Flexible Income (drawdown) fund range

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1 Flexible Income (drawdown) fund range You re thinking about whether flexible income is right for you. You also need to decide which fund or funds to choose understanding which fund to invest in and the risks associated with that fund are important both now and in the future as your circumstances and plans change. As flexible income keeps your retirement savings invested, they could be affected by a number of risks. It s not possible to eliminate risks entirely. Funds have different aims and objectives and you could use these different features to try and reduce the risks that apply to you. When you choose a fund, you should compare its aims to your requirements, for example you may wish to protect your retirement savings from stock market fluctuations, the risk of inflation, or the cost of buying an annuity at some point in the future. Remember though, funds have no guarantees; they only aim to meet objectives. Whether the fund is seeking to grow your retirement savings, to protect you from the highs and lows of the stock market, or any other stated objective, nothing is guaranteed. Depending on the decisions you make you could lose some or all of your money and this could affect the amount of retirement income you may have in the future. If you are not sure about making investment decisions, you should consult a regulated financial adviser. You may have to pay a fee for this.

2 To help you manage your retirement savings there are funds which aim to: provide higher returns over the medium to long term (five years or more), provide some stability to reduce the risk of stock market falls, achieve long term investment growth. We re all living longer so it s important not to underestimate how long your retirement savings need to last for, achieve returns above inflation to help reduce the risk that your money may be eroded by inflation, protect against factors affecting the cost of buying an annuity at some point in the future. Your fund choice When you are setting up your flexible income you can choose from the following funds: Fund name Zurich Dynamic Annuity Purchase Fund CS1 Zurich Flexible Retirement Fund CS1 Objective and Objectives This fund invests in assets that reflect the profile of a typical level annuity with the aim of reflecting changes in the cost of purchasing such an annuity. The fund invests in government debt and may also invest in money market assets. The investment will be sensitive to changes in interest rates. The fund is managed by Schroders Objective The investment objective of the fund is to provide long term investment growth through dynamic exposure to a diversified range of assets. The fund seeks to achieve returns 2% above inflation over the long term and also aims to provide 8% loss protection over any period. These aims are before the deduction of charges relevant to your scheme. The fund can invest in a range of different assets including shares, government and corporate issued debt, commodities, derivatives and money market assets. The asset allocation of the fund is managed by Schroders with the aim of achieving returns above inflation over the medium to long term whilst managing risk. The fund invests in a combination of UK and overseas assets.

3 Fund name Zurich Mixed Investments Fund CS1 Zurich Money Market Fund CS1 Zurich Passive Annuity Purchase Fund CS1 Objective and Objective The investment objective of this fund is to provide long term investment growth through dynamic exposure to a diversified range of assets. The fund seeks to achieve returns 4% above inflation over the long term and also aims to provide 12% loss protection over any given 12 month period. These aims are before the deduction of charges relevant to your scheme. The fund can invest in a range of different assets including shares, government and corporate-issued debt, commodities, derivatives and money market assets. The asset allocation of the fund is managed by Schroders with the aim of achieving returns above inflation over the medium to long term whilst managing risk. The fund invests in a combination of UK and overseas assets. Objectives This fund aims to provide stability of capital and a modest level of return through investment in bank deposits such as time deposits and certificates of deposit and government debt instruments such as gilts and treasury bills, with less than 12 months to maturity. This fund invests in assets which tend to produce more stable returns. Over the longer term these assets should give lower but steady growth, with some fluctuation in value. In some circumstances, there can be a fall in value. For example, when interest rates are low the return from the assets may be less than the charges. Unless held as part of a personalised portfolio invested to achieve an overall balance of risk and return, this fund is more suited for shorter-term investment. Investing solely in this fund for the longer term may result in a lower return than a bank or building society savings account. Objectives This fund aims to reflect to some degree the changes in the cost of purchasing a level annuity. The fund will invest predominantly in passive funds, and will be allocated between some or all of corporate debt, government debt and derivatives.

4 The following diagram gives you an idea of how these funds could be affected by factors such as inflation and market volatility and the expectation of a fund to achieve certain aims. The document Introduction to investing provides further information about investment risk. You can find a copy in the library section of the website. Please note there are no certainties, the diagram is only an indication of how retirement savings in these funds could be affected. High Likelihood Moderate Low Affected by inflation Affected by volatility Dynamic Annuity Purchase Fund Flexible Retirement Fund Mixed Investments Fund Aims for long term growth Fund aims to have downside protection Looks to preserve capital Money Market Fund Passive Annuity Purchase Fund Wider investments Once your flexible income has been set up, you can choose from a wider range of investments listed on the Investment choices section of the website. You can invest in one or a number of these, the choice is yours, but whatever you decide to do, you should familiarise yourself with the aims and objectives of the investments they might not provide what you need them to. Remember, the higher the potential returns, the greater the risk of the value of your retirement savings falling. The fund factsheets show the assets each fund invests in. You can find these on the Investment choices section of the website. The document Introduction to investing provides further information about the different asset types and can be found in the library section of the website. You should carefully review the information available to you to ensure you fully understand the risks.

5 Charges Before making any fund or investment choices you should familiarise yourself with their charges. You can find these in Your investment choices and charges document which can be found in the library on the website. Ongoing reviews You need to regularly review the funds you are in, any income you are taking and your personal circumstances to make sure your plan can support your future income needs.

6 Zurich Assurance Ltd. Registered in England and Wales under company number Registered Office: The Grange, Bishops Cleeve, Cheltenham, GL52 8XX. Zurich is a trading name of Sterling ISA Managers Limited. Sterling ISA Managers Limited is registered in England and Wales under company number Registered Office: The Grange, Bishops Cleeve, Cheltenham, GL52 8XX. PP (11/15) RRD