Questions and Answers

What is the metfriendly 5 Year Plan?

The 5 Year Plan is a conventional with-profits endowment plan with a fixed term of 5 years.

Who can take out a metfriendly 5 Year Plan?

You must be a UK resident aged 18 or over, and you must work or have worked in the police service - or be the partner or close relative of such a person. The 5 Year Plan has to be taken out before age 55 (60 for non-smokers).

(Our alternative Flexible Savings Plan has no upper age restriction)

How flexible is the 5 Year Plan?

Under the 5 Year Plan, once it has started, the premium and the 5-year term are fixed and cannot be altered. If you stop paying the premiums the plan will cease and a "surrender value" will become payable.

When can I take money out?

When the 5 Year Plan reaches the end of the 5 year period you will receive the maturity value.

You can cash in the 5 Year Plan completely at any time for a 'surrender value'. We will not permit partial surrenders, but we will automatically split large savings (at least £100 per month) into 2 or more plans - for greater flexibility see the Flexible Savings Plan.

On taking money out of the plan there may be tax implications. (See 'What about Tax')

How can I withdraw money if I need it?

All you have to do is send or fax us a signed letter detailing your request and giving details of the bank or building society account (which must be in your name) where we should pay your money. Please contact us for more details.

How does the 5 Year Savings Plan work?

• You invest a regular monthly premium (min £20) with the Society.
• These are life assurance plans and they have a death benefit, the Sum Assured.
• The Sum Assured is £560 for each £10 monthly premium (Minimum Sum Assured £1120).
• We have no maximum premium, but will need to underwrite the life insurance - which may impose some restrictions.
• You must be under 55 when you take out the plan, or under 60 if you are a non-smoker.
• Your money is invested in our with-profits fund.
• At the end of each calendar year, we add a bonus to the Sum Assured and send you a bonus notice.
• Once added, that bonus is a permanent addition to your investment with us.
• Bonuses are compounded, so in subsequent years you earn bonuses on the bonuses.
• The Sum Assured and bonuses are paid out after 5 years (at 'maturity') or on earlier death.
• We also normally add a final bonus after 5 years.

Where is my premium invested?

The premiums are invested in the metfriendly with-profits fund which is made up of equities, government bonds, commercial property, corporate bonds and cash. The approximate "mix" is listed below as at 31st December 2010. For more information on how the with-profits fund works, please refer to the "How we manage the with-profits fund".

1. Equities 40%
2. Government Bonds 27%
3. Corporate Bonds 19%
4. Commercial Property 9%
5. Cash 5%

How are bonuses determined?

Bonuses are decided by the Board acting on the advice of the with-profits actuary. A key factor in determining bonuses is the investment return in recent years. (See "How do you work out what the final bonus should be?)".

What happens if the stockmarket falls?

All of our assets can rise and fall with the stock market, although investing in a range of assets does provide some protection to the fund. It is possible that this will result in the value of your plans reducing from time to time.

How will I know how well my plan is doing?

We will send you a bonus notice every year, showing you the annual bonuses that have been earned; any final bonus (payable on encashment) will not be shown. (See "What are bonuses?").

How do I apply for a 5 Year Plan?

Applications can be initiated online using the following form : 5 Year Plan.

If you prefer, you can call us and complete a telephone application.

Application Forms can also be downloaded in pdf format.  Please make sure you fill in the appropriate application form (Form A - for currently serving MPS Police Officers and Police Staff, or City of London Police Officers ONLY.   Form B - for all other applicants including volunteers, retired police officers and all partners or relatives).

For new members Form B should be accompanied by reasonable proof of identity (copy of your Birth Certificate, Driving Licence or Passport) and of address (copy of a recent utility bill). Send it to us with your payment instructions.

Serving officers or staff in the Metropolitan and officers in the City of London Police Services can authorise us to take monthly premiums from their salary - both for their plan and that of their partner.

Any amount subscribed in this way for a partner will be for their benefit. Any partner's policy paid for in this way still legally belongs to that partner. It will be their tax status on encashment that determines whether there is any tax to pay at that time, and any payments will be made to them.

If you are retired, or a relative, or simply wish to pay by direct debit, please ask for a direct debit form (unless you already pay this way, or your partner pays from their salary).

What might I get back?

An example - What you might get back after 5 years for a monthly premium of £50 into the 5 YEAR PLAN

• If investments grew at 2.5% a year - after 5 years, you would get back £3,000
• If investments grew at 4.0% a year - after 5 years, you would get back £3,100
• If investments grew at 5.5% a year - after 5 years, you would get back £3,220

The following examples show what you might get back. They assume that investments will grow at 4.0% a year.

The early years

At the end of year	Total premium paid in to date	What you might get back
1	£600	£550
2	£1,200	£1,150
3	£1,800	£1,800
4	£2,400	£2,400

Warning - if you cash in during the early years, you could get back less than you paid in.

The final year

At the end of year	Total premium paid in to date	What you might get back
5	£3,000	£3,100

What are the charges?

• The charges, expenses and other deductions used are best estimates based on current experience.

What if I change my mind?

We will send you a certificate showing your benefits and a cancellation notice. If you change your mind, you can return the notice within 30 days for a full refund.

Are there limits on premiums?

The minimum premium is £20 per month.

There is normally no upper limit - but we must able to underwrite the life insurance cover, so we may exceptionally impose an upper limit.

Can I choose how long to save for?

The 5 Year Plan has a fixed term of 5 years.

(Alternatively a metfriendly ISA or Flexible Savings Plan can be left running for as long as you wish.)

What happens to my plan if I die?

The value of your plan including any bonuses added will be payable to your estate. This will not be less than the Sum Assured.

What about tax?

We pay tax on the interest and capital gains in the with-profit fund, but only at the basic rate (20%).

If you are a higher rate taxpayer when the plan pays out, you will need to declare any profit on your tax return and suffer income tax at the difference between the basic and the highest rate you pay.

(Alternatively under a metfriendly ISA, profits are not subject to tax.)

How much will it cost for advice?

• metfriendly does not make any form of commission or incentive payments.
• The cost of providing verbal or written information about these plans is included in the Society's overall expenses.

Is it suitable for me?

If you are unsure as to the suitability of these products, and wish to obtain personal advice, you should contact an independent financial adviser.

How do I contact you?

Metropolitan Police Friendly Society Limited,

Berwick House,

8-10 Knoll Rise,

Orpington,

Kent,

BR6 0EL,

Phone: 01689 891454

Fax: 01689 891455

Metphone 28192

Email: enquiries@mpfs.org.uk

Web: www.mpfs.org.uk.