With Profits

With-Profits Sub-Fund 1 (WPSF1)

This fund contains policies originally issued by Reliance Mutual, Burslem Mutual and Nation Life policyholders.

All insurers managing with-profits business are required to produce Principles and Practices of Financial Management (PPFM). This document sets out how we at JAB Life & Pensions operate our with-profits business, in each of the sub-funds.

Utmost Principles and Practices of Financial Management April 2026

The previous version of the PPFM can be seen here:

JAB Life & Pensions Principles and Practices of Financial Management PPFM April 2025

A note explaining the changes made at the last review can be found here:

A note explaining the changes made to the Principles and Practices of Financial Management

Every year the directors of JAB Life & Pensions report to with profits policyholders. In this report, the directors confirm that they have managed the business as required by the Principles and Practices of Financial Management (PPFM), and describe how they have done this. The report is reviewed by the With-Profits Actuary who adds their comments to it.

This is the most recent report from April 2026.

Directors' Report to with-profit policyholders April 2026

Our conventional with-profits business is written in four sub-funds. These each have separately identified assets, and are operated in slightly different ways.

• With-Profits Sub-Fund 1 (WPSF1) contains all the with profits business originally written by Reliance Mutual, Burslem Mutual and Nation Life.
• With-Profits Sub-Fund 2 (WPSF2) comprises the former Criterion Life Assurance with-profits policies.
• With-Profits Sub-Fund 4 (WPSF4) comprises the former Family Assurance Time Retirement Annuity with-profits policies.
• With-Profits Sub-Fund 6 (WPSF6) comprises the former Hearts of Oak Friendly Society with-profits policies.

Prior to October 2013, we had two further sub-funds, With-Profits Sub Fund 3 which comprised the former Time Assurance with-profits life business and With-Profits Sub-Fund 5 which comprised the former University Life Assurance Society business. When these sub-funds were established they contained provisions whereby, when the sub-funds became small, the policies could be converted to non-profit contracts with increased guaranteed benefits. The purpose of this change was to give policyholders added certainty as the funds declined. The conversion occurred on 1 October 2013 and at that time the assets and liabilities of the sub-funds were merged with our Non-Profit Sub-Fund (NSF).

Reliance Life acquired Reliance Mutual on 1 April 2018 and in the process all the funds managed by Reliance Mutual transferred to Reliance Life. In March 2019, Reliance Life re-branded under JAB Life & Pensions.

Over the years, Reliance Mutual acquired with-profits business originally written by other companies. The main transactions were:

All the business of Burslem Mutual Assurance Society was acquired and transferred into Reliance Mutual in 1962.

Reliance Mutual acquired The British Life Office Limited in 1958. We used British Life as a separate company to underwrite various types of without profits policies until 2004, when all its business was transferred into Reliance Mutual.

The Industrial Branch business of Nation Life Insurance Company was acquired and transferred into Reliance Mutual in 1971.

All the business of Criterion Life Assurance Limited was acquired in 2003 and transferred into Reliance Mutual in 2004.

The business originally written by Time Assurance Society and Templeton Life Assurance Limited, which had been acquired by Family Assurance Friendly Society in 1994 was in turn transferred into Reliance Mutual in 2004.

We acquired all the business of Eurolife Assurance Company Limited during 2005, and transferred this directly into Reliance Mutual.

In September 2006 we acquired the share capital of SEB Trygg Life (UK) Assurance Company. Initially we maintained this as a separate subsidiary company, having changed its name to RM Life Assurance Limited. In July 2007 we transferred this business into Reliance Mutual.

In May 2007 we acquired the share capital of University Life Assurance Society from its then current owner Equitable Life Assurance Society. In July 2007 we transferred this business into Reliance Mutual.

Also in July 2007, we acquired all the business of Hearts of Oak Friendly Society, which we transferred directly into Reliance Mutual. Hearts of Oak was Reliance Mutual's largest acquisition, involving in excess of £300 million managed on behalf of more than 60,000 policyholders.

In July 2008 a further small block of business previously written by Time Assurance Society was transferred from Family Assurance Friendly Society into Reliance Mutual.

A with-profits policy is designed to provide a benefit at some future time. This might be at the end of a fixed period - for example 25 years after the policy started. It might provide the benefit when you reach a certain age - perhaps 60 or 65. It might only provide the benefit when the life assured dies. There are two types of with-profits policies conventional with-profits policies and unitised with-profits policies.

Some policies provide a lump sum in cash when the policy benefit is due. If you would like to know exactly what benefit your policy provides, you can use one of the methods set out in the contact us page.

In order to receive the benefit, you pay us premiums. Most policies have regular premiums paid every month, but some have other ways of paying premiums. Some policies originally had regular premiums, which have now ceased.

In exchange for paying the premiums, a conventional with-profits policy promises a minimum guaranteed benefit - called the 'sum assured' or 'guaranteed benefit'. The unique feature of a 'with-profits' policy is that bonuses can be added to this minimum guarantee as the policy progresses.

With a unitised with-profits policy, your premiums purchase units in the fund at the unit price. Some policies guarantee that the unit price will increase at a minimum rate. Bonuses are added to unitised policies by increasing the unit price, and thus the value of your units.

Bonus updates are usually sent out in June each year.

1. To meet contractual obligations to policyholders in all reasonably foreseeable circumstances;
2. To treat policyholders fairly;
3. To manage the business in a sound financial manner and, in particular, to meet the tests of solvency and capital adequacy required by regulatory bodies.

They are additions to the benefits that are paid under the policy and are the way in which your policy shares in the profits of your JAB Life & Pensions with-profits sub-fund.

They can either be annual (reversionary) bonuses or final (terminal) bonuses.

A reversionary bonus may be added to the policy annually. Once added it cannot be reduced or taken away. However future bonus rates are not guaranteed and can be changed or removed at any time.

The annual bonuses will be paid in full on the maturity or contractual retirement date of your policy or on earlier death, provided you have paid all premiums due and have not altered your policy.

A final bonus is an additional bonus which may be paid on termination of the policy. This bonus is not guaranteed and can be changed or removed at any time.

A proportion of the annual and final bonus is also paid on the early termination of any life or pension policy when taking the proceeds or, for pension policies, when transferring them to another provider. The amount is determined when the event occurs.

Final bonus is also allocated to unitised with-profits policies by an increase in the unit price. As final bonuses are not guaranteed to remain unchanged, this means that part of the unit price is not guaranteed, and thus the unit price may be reduced in future.

At the time the business was transferred from Hearts of Oak to Reliance Mutual, with-profits benefits under conventional policies in WPSF 6 were re-structured. A portion of the guaranteed benefits was replaced by a special final bonus. This special final bonus is not guaranteed. The purpose of the benefit restructure was to improve the security and financial prospects of the fund, for the benefit of all policyholders.

Annual and final bonuses attaching to pensions policies are paid in the same manner as the basic benefit, that is as an addition to the basic guaranteed pension, open market option, cash payment or transfer value.

Life assurance policies receive the guaranteed sum assured together with any annual and final bonuses in cash when a claim arises or on the policy maturity date (if any).

The amount of bonus depends on the progress of the underlying fund in which premiums are invested. This depends mainly on the returns earned from the assets in which the fund is invested. Profits from all the business written in the fund are available to be distributed as bonuses.

In setting bonus rates, returns can be smoothed so that large short-term fluctuations in investment values are not reflected in payments. The aim is that policy benefits will be broadly similar year on year. Smoothing reduces the risk of you receiving a low payout if investment markets are low when your benefit is due to be paid. In exchange you won't receive the full benefit if investment markets are high.

The amount of total annual bonuses accumulated so far is shown on your Bonus Update. Bonus Updates are usually issued in May each year for most policies.

Annual Bonus

Annual bonuses increase the guaranteed benefits under with-profits policies. Annual bonus rates do not change often. When there is a need to change rates we introduce changes gradually, so that any change from year to year is small.

• For all sub-funds annual bonus rates are the same as last year, the rates are set out above.
• Annual bonuses had been set to zero for with-profits policies in WPSF6 before these policies were acquired by Reliance Mutual. Unless there are significant changes in the investment returns available from fixed interest securities, it is unlikely that annual bonuses will be reintroduced in future for this sub-fund.

Final Bonus

Final bonuses are used to determine the overall level of policy payouts. Final bonus rates are reviewed twice a year and changed on 1 October 2026 for all with-profits sub-funds. The following figures compare the payouts from 1 October 2026 with those payable on 1 April 2026. Final bonus amounts are not guaranteed and can be changed at any time.

WPSF1: payouts have increased by 0.9%

WPSF2: payouts have increased by 1.5%

WPSF4:

• payouts have remained unchanged
• bonuses for annuities in payment have remained unchanged

WPSF6:

• 100% of special bonus and non-guaranteed bonus continues to be paid
• payouts for conventional contracts have increased by 3%
• bonuses for annuities in payment have not changed
• policy values for unitised with-profits policies have increased by 0.6% for life contracts and 1.2% for pension contracts (payouts may increase by a lower rate if the policy guarantees apply)

Past performance is not necessarily a guide to the future.

Your premiums are combined with those from all the other policyholders in your sub-fund and are invested in a wide range of securities including:

• Fixed interest securities
• Cash deposits
• UK Shares (WPSF6 only)
• Overseas shares (WPSF6 only)

The expenses charged to your with-profits fund are on a basis that was established at the time the fund was transferred to the Company (or to Reliance Mutual) and are subject to inflationary increases.

If you are unable or do not wish to continue paying premiums to your policy, it is normally possible for a cash value to be paid on a life assurance policy. If you cash in your life policy you will no longer retain this life cover and therefore should consider if you have, or need any other suitable life cover in place. Under a pension contract, it is not normally possible, under current tax rules, for a cash value to be paid if you are aged under 55, although you can transfer the value of your policy to another pension provider. If you are aged 55 or above then it is possible to access your pension fund benefits.

When we calculate early termination values, we try to treat policyholders terminating on a basis that is consistent with and fair to those policyholders who remain in the fund.

For unitised with-profits policies the early termination value is the value of units allocated to the policy. This value may be reduced by a market value reduction factor ("MVR"). MVRs are designed to ensure that policyholders leaving the with-profits fund receive a fair share of the fund, and neither advantage nor disadvantage the remaining policyholders. At times it is not necessary to apply an MVR.

• Industrial Branch policyholders, typically where premiums were collected in person by an agent, do not generally receive annual bonus updates. The main contact was traditionally between the agent who called at the door to collect premiums, and thus was able to answer questions face to face. The nature of this operation has changed, and we are giving consideration to sending bonus information by post at some time in the future.
• Annual notifications of bonus are also not normally sent in respect of annuities in payment, unless the amount due to be paid changes.
• Only with-profits policies receive bonuses. You may have a non-profit or unit linked policy.
• If you used to receive bonus updates, it may be that we no longer hold your current address. You can get in touch with us to update your address by calling us on 0330 159 1530 or by writing to us at Customer Services, JAB Life & Pensions Limited, Walton Street, Aylesbury, Bucks, HP21 7QW. Calls may be recorded for training and monitoring purposes.

• JAB Life & Pensions may close a with-profit fund if the total assets in the fund goes below a threshold. The threshold is £25m for WPSF 1, WPSF 4 and WPSF 6, and £10m for WPSF 2.
• WPSF1 and WPSF2 have now met this threshold
• If JAB Life & Pensions decides to close a with-profits fund, which will only be done if the Board is satisfied that this course of action is in the best interests of the policyholders in the fund, all the policyholder benefits will become guaranteed and would be transferred into JAB Life & Pensions' main Non Profit Fund (NPF).
• The decision to close a with-profits fund is taken by the Board on the advice of the With-Profits Actuary and With-Profits Committee of the Company and policyholders would be notified appropriately.

When WPSF3 and WPSF5 were established in 2004 and 2007 respectively, the High Court agreed to arrangements that enabled the sub-funds to be wound up once they had declined to less than a certain size. We decided to wind up WPSF3 and WPSF5 with effect from 1 October 2013, as the trigger points for wind up had been passed. We felt that the risk of a small fund having significant and frequent revisions to bonus rates was high and that it would be advantageous to policyholders to have certainty as to the amount their policies would pay out.

We therefore replaced the non-guaranteed and uncertain future bonuses on the with-profits policies in these sub-funds with a guaranteed policy value. Having done this there is no need to keep a separate fund of assets and liabilities as all policy payouts are guaranteed by JAB Life & Pensions as a whole. WPSF3 and WPSF5 were therefore merged with our main non-profit sub-fund, the Ordinary Sub Fund (OSF).

With-profits policyholders in WPSF3 and WPSF5 have been advised of the guaranteed benefits now attaching to their policies.