Ex-Friends Life Group Managed Funds - Technical Information For Trustees

April 2018 for advisers and trustees only

Unit prices

For each dealing day, the unit price of each of the funds will be calculated based on the middle market prices of the underlying investments where applicable, less the management charges described below. In the case of the Aviva Pensions GM Property Pension Fund, the underlying investments are valued based on the most recent valuation made by an independent party assigned to value these assets.

The Aviva Pensions GM Cash Pension Fund will be valued on the aggregate of deposits, including accrued interest, together with the discounted values to maturity of any Treasury bills or certificates of deposit held.

To ensure that existing policyholders are neither advantaged nor disadvantaged by transactions in the units, all purchases and sales of units (including switches between funds) take place at the unit prices adjusted upwards for the expenses of purchases or downwards for the expenses of sales. These expenses are calculated by Aviva Investors and AXA Investment Managers on behalf of Aviva based on actual dealing expenses of the funds. The current percentages are shown in the table below.

Fund Buying % / Selling %
Aviva Pensions GM Mixed Pension* Buying 0.00 / Selling 0.00
Aviva Pensions GM UK Equities Pension Buying 0.00 / Selling 0.00
Aviva Pensions GM UK Equities Focus Pension Buying 0.00 / Selling 0.00
Aviva Pensions GM Overseas Equities Pension Buying 0.00 / Selling 0.00
Aviva Pensions GM Global Equities Pension Buying 0.00 / Selling 0.00
Aviva Pensions GM North American Equities Pension Buying 0.07 / Selling -0.05
Aviva Pensions GM European Equities Pension Buying 0.00 / Selling 0.00
Aviva Pensions GM Japanese Equities Pension Buying 0.02 / Selling -0.02
Aviva Pensions GM Asia Pacific Ex Japan Equities Pension Buying 0.25 / Selling -0.29
Aviva Pensions GM Sterling Bond Pension Buying 0.00 / Selling 0.00
Aviva Pensions GM Sterling Index Linked Pension Buying 0.00 / Selling 0.00
Aviva Pensions GM Property Pension Buying 5.17 / Selling -1.53
Aviva Pensions GM Cash Pension Buying 0.00 / Selling 0.00

* The expenses for the Aviva Pensions GM Mixed Pension Fund will vary depending on their holdings in the underlying specialist funds. We will review expenses at least every quarter.

Other expenses

All custodian fees and bank charges are charged directly to the funds, with the exception of UK government bonds (gilts), where these are paid directly by Aviva Investors or AXA Investment Managers.

Dealing instructions

Instructions to deal in the funds and any associated payments must be received by our Administration Unit based in Bristol by 9am on the specified dealing day. No instructions will be accepted after this time. Details of prices and transactions will normally be posted to Trustees within three working days of the dealing day (four working days on month end). Payments made by telegraphic transfer must be previously notified to Aviva in writing so as to ensure that they can be applied in accordance with the Trustees’ instructions at the next available dealing day.

Management charges

Before calculating the unit prices of the funds on each dealing day, an amount in respect of the management charges accrued since the last dealing day are deducted from the assets. They are expressed as a percentage of the total assets of the funds on the dealing day. The management charges are accrued on a daily basis at the current annual rates shown in the table. These charges may be varied by Aviva from time to time in accordance with the policy document.

Fund Rate of fees %
Aviva Pensions GM Mixed Pension 0.30 pa
Aviva Pensions GM UK Equities Pension 0.35 pa
Aviva Pensions GM UK Equities Focus Pension 0.50 pa
Aviva Pensions GM Overseas Equities Pension 0.40 pa
Aviva Pensions GM Global Equities Pension 0.40 pa
Aviva Pensions GM North American Equities Pension 0.40 pa
Aviva Pensions GM European Equities Pension 0.40 pa
Aviva Pensions GM Japanese Equities Pension 0.40 pa
Aviva Pensions GM Asia Pacific Ex Japan Equities Pension 0.40 pa
Aviva Pensions GM Sterling Bond Pension 0.25 pa
Aviva Pensions GM Sterling Index Linked Pension 0.20 pa
Aviva Pensions GM Property Pension 0.60 pa
Aviva Pensions GM Cash Pension 0.05 pa

Minimum investments

New clients’ minimum investment is £100,000 (net new premiums) in the first year of the scheme.

Existing clients’ switches between funds are free of charge subject to a £10,000 minimum value for each fund switched. Where the amount switched from any one fund is less than £10,000, there will be a £50 administration charge deducted from the amount switched from each such fund. Where the switch is into more than one fund, the amounts to be invested will be reduced on a proportional basis to reAviva Pensionsect the administrative charge deducted from the fund switched, unless otherwise directed by the client prior to the dealing day deadline.

There is no minimum value for additional investment in the same fund.

Withdrawals

Aviva wishes to be as Aviva Pensionsexible and as co-operative as possible in respect of large disinvestments. However, in order to protect existing policyholders, Aviva reserves the right to either defer encashment of units or to spread encashments of units over more than one dealing day. Currently, we intend to apply this right where units are sold other than to provide immediate benefits for individual members and, except as otherwise provided by Aviva, where the sale from any one fund exceeds £1,000,000 (£250,000 in respect of the Aviva Pensions GM Property Pension Fund).

In the case of deferment, this would be to the next but one dealing day after receipt by Aviva of the signed authorisation. Where encashments are spread over dealing days, this period would normally not exceed 12 months.

Any decision in this respect will be at Aviva’s discretion and will be communicated to Trustees prior to the dealing day.

Aviva will require all Trustees to authorise an instruction to surrender the policy.

Settlement

Payment in respect of unit encashments will be made to the Trustees unless otherwise directed by the Trustees in writing. Settlement will be made within five working days of the dealing day. Only payments over £100,000 may be made by telegraphic transfer at the Trustees’ request.

Collective investment schemes

The funds may invest in other collective investment vehicles including those operated by Aviva. In the latter case arrangements are made within Aviva so that the effective rates of annual management charges are as described previously.

Derivatives and warrants

With the growth in derivative markets and the greater Aviva Pensionsexibility they can provide, it may be appropriate to use derivative instruments. These include futures, options, contracts for differences and forward foreign exchange contracts. Derivative instruments will only be used for efficient portfolio management or the reduction of investment risk. However, the use of derivatives may diminish returns or make returns more variable than they otherwise would have been. The funds may also invest in warrants which have similar characteristics to those of derivatives.

Fund descriptions

Descriptions of the funds and the assets in which they are or will be invested are contained in the relevant Fact Sheet for each fund, which are available on request from Aviva. However, whilst the investment manager aims to achieve the investment objective described for each of the funds, no guarantee of investment performance can be given.

Alterations

Aviva reserves the right to alter any of the above terms and in particular, to increase either the scales of dealing expenses or the management charges. In the case of management charges, 30 days’ notice in writing of the changes will be given.

Full terms and conditions for all fund scheme’s detailed above are contained in the Friends Life Limited policy document, copies of which are available on request.

This information is for Trustees of ex-Friends Life Group Managed Funds and their advisers only. It should not be distributed to, or relied upon, by other retail clients.

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