WIXLIB

August 2021Description of FundsRisk factorsDifferent Funds invest in different types of assets. ForThe following risks apply to all of our Funds:example, some invest directly in the stock market, othersonly invest in property and others invest in a wide range ofMARKET RISKassets including other Collective Investment SchemesThe value of any investment and any income taken from it(“CIS”). Usually, Funds with more potential for growth carryis not guaranteed and can go down as well as up. You maymore risk. Please note, in addressing currency risks in theget back less than the amount you originally invested. TheFunds, for both PMC’s Fund Specific Risks and the SORPdegree of investment risk depends on the Funds youcurrency risk disclosures, in this document we look at thischoose.from the perspective of a sterling-based investor andassume investment in the unhedged versions of the relevantFunds. Some Funds may employ GBP or EUR currencyhedging as a means of protecting the Fund’s value againstcurrency movements for sterling and euro investorsrespectively. In extreme market conditions, the hedge maynot be perfect and there may be some exposure to currencychanges.Risks that are specific to a Fund are listed as part of theFund’s details denoted by a series of numbers. Each ofthese numbers relates to a specific risk that is associatedwith the Fund. You should match the numbers shown foreach Fund with those listed in the Fund specific riskdefinitions, which you will find at the back of this documenton page 196. Where the objective of the Fund is achievedby way of investment in an L&G Group CIS PMC’s riskwarnings have been applied as far as practicable. Risksdenoted with an * apply to the Underlying Fund described inthe Fund’s description and not to the Fund itself. For adefinitive guide to the risks associated with these UnderlyingFunds please refer to the respective CIS prospectus.PERFORMANCE RISKThe return from your investment is not guaranteed andtherefore you may receive a lower or higher return than youanticipated. Past performance is not a guide to the future.There will be a variation in performance between Funds withsimilar objectives due to the different assets selected.CHARGES AND TRANSACTION COSTS RISKSIn addition to any explicit fees that are levied by PMC inrelation to the provision of this policy, each Fund will incurtransaction costs associated with the purchase and sale offinancial instruments. This can include an explicit basis pointtransaction charge levied by executing brokers; an implicitspread levied by executing brokers when quoting to buyfinancial instruments from the portfolio on a bid basis orquoting to sell the same instruments to the Fund on an offerbasis; and a transaction processing charge levied by thecustodian for settling the trade. Implementation shortfall canalso be incurred, which is generally defined as the changein the price of a financial instrument between the point intime at which the investment manager raises a transactionand the point in time at which transaction is executed.PMC’s charges and associated transaction costs are subjectto change, with notice for the former and without notice forthe latter. Charges and transactions costs deducted from thepolicy reduce your potential for capital growth in the future.TAX RISKTax rules and the treatment of income and capital gainscouldchange inthefuture andmaybeappliedretrospectively.INFLATION RISKInflation reduces the purchasing power of money over timeas the cost of purchasing goods and services increases. If8

August 2021Description of Fundsthe rate of inflation exceeds the rate of return on yourportfolio, it will erode the value of your portfolio and itsinvestments in real terms.LIQUIDITY RISKIn extreme market conditions it may be difficult to realiseassets held for a Fund and it may not be possible to redeemunits at short notice. We may have to delay acting on yourinstructions to sell or the price at which you cancel the unitsmay be lower than you anticipated.POLITICAL RISKThe value of a Fund’s assets may be affected byuncertainties that affect the behaviour of markets. Examplesinclude, but are not limited to; international politicaldevelopments, market sentiment, economic conditions,circumstances where markets are not allowed to freelymove (in the absence of government controls), changes ingovernment policies, restrictions on foreign investment andcurrency repatriation, currency fluctuations and otherdevelopments in the laws and regulations of countries inwhich investment may be made.CUSTODIAN RISKEach Fund's non-cash assets are (with the exception ofproperty) held with independent custodians to reflect PMC’sproprietary rights to those assets under trust law, and hencewould not be lost in the event of the custodian’s insolvency.The custodians are entitled to appoint sub-custodians locallyoverseas and remain legally responsible for the actions ofthe sub-custodians as if they were the custodian’s ownactions, as well as being obliged to use reasonable skill andcare in selecting the sub-custodian. Wherever possible,non-cash assets are held by custodians and sub-custodianson a segregated and not an omnibus basis. However, in theevent of the failure of sub-custodian there is a residual able. For cash left on deposit with PMC’scustodians, the relevant custodian will hold this as bankerand the Fund is exposed to cash deposit losses on thefailure of the custodian. PMC seeks to mitigate this risk onbehalf of its policyholders by sweeping cash (whereappropriate) overnight into the LGIM Sterling, US Dollar andEuro Liquidity Funds (above a de minimis level).You should make sure you understand the risk factorsand Fund specific risks, and are willing to accept them,before dealing in a Fund.9

August 2021Description of FundsAdditional information about theFundsFUND CHARGES Investments in certain Funds within the Real AssetThe on-going charges consist of a policy charge, plus an adFund range incur asset specific charges. For morevalorem fee.information please refer to page 146.The policy charge is a flat amount per annum and is leviedbased on the offer value of the units held on the first DealingDay in January each year. It is payable quarterly in arrearsand can either be invoiced or deducted by cancelling units.The ad valorem fees are not captured in this document.Please refer to your proposal documentation for the specificcharges for each PF Section applicable to your scheme.Please contact your LGIM representative for specificcharges for each Fund.The ad valorem fee is based on the average value of thepolicy’s holdings;Where possible an indication of the current rate of expensesis detailed in the fund description.For policyholders which are trustees of defined contributionpension schemes where each member pays towards theinvestment charges, we also offer a range of Funds pricedto include the ad valorem charge. These are identified withinthis document with “charges included” as defined on page7.There are currently no initial or surrender charges.A fee scale applies for certain Funds, which is detailed in theProposal/Supplemental Proposal. On a dealing price basis in the daily dealt FundsFUND SPREADS On an offer price basis in the weekly dealt FundsFor weekly dealt Funds units will normally be allocated atFor the majority of Funds PMC’s custody and index licencefees are included within the ad valorem fee and are notincurred by the Fund. Similarly, any costs incurred throughthe appointment of LGIM for fund accounting and unitregistration services, are met from the ad valorem fee andare not borne by the Funds themselves.the offer price and surrendered at the bid price. The spreadson the Funds take into account the typical cost of trading inthe underlying assets including any brokers’ commissionand local taxes. The spreads will vary according to marketconditions. Where Funds invest in other PF Sections thespreads applied reflect the weightings of the underlyingFunds.Certain Funds will incur expenses in addition to the advalorem charge. These include:All weekly transactions will be eligible for matching under thematching policy. For further details please refer to the Funds identified as “On Fund Charges” (“OFC”) in thisPooled Fund Policy Standard Conditions and Operationaldocument have these fees and expenses deductedProcedures Sheets.from the unit prices. For daily dealt Funds allocations and surrenders which takeSome funds, typically those that have indirect exposureplace on the same Dealing Day, within the same Fund andto investments by way of a holding in a Collectiveat the same pricing point (i.e. daily close or daily midday) willInvestment Scheme (“CIS”), are subject to expenses inbe effected at the same price. That price will be the offerrelation to the underlying fund.price if there is a net inflow to the Fund or the bid price ifLegal or tax fees in respect of claims made for a Fundthere is a net outflow from the Fund, i.e. following a swing(see Value Enhancement Services below).pricing methodology. For certain Funds, which invest solelyin other PF Sections, the spreads may be adjusted to reflect10

August 2021Description of Fundsthe benefits of the swung prices. See further note belowwidely and publicly available due to one or more of theregarding swing groups.features described above.Fund spreads are not captured in this document. For anIn addition, due to the absence of certain middayindication of recent spreads applied to the Funds pleasebenchmarks, for performance purposes a suitable proxy,contact your LGIM representative.where available, will be used to allow for asset price andSWING GROUPSFor daily dealt Funds (close of business or midday) Fundscurrency movements. The daily midday Funds where this isapplicable mirror the unit pricing methodology codes c, e orf.may form a ‘swing group’ for unit pricing purposes.Examples of Funds that may be grouped for this purposeWith effect from January 2018 new European Unionare:Benchmarks Regulation has been introduced which aims toensure the accuracy and integrity of benchmarks. The GBP currency hedgedregulation requires PMC to utilise indices or benchmarks EUR currency hedgedthat are provided by authorised benchmark administrators.There is a transitional period in place which requires existingIn addition, in certain circumstances, a Fund may bebenchmark administrators to obtain authorised status byincluded in a swing group where it is held by another PFJanuary 2020. Unless disclosed elsewhere in this documentSection and there is a close correlation with the assets heldall of the indices/benchmarks used by the PF Sections aredirectly by that Fund.provided by benchmark administrators who are currentlyavailing of this transitional period and expect to be fullyPlease note that “Net WHT” versions of Funds will not beauthorised and registered in advance of the January 2020included in a swing group, but may form their own group withdeadline. Accordingly, these indices/benchmarks may notother versions of “Net WHT” Funds.currently appear on the register of administrators andbenchmarks maintained by the European Securities andWhere Funds are grouped into a swing group the cashflowMarkets Authority (“ESMA”).to each Fund is amalgamated for the purpose of determiningthe net cashflow and the price for all Funds within the groupNOTIONAL INCOME SERVICEwill be swung in the same direction accordingly.PMC operates accumulation units only; however, thePERFORMANCE BENCHMARKSThe benchmarks detailed in this document are the referencebenchmark for a group of Funds. Performance for each ofthe individual Funds will be measured against the relevantversion of the benchmark which takes into account theimpact of tax, currency hedging and charges as applicable.For some Funds the withholding tax rates applied to theindex by the index provider are higher than those the Fundincurs. Where this is the case this will be detailed on therelevant factsheet.Typically, these benchmarks are calculated and provided bya third party index provider. For some Funds the benchmarkmay be a composite which is calculated based on theweightings, either fixed or market weighted, of severalpublished benchmarks.The performance figures for benchmarks that are quoted inour literature may therefore differ slightly from those that areNotional Income Service (“NIS”) allows policyholders todraw a regular income from the weekly price series ofselected Funds by redeeming units in the Fund at theprevailing Mid Price. The amount of income is determinedby PMC and is based on the average actual incomereceived by the Fund over the previous twelve months. NISis offered from Funds which invest across a range of assetclasses including those that hold UK and overseassecurities.Where exposure is gained indirectly throughinvestment in an underlying Fund, NIS is availableproportionately based on the NIS rate of the underlyingFund. Funds offering the NIS facility are identified in theFund’s description in this document.Policyholders who elect to participate in NIS provide aregular standing instruction to receive income from theirselected Funds. On the first Dealing Day of each month thecalculated amount of income available under NIS will bepaid automatically to each participating policyholder to either11

August 2021Description of Fundsthe nominated bank account or the designated Liquiditythe issue of new stock the Fund receives income inFund(s).exchange for agreeing to buy a pre agreed number ofshares in the stock at fixed price in the event that theSemi-Annual Incomenew issue is not fully subscribed for. The Fund wouldInvestors in Funds that are exposed to a single stock gilt cannot underwrite a substantial proportion of any newmake income redemptions on semi-annual basis on the firstissuance. All income, less expenses, generated fromDealing Day following receipt of the underlying couponthis activity is re-invested into the relevant Fund for thepayment.benefit of the policyholdersDistribution Funds Group securities related litigation - Occasionally,Certain Funds are exposed to a distribution share class ofLGIM may suggest that PMC enters into group litigationthe underlying Collective Investment Scheme (“CIS”). Anyas a claimant in relation to securities held by PMCincome distributions received by these Funds will be paid toFunds. PMC will assess the any material risks and costseach investors’ nominated bank account on the first Dealing(including potential adverse costs or irrecoverable costsDay following receipt.in the event of success) in proceeding and, in the eventthat PMC considers such activity to be in the interestsNIS is an enhanced offering which replaced the Notionalof the policyholders, may elect to participate. AnyDividend Income Payment (“NDIP”) programme in Januaryjudgement or settlement proceeds from successful2020.claims, less 10% which will be retained by PMC, will beapplied to the relevant FundParticipants in the NIS programme reduce their total unitholding in the Fund and therefore the prospects for capital growth.US Class Action settlement proceeds – LGIM claimson behalf of relevant PMC Funds in US (and otherjurisdictions with similar non-participatory recoveryPlease contact your LGIM representative for indicative NISmechanisms) class action settlements (where othersrates and further details of the calculation methodology ifhave litigated and a settlement pool has beenrequired.established whereby any eligible class members canclaim regardless of participation), and any successfulVALUE ENHANCEMENT SERVICESrecoveries less 10% which will be retained by PMC, willPMC may, at its discretion, but subject to the investmentbe applied to the relevant Fundobjectives of the relevant Fund, undertake additionalactivities in relation to the underlying assets in order to Additional withholding tax reclaims – Where PMCgenerate additional income for a Fund. These includebelieves it is eligible, and it would be in the interest of the Fund to do so, it will seek to reclaim additionalStock lending - whereby a Fund's assets may betemporarily used by counterparties in return for a fee.The stock lending programme is run by PMC’scustodian, Citibank, as an agent of PMC who will levy acharge based on the volume of revenue raised, whichwill be deducted at source. All income, less expenses(including the agency charge), generated from thisactivity is re-invested into the relevant Fund for thebenefit of the policyholder. Where cash is accepted ascollateral for stocks on loan, a proportion may beinvested in LGIM Liquidity Funds on which LGIMreceives a management fee. Underwriting - PMC may approve underwritingissuance of new stock for a Fund which would be anatural holder of the stock once issued. By underwritingdividend withholding tax. Claims may represent a fullexemption or a reduced rate of tax depending on theindividual circumstances and markets involved. Suchopportunities may arise from either historic marketclaims or through successfully entering into new taxtreaties. Any settlement proceeds from successfulclaims, less a proportion representative of PMC’sexpenses in pursuing the claim, will be applied to therelevant Fund. In the event of a surrender of units fromsuch a Fund, in accordance with the Pooled Fund nding to tax accruals until such time as thereclaim from the relevant tax authorities are received.Accruals for tax reclaims are only made in marketswhere PMC is confident that the claim will be12

August 2021Description of Fundsrecognised, however it should be noted that PMC hasAR), that is holding an uncommitted cash balance. The Fundno control over the timing that any reclaims will bethat lends accrues interest from the Fund that borrows.remitted to it from the relevant authorities.DERIVATIVE USAGECASH MANAGEMENTWhereAll sterling denominated Funds with the exception of PFtransactions as part of efficient portfolio managementSection AR (Cash F

Multi-Asset Bond Funds 171 Target Date Funds 174 Liability Driven Investment Fund Range 179 Matching Plus Funds . lifespan and others are intended to be held until maturity Some Funds are not available to new clients or have . Net WHT status as defined above SORP DISCLOSURES Funds have been assigned 'fair value determination of