Merger Talks End

For most of 2009, the Friendly Society has been in talks with Police Mutual about a possible merger.

The original proposed terms encouraged us to go public with an announcement at the end of February, and we updated our members in May and July. To meet the timetable required both sides to agree terms by early July – but even extending this deadline did not enable the parties to conclude terms which each felt was in the interest of its membership.

By the start of September, it was clear that we could not proceed with the Special General Meeting planned for 14 October, and that it was virtually impossible to meet the target merger date of 1 January 2010. Your Board weighed up the terms then on offer, considering the interests of members and other stakeholders in the Society, the views expressed at our consultation meeting in May, and the time and resources required to focus on the merger instead of on business development. We concluded that it was not in our members’ interests to proceed with the merger.

Returning Capital To Our Members

Our capital is the amount by which our assets exceed our liabilities. For many years, we have had more than sufficient capital to run the business. We have used some of that capital to top up the investment return that we credit to our members – effectively increasing our liabilities whilst still retaining a sufficient
surplus to run the business.

If the merger had proceeded, we were proposing to return the remaining capital to members in 2 ways – a one-off windfall payment and increased pay-outs on savings and investment contracts. Now that the merger has been ruled out, our intentions are a little different. We will continue to top up the investment return (for so long as we can do so safely); and we will increase the pay-outs beyond current levels – to give 2 examples

• A jump of about 3% for 5 year plans maturing in 2010,
  
• A jump of 5% for with-profit bonds cashed in after 10 years.

We will retain more capital in the fund than if we had proceeded with the windfall payment. That will enable us to maintain a higher exposure to the equity market. Historically that has been the source of the best investment returns; and recent market movements suggest that equities are now in a recovery phase.

Increasing our Membership

We have had a good year for new business. Overall it is up on 2008 and we have achieved outstanding results on lump sums invested in our ISA - already £1.3 million in 2009 against £0.7 million in the whole of 2008. We hope that the new ISA limits will enable us to build on this success.

We have welcomed more new members than last year and are pleased that many of our new members come from recommendations and to encourage this further we have introduced a member-get-member incentive. Introduce a new member - whether they be colleagues or a close relation - and you will both get a Bobby Bear.

Membership of the Friendly Society is open to the wider Police Family (click here).

Please remember that even in retirement you can continue investing with your Friendly Society.

Even if you are not listed above, please give us a call because you still may be able to become a member.

Great deals on your large investments

Are you wondering how to invest your commutation or tax-free lump sum? Or do you have an inheritance looking for a good home? The Friendly Society can help.

At the moment, we are offering 101% investment for lump sums in excess of £25,000. This can be shared with your partner – you do not have to invest it all in one name.

To make the best possible use of your ISA allowance we can help you spread the investment over 2 or more tax years. The money you put into a With-Profit Bond can be re-invested in an ISA next spring including the bonus earned in the meantime – with no early surrender penalty (normal penalty would be 1% before the first anniversary).

In this way, you and your partner can tax shelter over £40,000 of your lump sum in the space of a few months. If you want to invest more, then it can be spread over a longer period.

Photo Competition

Building on the success of last year’s photography competition, the Society, in association with the Metropolitan Police Photographic Society (MPPS), ran an enhanced competition this year.

The competition was open to everyone in the Police Family, and with four subject categories: ‘Four Seasons’, ‘Landscape’, ‘London Scene’ and ‘Policing’.

There was something for everyone and a much greater chance of winning. Prize money totalling £2,000 was awarded, divided between 1st, 2nd and 3rd in each of the four categories.

We included an additional sum for the overall winner, who this year was Mrs Emma Durnford with her ‘Winter Robin’. Emma said of her win “I was surprised and delighted as this is the first competition that I have won for my photography and this is a hobby that I am now striving to pursue on a more professional basis”.

All the winning images can be viewed via the competition page of our website, plus keep an eye out there for details of next year’s calendar competition.

Passing Out Parades

Not only have officers been passing out at Hendon, Bobby Bear has too. By kind invitation of the Management at Hendon Training School, staff from the Society have been on parade promoting the CVOC and Bobby has been marching off with officers families after a suitable donation.

To date over £4,000 has been raised for the charity.

Throughout 2009 the Society has continued to support the excellent work carried out by the charity Child Victims of Crime (CVOC), offering Bobby Bears to all our members, subject to a charitable donation being made to the CVOC in return.

Dominic Chambers, Manager of the CVOC had this to say ”As the only National Police Children's Charity, founded by the British Police Rugby Section, Child Victims of Crime are very happy with our link with the Metropolitan Police Friendly Society; the efforts of the Friendly Society staff, and the generosity of its members has helped to ensure we continue to support children whose lives have been affected by crime by giving help and practical, material assistance to the most vulnerable and helpless victims of crime. We believe that the Society's efforts, especially its attendance at Hendon passing-out parades, has raised the profile of both our organisations to our mutual benefit.”

We still have a large number of caramel or brown bears; should you wish obtain one for a charitable donation this can be done by either visiting our website or phoning the Society directly.

ISAs - The Rules Explained and the New Limits

1. There are 2 types of ISA – a Cash ISA, and a Stocks & Shares ISA (our ISA is one of these). ISAs include former TESSAs and PEPs.


2. In any tax year (ending 5 April), you can save in both types of ISA, but must stick to one provider for each.


3. You can save a maximum of £7200 (old limit) each tax year between these ISAs, but only a half of the maximum (£3600) can go into the Cash ISA.


4. If you do not use the limit, you cannot carry it forward to the next tax year.


5. If you cash in your ISA, you cannot reinvest it later. This applies equally to the current year’s subscription.


6. You can transfer ISAs to a new provider, but you cannot switch a Stocks & Shares ISA into a Cash ISA. For old tax years, there is a lot of freedom – but the“one provider” rule affects the current year.


7. The overall limit is going up next April 6 to £10,200 (but only £5,100 in a Cash ISA).


8. If you are age 50 or over on 6 October (or reach 50 by 5th April 2010), then you benefit from the increase this year. But beware the one provider rule!

The MPFS ISA

Our ISA is modelled on our With-Profit Bond, which has been running successfully since autumn 1994 – the original Bonds have grown by 170% over 15 years. But because of the tax privileges we add higher bonuses annually to the ISA. So, over the last 10 years, whilst a Bond has grown by 66%, a lump sum ISA has grown by 75%. We spread our investments, and that has helped us to achieve these good returns – despite two major crashes in the equity markets in the last 10 years.

Because our with-profit fund is invested in a range of assets, including shares, it can rise or fall in value. So, in the early years, we reserve our rights to pay out less than you paid in. This means our ISA is classified as a Stocks and Shares ISA (as distinct from a Cash ISA). So if you have already saved in an ISA with a Building Society, even the maximum amount permitted for a Cash ISA, you can still save with us.

We have had to reduce our pay-outs when equity markets have plunged, but we are not adjusting pay-outs at the moment – in contrast to many shareholder owned funds. As a mutual set up to provide for the police service, avoiding the use of brokers, we strive to avoid such “market value reductions” wherever we can. When ISAs were launched in 1999, we only provided a lump sum ISA, but for many years now we have welcomed monthly contributions as well as lump sums – or a mixture (subject to the limits).

Investing on a regular basis helps you avoid the problem of market timing. Investing in a with-profit fund allows you to avoid putting “all your eggs in one basket”.

Notting Hill

For the last three years, we have attended the Operational Feeding Centre at the Notting Hill Carnival, to promote the work of your Society.

This year we gave out a competition flyer and this proved very popular with many entries being received on the day. More importantly interest was also generated in the Society’s products and we received numerous requests for brochures, including many for our ever-popular 5-year plan.

The vast majority of these requests came from nonmembers, proving this event was an excellent way to raise the profile of your Society and generate the new business on which your Society depends.

Hendon Talks and FSA Money

As part of our marketing programme, the Society has been delivering talks to all the intakes of student officers at Hendon. Our talks provide information on the police pension scheme and the many benefits of becoming a member of the Society, through our income protection, savings and investment products. These talks have been taking place throughout the year and provide the perfect opportunity to introduce new officers to the Society. For our police staff colleagues, the Society attends the Marketplace at the Corporate Induction Days, held at Empress State Building.

A number of our staff have also been trained by the Financial Services Authority (FSA) to deliver their ‘Making the most of your money’ presentation. This presentation is being rolled out across all police services and the Society has had the opportunity to deliver the presentation to Met. officers at training days on a number of boroughs. The presentation encourages individuals to take control of their finances and to regularly review theiroutgoings, something that is very important in today’s financial climate.