How we run the Society

Membership of the Society is open to police officers and staff and members of their families. We issue membership certificates for with-profits contracts – regular savings and lump sum investments – which are described in the Tables. We issue policies for Mortgage Protection, Income Protection and Private Medical Insurance. The Tables and specimen Policy Wordings are published on the website and freely available on request.

Our Directors’ CVs are on the website, and the Committee structure that supports the Board is explained. More detail on how the Society is governed is included in the Annual Report – again available on the web, but like all our documents also available in hard copy free of charge. The Society is governed by its Rules – which were updated last year and are on our website.

Directors now generally serve a 3 year term and are eligible for re-election. In practice, the Board is strongly representative of the membership. We are always looking to refresh the Board with new blood, and the Committees that support it are an ideal place for prospective Directors to start off. We would be delighted to hear from any member who wants to get involved, whether in police service or a family member, especially where they have professional experience that we could put to good use.

With-Profits Fund

We go into detail about how the with-profits business is run in the “Principles and Practices of Financial Management”. The full PPFM is available on the websites, but all our brochures include a summary with the key features. One of our independent Non-Executive Directors oversees the application of the PPFM on behalf of the Board.

We aim to base pay-outs to members on their premiums accumulated to allow for our investment return, less (where applicable) allowance for tax and and the cost of life cover, and after meeting our expenses. Last year, having regard to our financial strength, we increased pay-outs to return some of our capital to members. In 2008, we will continue to return capital to members in this way, but to a greater extent.

The investment return on the Fund is much less volatile than the markets in which it invests. First, we spread our assets – with the main components being UK equities and government stock. Second, we “smooth” the return to members, effectively averaging out the peaks and troughs. For example, the pay-out on a 10 year tax-exempt savings plan for £25 per month (total premiums of £3000) has varied over the past 5 years from £3950 to £4350, and is currently about £4120.

Tax Exempt Savings Plans

These Plans are uniquely available from Friendly Societies. Everyone has an allowance of £25 to save each month – across all Friendly Societies. Adults can take out a plan as well as an ISA. Children can have a plan regardless of how young they are – their premium can be paid until age 18 by a parent or other adult relative. Because we pay no tax on our investment return, we pay higher rates of bonus each year on these Plans.