other jurisdictions.

15 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 14 Where the Insurer s life funds invest in UK open-ended investment companies or UK authorised unit trusts, corporation tax may be paid in the underlying funds at 20%. Where this is the case, the Insurer s life funds can reclaim their share of the tax paid. Where life funds are invested overseas, foreign tax charges may be levied which are not always recoverable. The future basis and rates of tax may vary. Although every effort has been made to ensure the accuracy of the information in this document, we recommend you obtain your own independent advice from a qualified adviser as the Insurer is not permitted to give tax advice to policyholders. How is the Policy terminated or cancelled? As described above under How are units surrendered? Trustees may surrender units in part or in full at any time. A full surrender will usually lead to termination of the Policy unless you inform the Insurer of an intention to pay additional premiums. The policy is subject to cancellation rights and you will receive a notice of your legal right to cancel your policy ( Cancellation Notice ). You will then have 30 days in which you can change your mind by returning the correctly completed Cancellation Notice to the Insurer. If you exercise these rights the Insurer will return your premium free of all charges but less an amount equal to any fall in value (before charges) of the units allocated in respect of premiums paid. If you do not exercise your right to cancel within 30 days of receiving the cancellation notice the contract will become binding. Can the Insurer amend or terminate the Policy? The Insurer has the legal right to amend the Policy Document where external circumstances arise that make it impracticable or inequitable for the Insurer to give effect to any one or more of the provisions of the Policy. The Insurer will try to send you reasonable notices of such amendment. The Insurer may amend all or any of the provisions of the Policy and may terminate the Policy by giving at least three months notice in writing. What on-going information is available? When the Policy has been issued and a premium paid, details of the transaction can be obtained through our on-line systems E-Distributor and SchrodersLink on the day on which the units are allocated. You will also receive premium, switch and claim dealing instruction statements to retain for future use. We will send you regular reports showing transactions and valuations. Quarterly investment reports commenting on the investment performance of your chosen funds over the past quarter are available on request. We will also respond to any reasonable ad hoc requests for information and hold investment review meetings when requested to do so. Please contact your usual Client Director or Client Executive to request further information. Are there any other obligations? If you cease to be a registered pension scheme, you must inform the Insurer immediately.

16 15 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Further information Financial advice The Insurer does not provide advice on the suitability of investment transactions. This includes the suitability of the Policy. Trustees wishing to obtain financial advice, taking account of their specific circumstances, should speak to an independent financial adviser or consultant. Compensation The Insurer is covered by the Financial Services Compensation Scheme. You may be entitled to compensation from the Scheme if we cannot meet our obligations. This depends on your eligibility, the type of business, and the circumstances of the claim. For details of compensation arrangements, please contact the Financial Services Compensation Scheme at: 10th Floor, Beaufort House, 15 St Botolph Street, London EC3A 7QU. Telephone: Complaints If you are unhappy with any part of the service you have received or if you have any queries, you should contact your Client Director in the first instance, at: Schroder Pension Management Limited 31 Gresham Street London EC2V 7QA If you are not satisfied with our response you may, in certain circumstances, be able to refer the complaint to the Financial Ombudsman Service at South Quay Plaza, 183 Marsh Wall, London, E14 9SR. If you require any further information about our range of funds for Occupational Pension Schemes, please contact Schroders as follows: Telephone: Address: Website:

17 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 16 Key features effect of charges illustration The following table illustrates the effect that the deduction of fund charges will have on investment in the life funds. The table assumes: an initial investment premium of 1,000,000 an annual management charge (AMC) of 1% and other charges including service charges of 0.17%, meaning total on-going charges of 1.17% per annum that there are no up front charges that income is re-invested. The last two columns assume that investments will grow at 5% per annum. This is an indicative rate only, which we consider appropriate as a potential long-term growth assumption for funds which have a high equity content. Other types of fund are likely to achieve lower long-term growth rates. The actual rate of return on each life fund will vary based on the asset classes held within the fund and the performance of the relevant markets in which it is invested. The on-going charge used in the effect of charges table is the highest currently paid by investors in any available life fund (excluding the Matching Plus funds). The effect of charges will be less for other life funds as the on-going charges are lower. We can provide an effect of charges illustration at other (lower) growth rates and other on-going charge rates upon request.

18 17 Schroder Pension Management Limited Key Features of the Trustee Investment Plan At end of year Total paid in to date( ) Effect of deductions to date ( ) What you might get back at 5% p.a ( ) 1 1,000,000 12,200 1,030, ,000,000 25,500 1,070, ,000,000 39,900 1,110, ,000,000 55,600 1,150, ,000,000 72,500 1,200, ,000, ,000 1,440,000 What are the charges deductions for? The deductions cover investment management costs and service charges The last line in the table shows that, over a 10 year term, the effect of the total deductions could amount to 179,000 Putting it another way, this would have the same effect as bringing investment growth down from 5.0% a year to 3.8% a year.

19 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 18 Key Features Document Fund Data Multi-Asset Funds The tables below give details of the life funds including their investment objectives, on-going charges, and their specific risks. Fund Objective Risk Diversified Growth Fund Intermediated Diversified Growth Fund Managed Balanced Fund Dynamic Multi Asset Fund The investment objective of the Diversified Growth Fund is to invest in a broad range of asset classes to seek to generate a capital return of RPI +5% per annum over an economic cycle typically a five year period. However, there is no guarantee that this objective will be achieved and capital is at risk. Such asset classes may include equities, bonds, infrastructure, property, commodities and absolute return strategies. The Fund may invest in a wide range of investments including transferable securities, derivatives (for investment purposes and efficient portfolio management), deposits, collective investment schemes, warrants, money market instruments and cash. The investment objective of the Intermediated Diversified Growth Fund is to invest in a broad range of asset classes to seek to generate a capital return of RPI +5% per annum over an economic cycle typically a five year period. However, there is no guarantee that this objective will be achieved and capital is at risk. Such asset classes may include equities, bonds, infrastructure, property, commodities and absolute return strategies. The Fund may invest in a wide range of investments including transferable securities, derivatives (for investment purposes and efficient portfolio management), deposits, collective investment schemes, warrants, money market instruments and cash. The Fund gives a balanced exposure to UK and overseas equities and fixed income securities, through a range of underlying authorised unit trusts, recognised schemes and collective investment schemes. The Fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits and money market instruments. The Fund invests 100% in the Schroder Dynamic Multi Asset Fund. The fund s investment objective is to deliver positive returns over a market cycle based on long-term capital growth and income through investment in collective investment schemes as well as directly held transferable securities, derivatives, cash, deposits, warrants and money market instruments. The fund may gain exposure to alternative asset classes including but not limited to property, commodities, hedge funds and private equity directly where permitted or through investment in transferable securities and other permitted assets which themselves invest in these asset classes. A,B,C, D,E,I A,B,C, D,E,I A,B,C, D,E,H,I A,B,C, D,E,H,I # Ongoing Charges (series 1) % p.a

20 19 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Fund Objective Risk Schroder Life Flexible Retirement Fund The Schroders Life Flexible Retirement Fund aims to deliver returns of CPI +2% over the long term whilst also mitigating the risk of incurring a loss greater than 8% over any holding period. A,B,C, D,E,I # Ongoing Charges (series 1) % p.a Equity Funds Fund Objective Risk Managed Equity Fund ## Pacific Fund Global Equity Fund The Fund gives exposure to UK and overseas equities through a range of underlying authorised unit trusts, recognised schemes and collective investment schemes. The Fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits and money market instruments. The Fund invests 100% in the Schroder Institutional Pacific Fund. The fund s investment objective is to achieve capital growth. Income will be minimal. The fund will follow a highly active investment policy in all economic sectors in the Pacific region, excluding Japan and including, but not limited to, Australia, Hong Kong, Indonesia, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand. It is intended that the fund may also participate in other Asian stock markets which are not currently open to outside investors. The fund will invest in equities, warrants and convertibles of quoted companies with greater focus on the larger capitalised and better quality companies. The fund may also invest in a wide range of investments including transferable securities, collective investment schemes, warrants and money market instruments. The Fund invests 100% in the Schroder Institutional Global Equity Fund. This belongs to Schroders Global Diversified Equity strategy, which offers a fundamental research-driven approach aimed at delivering outperformance over the long term within the context of a risk-controlled framework. We focus on the best investment ideas that are identified by Schroders team of locally based Equity Analysts and our team of Global and International Equity Portfolio Managers and Global Sector Specialists. The Fund s investment objective is to achieve capital growth primarily through investment in global equities. The Fund may also invest in a wide range of investments including transferable securities, collective investment schemes, warrants and money market instruments. We aim to outperform the MSCI World Index by 2 2.5% per annum (gross of fees) over a rolling three-year period. Stock selection is our primary source of added value. A,D, E,I # Ongoing Charges (series 1) % p.a A,E 0.52 A,E 0.54

21 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 20 Fund Objective Risk Global Equity Alpha Fund Schroder Life Global Emerging Markets Fund QEP Global Active Value Fund QEP Global Blend Fund Schroders Global Equity Alpha strategy offers a fundamental research-driven approach aimed at delivering outperformance over the long term within the context of a risk-controlled framework. We focus on the best investment ideas that are identified by Schroders team of locally based Equity Analysts and our team of Global and International Equity Portfolio Managers and Global Sector Specialists. The Fund s investment objective is to achieve capital growth primarily through investment in global equities. The Fund may also invest in a wide range of investments including transferable securities, collective investment schemes, warrants and money market instruments. We aim to outperform the MSCI World Index by 3.5% per annum (gross of fees) over a rolling three-year period. Stock selection is our primary source of added value. The fund invests 100% in the Schroder Global Emerging Markets Fund. The Fund s investment objective is to achieve long term capital growth by investing in the emerging markets of the world. The Fund will invest in equity or equity related securities (including warrants and convertible securities) and fixed interest securities which provide exposure to emerging markets. The portfolio may also include shares in investment trusts and other closed end funds which are themselves dedicated to investment in emerging markets, as well as in securities of companies which, whilst listed on eligible stock exchanges, conduct a significant proportion of their business in emerging market countries and may, therefore, be expected to participate in their growth. Investment will be in directly held transferable securities. The Fund may also invest in collective investment schemes, warrants and money market instruments. The Fund invests 100% in the Schroder QEP Global Active Value Fund. Global Active Value is an index-unconstrained strategy targeting a long-run return of +3% per annum (gross of fees) over the economic cycle above the MSCI World Index. We use an innovative approach, through the application of quantitative investment techniques, based upon proven long-run investment criteria. The portfolio is broadly diversified and value biased. The Fund s investment objective is to provide a total return primarily through active investment in a value style biased portfolio of equity and equity related securities of companies worldwide. The Fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments. Global Blend, an index-unconstrained, highly diversified (400+ stocks) strategy, aims to produce a long-run return of +3% p.a. (gross of fees) above MSCI World (NDR) or comparable global indices by investing in a portfolio which combines both Value and Quality opportunities. Our aim is to offer investors the potential for greater consistency of outperformance across a broad range of market environments since these two drivers of long-term returns tend to perform at different stages of the market cycle. The Fund s investment objective is to provide a total return primarily through active investment in a blended value and quality style portfolio of equity and equity related securities of companies worldwide. The Fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments. # Ongoing Charges (series 1) % p.a. A,E, 0.71 A,E 1.09 A,D,E,I 0.67 A,D,E,I 0.68

22 21 Schroder Pension Management Limited Key Features of the Trustee Investment Plan Fund Objective Risk QEP Global Core Fund QEP Global Emerging Markets Fund Schroder Life Sterling Hedged QEP Global Active Value Fund The fund invests 100% in the Schroder QEP Global Core Fund. The fund aims to deliver consistent outperformance of 1.0% per annum (gross) against the MSCI World Index (NDR) in all major market environments. Stocks are evaluated using a diverse range of Value and Quality strategies. Portfolios typically hold in excess of 500 stocks in order to minimise the impact of individual holdings while other risks (country, sector, style and market direction) are carefully managed as part of the investment process. The result is a low index relative risk, core portfolio designed to produce consistent and repeatable performance. The Fund s investment objective is to provide a total return primarily through active investment in a value style biased portfolio of equity and equity related securities of companies worldwide. The Fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments. The Fund s investment objective is to achieve capital growth. The Fund will invest primarily in equity and equity related securities of companies in emerging markets countries. The Investment Manager will invest in a broadly diversified portfolio of securities selected through the application of analytical techniques that aim to achieve an optimal allocation between value style biased and quality style biased companies. The Fund may also invest in transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments. Global Value is an index unconstrained, diversified, value-based investment strategy designed to deliver higher long-run returns. Global Active Value is an index-unconstrained strategy targeting a long-run return of +3% per annum (gross of fees) over the economic cycle above the MSCI World Index. The Fund s investment objective is to provide a total return primarily through active investment in a value style biased portfolio of equity and equity related securities of companies worldwide. The Fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments. Currency forwards will be used to hedge currency risk. Since not all the currencies in which equities are purchased have liquid forward currency markets, an optimised basket of currencies to hedge will be used to proxy less liquid currencies with more liquid currencies of a similar risk profile. The Fund s investment objective is to exceed the performance of the MSCI World Index (Net dividend reinvested) through investing in an unconstrained manner mainly in equities of companies around the world quoted on recognised stock exchanges. Sterling currency risk will be managed at the discretion of the fund manager within the sterling hedged share class, but portions of the portfolio can remain unhedged if deemed appropriate by the fund manager. # Ongoing Charges (series 1) % p.a. A,E,I 0.37 A,E,I 0.92 D,E,I 0.70

23 Schroder Pension Management Limited Key Features of the Trustee Investment Plan 22 Fund Objective Risk Schroder Life Sterling Hedged QEP Global Blend Fund Specialist Value UK Equity Fund UK Equity Portfolio Global Blend, an index-unconstrained, highly diversified (400+ stocks) strategy, aims to produce a long-run return of +3% p.a. (gross of fees) above MSCI World (NDR) or comparable global indices by investing in a portfolio which combines both Value and Quality opportunities. Our aim is to offer investors the potential for greater consistency of outperformance across a broad range of market environments since these two drivers of long-term returns tend to perform at different stages of the market cycle. The Fund s investment objective is to provide a total return primarily through active investment in a blended value and quality style portfolio of equity and equity related securities of companies worldwide. The Fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments. The Fund s investment objective is to achieve capital growth and income primarily through investment in UK companies. The Fund invests 100% in the Schroder Specialist Value UK Equity Fund. The portfolio invests in UK companies across a broad range of sectors, and in companies of all sizes. We seek to identify stocks which trade at a substantial discount to their fair or intrinsic value and where we believe that profits growth will surpass expectations. We believe these stocks provide the most attractive investment returns over the long term. In order to exploit these behavioural biases in the market, we tend to be contrarian in our use of market overreaction with an emphasis on absolute return and a long-term view. The Fund may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments. The fund performance objective is to outperform the FTSE All Share index by 2.5% per annum (gross of fees) over rolling three to five year periods. This is an index-unconstrained UK equity portfolio, with a focus on high conviction ideas, which we believe should add value over the long term. The performance objective is to outperform the FTSE All Share index by 2 3% per annum (gross of fees) over rolling three to five year periods. The portfolio will invest across a broad range of UK companies in any sector, but with a selective focus on companies that have an attractive franchise and / or underlying assets, financial strength and flexibility, and with a management team with a strong track record. We weigh the merits of each company against the value in the share price on a variety of valuation measures. The portfolio may also invest in a wide range of investments including transferable securities, derivatives, cash, deposits, collective investment schemes, warrants and money market instruments. # Ongoing Charges (series 1) % p.a. D,E, I 0.71 A,G,H,I 0.77 A,D,G,H 0.50