The with-profits 90:10 fund shares out its profits and losses to policyholders and Zurich. Policyholders receive 90% and Zurich 10%. The fund invests in fixed and variable interest investments, shares, property, cash and more complex financial instruments.
Our glossary of with-profits terms can help with some words or phrases you may not be familiar with.
The mix of investments varies between groups of plans. The asset mix for unit linked plans is shown below. The investment mix has not changed significantly during 2011 and there are no current plans to significantly change the asset mix in 2012.
We seek additional income by selling some fixed interest assets with an agreement to buy them back and using the proceeds to buy variable rate bonds. This is known as a Sale and Repurchase agreement. The asset mix shown above is calculated net of the liability to repurchase the fixed interest assets held in connection with the Sale and Repurchase agreement.
Follow these links to find out more about assets we invest in:
The return achieved by the assets allocated to unit linked plans in 2010 was 12.4% before tax and charges. This return is applicable to pension plans but reduced to 10.2% for life and investment plans before charges because of the tax we have to pay. The charges for managing the fund were approximately 0.5%.
Previous performance figures
Before tax and charges
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
|
-3.1% |
-3.7% |
6.1% |
9.1% |
10.6% |
4.6% |
6.0% |
-0.4% |
9.0% |
12.4% |
After tax
|
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
|
-2.0% |
-2.4% |
5.3% |
7.8% |
8.8% |
4.2% |
5.4% |
-0.1% |
7.3% |
10.2% |
We send information to customers each year about the fund performance and the bonus applicable to their plan.
The 2011 bonus booklet, sent to customers during March 2011, shows more information about the 2010 fund performance.
The rates below were declared on 9 January 2012.
Series 1 EP (excluding Offshore Series 1): The price of units in this series changes every day as it’s calculated with reference to the value of the underlying fund. The unit price includes the adjustment which for other series is made by adding final bonus or applying an MVR. There is a guaranteed minimum price, which applies on your selected retirement date and during 2012 it will increase by 1.75%. The guaranteed minimum price at 30 December 2011 was 316.7p. The price at which units were sold on 30 December 2011 was 496.5p.
|
Life Plans excluding Investment Bonds |
|
Fund Series |
Regular Bonus |
Current Final Bonus † |
|
2 EL |
3%* |
40% |
|
2a EL |
1%* |
44% |
|
2b EL |
1%* |
16% |
|
3 EL |
1% |
59% |
|
3b EL |
1% |
16% |
|
Investment Bonds |
|
Fund Series |
Regular Bonus |
Current Final Bonus† |
|
2 EL |
3%* |
37% |
|
3 EL |
1% |
53% |
|
Pension Plan excluding Trustee Investment Plans |
|
Fund Series |
Regular Bonus |
Current Final Bonus† |
|
Offshore 1 EP |
4%* |
3% |
|
2 EP |
4%* |
3% |
|
2a EP |
1.4%* |
39% |
|
2b EP |
1.4%* |
18% |
|
3 EP |
1.4% |
31% |
|
3b EP |
1.4% |
18% |
|
7 EP |
4%* |
3% |
* This includes the minimum growth rate.
† Final bonuses or MVRs do not apply to Series 1 (other than Offshore Series 1). The rate of any final bonus or MVR is periodically reviewed and changes from time to time so each generation of investors receives their fair share of the fund's performance. This is calculated by comparing the value of the plan's share in the fund based on fund performance (the 'asset share') which includes bonuses added since the plan started.
Now the fund is closed, we aim to give all remaining investors a fair share of the estate. The estate is the part of the fund we can use to help maintain bonus rates in poor times and to meet unexpected payments. For 2012, unless plan guarantees are higher, we will include in the final bonus rate an estate distribution of 2% of asset share for investors leaving the fund. This rate can change at any time and may cause significant changes in plan values. A final bonus increases the total value of the with-profits units in that series. Many plans have a date on which we guarantee not to apply any MVR. This date will be shown on your yearly statement, although since 6 September 2010 we have not applied an MVR to any withdrawals from, or cancellations to, plans investing in the with-profits funds.
There are two guides:
» Full manual - The ‘Principles and Practices of Financial Management’ (PPFM) shows how we manage the money in the with-profits 90:10 fund. This was last updated in January 2012.
» Summary of the full manual. This was also last updated in March 2011.
Zurich Assurance Ltd has to tell its with-profits policyholders each year if it has complied with its obligations in the PPFM (Principles and Practices of Financial Management). It does this through the annual report (last published in June 2011, next issue due June 2012) from the Board of Directors, including a separate report from the With-Profits Actuary on Zurich Assurance Ltd's compliance with the PPFM. In preparing the report, the directors seek the view of the independent person.
It is the opinion of the board of directors that during 2010:
- the company has complied with its obligations in the PPFM
- the way discretion was exercised was appropriate
- competing or conflicting rights, interests or expectations were addressed in a reasonable and proportionate manner.
The report contains further information on this, particularly for bonus rates, investment strategy, surrender values, expenses and charges, changes to the PPFM and customer communications. (You may wish to refer to the PPFM for the definition of technical terms)
