PROTECTED RETIREMENT PLAN

1. PROTECTEDRETIREMENTPLAN This is for financial advisers only Ease your clients into retirement…

2. Introducing the Protected Retirement Plan Retirement is changing. People are living longer and more complex lives. People in their 60’s can look forward to 20, or even 30 years or more of retirement. Nowadays, they expect more from their retirement plans with the freedom to reassess their needs and provisions as they get older. A solution that allows them a bit of breathing space could be just the thing they need… …and that’s where our Protected Retirement Plan comes in. • A changing market … and a new solution. • In more detail. • Support for you.

3. The need for flexibility In the first 5 years of retirement: 20% of people renovated their property and 25% move in the first five years of retirement. 34% reported the birth of a grandchild. 17% of people needed to provide financial support to other family members. 6% returned to work in some capacity. 7% received an inheritance. People need time to adjust to retirement – and an income stream to match. The above statistics relate to the LV= 2010 State of Retirement report

4. The current environment Lifetime annuity: • incomeis locked in for the customer’s lifetime. • doesn’t take into account changes to personal circumstances. • doesn’t allow increased income if your customer becomes ill after it’s been bought.

5. The current environment drawdown pension: • may not be suitable for risk averse customers. • may not be suitable for customers with smaller funds. • may charge for flexibility that customers don’t need. • requires reviews and monitoring of investment conditions. Add image

6. The Protected Retirement Plan from LV= provides: a fixed level of income, or no income at all, to meet customer needs. a fixed term, chosen by the customer. a guaranteed maturity value payable if your client survives until the end of the term. the flexibility at the end of the term to: buy a lifetime annuity (on any available basis) transfer to another drawdown pension product buy another Protected Retirement Plan (subject to eligibility) take the maturity value as a final income payment under the flexible drawdown option a way to keep your client’s options open. Breathing space

7. Changes in circumstances If at any time during the term of the plan your client’s circumstances change, they may be able to transfer to another product with LV= or any other registered pension scheme. The qualifying changes of circumstances are: • Diagnosis of a medical condition qualifying your client, their spouse or civil partner or financial dependant for an enhanced annuity • Marriage / civil partnership, divorce, dissolution of civil partnership • Death of a spouse, civil partner or financial dependent • Client is retired by their pension scheme due to ill health • Qualification for flexible drawdown In order to qualify we would need evidence of the change in circumstances within 12 months of the event. Your client can transfer within 12 months of their change in circumstances. We will calculate a transfer value based on current investment conditions and the remaining plan term. It will be based on the Guaranteed Maturity Value plus remaining income payments to the end of the term less our costs to end the plan. If your client qualifies for flexible drawdown, they may take this transfer value as a lump sum payment. This will be taxed as income. Your client’s transfer value may be significantly less than their Guaranteed Maturity Value if they transfer out in the early years, or if investment conditions have worsened since the plan started. The circumstances listed above are the only ones in which your client can change or end their plan. The Protected Retirement Plan cannot be cashed in at any time.

8. Your client can choose from a range of death benefit options at the start of the plan a dependant’s income for spouse, civil partner, or financial dependant up to 100% of customer’s plan income, subject to GAD limits (for capped drawdown) paid until the earlier of the end of the plan or when the dependant dies plus a maturity value, if dependant is alive at the end of the plan guarantee period income for a minimum period, even if they die during this time. normally paid as a lump sum unless a dependants income is also included no further benefit is payable at maturity, unless dependant’s income is also included Value Protection protect up to 100% of the fund used to set up the plan, once all income payments have stopped paid as a lump sum (amount protected less any income paid and tax) no further benefit is payable at maturity, unless dependant’s income is also included All income will be taxed at source under PAYE All lump sum death benefits will be taxed at source, currently 55% Annuity style death benefits

9. your clients to choose an income without being restricted to GAD limits, as long as it is sustainable throughout the term of the policy. any selected maturity value to be paid as a final income payment, subject to tax. Other options are to use the maturity value to: purchase a lifetime annuity buy another Protected Retirement Plan (subject to eligibility) Transfer to another flexible drawdown arrangement. your clients to keep as much pension unvested as possible, enabling them to draw an income whilst avoiding the 55% tax charge on death on as much of their pension as possible. customers and dependants to elect for flexible drawdown at the outset or at any time during the term of the plan, even under existing plans. Flexible drawdown under our Protected Retirement Plan The Age 75 changes implemented in April 2011 introduced a new concept for customers - flexible drawdown. Selecting this under our Protected Retirement Plan allows: Insert image here

10. Flexible drawdown suitability Flexible drawdown may be suitable for clients who: have at least £20,000 a year pension income and other sufficient sources of income to meet on-going needs. want to draw as much income as possible now, even if this means a reduced income later. want to pass as much of their estate to somebody during their lifetime as possible (and if they live for more than 7 years can avoid PET IHT charges). want to leave as much funds unvested as possible to maximise the tax free lump sum payment on death (before age 75 only). have a dependant who also qualifies for flexible drawdown and wants to reduce the 55% tax charge on lump sum death benefits, even after age 75 (although this will be taxed as income tax). Insert image here

11. PROTECTEDRETIREMENTPLAN In more detail…

12. Your customer can choose their income benefits at outset: Any regular income amount from nil to the maximum GAD limit (if using the flexible drawdown option, there’s no maximum limit as long as the income is sustainable over the chosen term). A level or increasing income (up to 8.5% a year). A default option designed to provide a sustainable income level. Payment frequency monthly, quarterly, six-monthly or yearly in advance or arrears. We pay income on Pay As You Earn basis, deducting tax at source. Income is fixed at the start of the plan and can’t be changed, except when capped by GAD. Income options…

13. Your customer can choose the term to suit their needs: Minimum term is 3 years; maximum termis 25 years. Minimum age is 55 when the plan starts. There is no maximum age. Shorter terms provide more flexibility, but lower returns. Longer terms provide a ‘long-stop’ annuityalternative with more attractive returns. The term is fixed at the start of the plan and can’t usually be changed. Term options… *

14. At the end of the plan term, provided your customer is still alive, we’ll pay a guaranteed maturity value. Guaranteed maturity value • The maturity value is fixed when the plan starts. • The value depends on: • the size of the pension fund invested • the plan term • client age • amount and frequency of income chosen • death benefits chosen • current and future investment conditions.

15. Guaranteed maturity value At the end of the term, your client can use their guaranteed maturity value to: • buy an annuity, based on their circumstances and the economic / legislative conditions at the time. A fullopen market option is available. • buy another Protected Retirement Plan (subject to eligibility). • invest in another drawdown pension plan. • be paid as a final income payment under the flexible drawdown option, subject to income tax.

16. Annuity style death benefits Your client can choose from a range of death benefit options at the start of the plan. • A dependant’s income • Select a proportion of your client’s income they want their dependant to receive, up to 100%. • On your client’s death, they receive this income until maturity, or when they die if earlier. • If a dependant’s income has also been included, we’ll pay income at the client’s rate until the end of the term. Income will either be the same or change every year by the same percentage as their income would have been if they were still alive. • The dependant’s income will be subject to GAD limits, unless they opt for flexible drawdown • Income can only be paid to a spouse, civil partner or named financial dependant. • If the dependant dies before maturity, no further benefit will be paid unless an income guarantee or value protection has been selected. All income will be taxed at source under PAYE All lump sum death benefits will be taxed at source, currently 55%

17. Annuity style death benefits • Guarantee period • Your client can choose a guarantee period from one to ten years or for the whole term. • If your client dies before the end of the term, we’ll pay the remaining income instalments as a lump sum death benefit unless a dependant’s income is also included. • If a dependant’s income has also been included, we’ll pay income at the client’s rate until the end of the guarantee. • Any income paid to the dependant will be subject to their GAD limit, unless flexible drawdown has been selected. • No further benefit will be payable after the end of the guarantee period , and no guaranteed maturity value will be payable, unless a dependant’s income is also selected. • Not available if Value Protection has been chosen. All income will be taxed at source under PAYE All lump sum death benefits will be taxed at source, currently 55%

18. Annuity style death benefits • Value Protection • Your client can choose to protect all, or a proportion of, their fund by choosing Value Protection. • If your client dies before the end of the term, we will normally pay the protected amount less the income paid under the policy as a lump sum death benefit. • Alternatively, the dependant can choose to use the fund to purchase a dependant’s income. • If they qualify for flexible drawdown they can then draw the full fund as an income payment, subject to tax. • No further benefit will then be paid from the policy, unless a dependant’s income has also been selected. • Not available if a guarantee period has been chosen. All income will be taxed at source under PAYE All lump sum death benefits will be taxed at source, currently 55%

19. The maximum income payable is restricted to a level set by the Government Actuary’s Department, unless Flexible Drawdown has been chosen. The GAD rate is broadly equivalent to a level single life annuity rate. The income from our Protected Retirement Plan is currently restricted to 100% GAD. Maximum income is calculated at outset and is reviewed every 3 years, until age 75. For transfers after age 75, income is reviewed each year. A GAD review will also occur if the customer dies and a dependant’s income is payable. LV= will ensure initial income is within GAD limits, and will monitor income throughout the term of the plan. If we need to restrict the income that can be paid in any year, we add any withheld income (plus interest) to the maturity value. A customer or dependant can elect for flexible drawdown at any stage. We will then remove the GAD restrictions on income but the client will not be able to review their selected income level. About GAD

20. The Protected Retirement Plan is a fixed plan written under drawdown pension rules Minimum investment is £10,000 (after any tax free cash has been taken). No maximum investment limit. Flexible remuneration and commission arrangements are available. Invest on a stand alone basis: by transferring un-crystallised funds or drawdown pension monies drawdown pension to drawdown pension transfers will maintain existing GAD income limits & dates. Or as part of SIPP wrapper: either LV= Flexible Transitions Account or others (where accepted) as an investment of an existing SIPP wrapper. Ways to invest…

21. PROTECTEDRETIREMENTPLAN Sales opportunities…

22. A potential solution for customers who…. • Like the idea of an annuity, but… • don’t want to lose control of their pension fund in the event of early death. • worry that their health may deteriorate in the future. • don’t want to commit to something that may not be suitable in five or ten years time. • are concerned that lifetime annuity rates are at an all time low. • Like the idea of an income from drawdown pension, but are nervous about exposing their savings to fluctuations in investment performance. • Have a pension fund that is smaller than would normallybe considered for a drawdown pension contract. • Want to draw an income but keep as much of the fund unvested as possible. A retirement income product that allows them a bit of breathing space could be just the thing they need…

23. Example 1 – maintaining value on death This would pay a level income of £385 per month, but he doesn’t like the fact that no lump sum death benefit would be payable if he died after 10 years. He considers buying a single life lifetime annuity with a 10 year guarantee. Mr Smith aged 60Good health, nonsmoker PensionFund £80,000after taking histax-free cash Instead, he buys a Protected Retirement Plan until age 75 with 100% Value Protection and an income of £380 per month. Alternatively, he could buy another Protected Retirement Plan to defer the purchase of an annuity even later. Or if he’s in Flexible Drawdown, he can take the £54,427 as a final income payment, subject to tax If Mr Smith survives to age 75, he could use the £54,427 guaranteed maturity value to purchase an annuity of £367 per month, choosing another 10 year guarantee (based on current rates). In the event that Mr Smith dies after 11 years, a lump sum equal to £29,730 (less tax) would be payable. All annuity rates taken from The Exchange 21/03/2011

24. Example 2 – changing personal circumstances He has a £100,000 pension fund, and wants to take maximum tax free cash to fund home improvements to help his wife’s mobility around the home. This leaves him £75,000 to buy an annuity. Mr & Mrs Collins aremarried and are both age 63. Unfortunately Mrs Collins has recently been taken seriously ill. Mr Collins is in goodhealth and doesn’t smoke. Mr Collins wants to take early retirement to help care for his wife . He doesn’t want to take out drawdown, as he wants a simple packaged solution. • At the end of the term, he can decide whether to use his Guaranteed Maturity Value to: • - buy a joint life annuity (if his wife survives), and draw an income of £327 per month • - buy single life annuity (if his wife passes away) and draw an income of £355 per month • - buy another Protected Retirement Plan (if he wishes to return to work in a full time / part time capacity) and draw an income between £0 and £463 per month. Although he could buy a single life annuity and receive £387 per month, he decides to take out a 3 year Protected Retirement Plan and receive £366.16 per month with a Guaranteed Maturity Value of £64,418. All annuity rates taken from The Exchange 21/03/11

25. Example 3 – annuity rate concern The Protected Retirement Plan provides a guaranteed maturity value of £29,440 the day before age 75. If annuity rates improve by 5% over this time, she could then buy an annuity of £2,443.94 a year which is £116 a year higher than an annuity at age 75 on current rates. She’s 59, in good health and doesn’t smoke, and has a pension pot after tax free cash of £40,000. Rather than buying an annuity that would pay £2,067 a year she chooses to take the same level of income from a Protected Retirement Plan. Mrs Parsons has read a numberof press articles stating that annuity rates are at an all time low and should improve because of European discrimination law. She therefore doesn’t want to lock into current annuity rates by buying a lifetime annuity, although she still wants to take an income from her pension savings. Insert Image If she happens to qualify for an enhancement due to ill health the amount could be higher. All annuity rates taken from The Exchange 21/03/11

26. Example 4 – income flexibility He has pension savings of £120,000, and believes his fund is too small to be cost effective for a traditional drawdown plan, especially because he does not want to take any further investment risk with his savings. Instead, he transfers his pension to LV=, takes his £30,000 tax free cash and puts the balance into a Protected Retirement Plan taking no income. Mr Henderson is 57 and has recently been made redundant. He has found some contract / part time work but wants to release his tax free cash to help tide him over. He decides to take an 8 year term which means it will end at the same time as his old age pension becomes due, and he will then be able to asses his long term income needs and buy the most appropriate product. The Protected Retirement Plan will provide a guaranteed maturity value of £121,461 at age 65. This could provide an income over 50% higher than if he had purchased an annuity when he was 57. All annuity rates taken from Assureweb 21/03/11

27. Example 5 – using flexible drawdown to maximise income to support grandchildren through university When he retired, he bought a lifetime annuity. This, combined with the dependant’s annuity he’s receiving from his late wife, pays him an income of £23,000 each year. This means he’s satisfied the Minimum Income Requirement (MIR) and is eligible for flexible drawdown. He also holds some other investments. Since his wife passed away, he’s decided he wants to pass as much of his estate to his children in the form of lifetime inheritance as possible. In particular, his grandchildren are about to start university and he wants to help with funding for this. Mr Shah is 74 and retired ten years ago. His wife passed away two years ago. He has two grown-up children and three grandchildren. Insert Image As he’s also receiving taxable income of £25,000 a year from his other investments, as well as annuity income of £23,000 he’ll be required to pay 40% tax on his Protected Retirement Plan income. The gifts to his children and grandchildren will potentially be subject to Inheritance Tax. However, he’s calculated he would benefit from a lower total tax charge than if he’d left his pension benefits unvested until he died. He also has a pension fund worth £100,000 which he’s not vested yet. He chooses to take 25% of the fund as tax-free cash which he’ll put into trust for his grandchildren. He wants to take as much income as possible over the next three years. As he’s currently in good health, he believes this is an effective use of his assets. In addition, the Protected Retirement Plan has helped him maximise his income and allow him to fund his grandchildren's university fees. He buys a Protected Retirement Plan and elects for maximum income with no maturity value, utilising the Flexible Drawdown option. This allows him to withdraw the entire value of this pension fund over three years and gift this to his children.

28. PROTECTEDRETIREMENTPLAN Supporting you

29. Making your life easy • 30 day quote guarantee period. • Offers a nil Guaranteed Maturity Amount option for the Trustee version of the plan. • Ability to continue paying current GAD maximum if higher than today’s figure for drawdown pension transfer cases. • Non-discounted lump sum guarantee death benefits. • Named financial dependant on the plan.

30. PRP support   Service and sales support • Guaranteed quotes available from The Exchange and Assureweb 24/7. • We have a range of customer facing guides and sales aids. • All sales, new business processing and on-going servicing provided by directly employed LV= staff members. • Local contact with Key Account Executives for any queries you have at quote stage. • We have new business case ownership which provides a dedicated point of contact at application stage. • Money where our mouth is service promise paying £1,000 if tax free cash is not released within service levels (terms and conditions apply). • Membership of Options service for faster transfer of the funds. • Payment of commission twice each week. • Annual statements issued to all clients.       

31. allowing you to plan your customers’ retirement income provision more effectively. broadening your competitive and propositional advantage over those adviser firms offering only traditional lifetime annuities and retirement solutions. supporting Treating Customers Fairly principles and highlighting all available options. An attractive option for you The Protected Retirement Plan from LV= can help to strengthen your business and offer new opportunities for advice and retirement planning, by: providing opportunity for further advice (and remuneration) when the plan matures, based on client situation at that time. enabling a continued customer relationship and greater embedded value for your business. offering transparent charging, factory gate pricing and remuneration flexibility.

32. However, your customer may be better placed with a lifetime annuity, drawdown pension or a deferred annuity, instead of a Protected Retirement Plan, if they: are currently in poor health and may already benefit from enhanced or impaired rates. require either income or investment flexibility during the term of the plan. want more investment control. cannot afford to take the risk that annuity rates could fall further during the term, reducing their income at maturity. Considering other options

33. Key risks The plan cannot usually be changed during the term. Benefits may be lost on death –unless you select a death benefit option. Income available from the guaranteed maturity value is not guaranteed when the plan ends. Summary Key benefits Avoids locking your customers into a lifetime product immediately on retirement. Gives your customers the chance to reassess their needs in the future to suit their changing circumstances. Gives your customers the ability to benefit from future changes in legislation / product development / annuity rates. Gives your customers time to consider all their options. Simple charging structure built into contract with no AMC.

34. To find out more If you would like more information about our Protected Retirement Plan and the breathing space that it can offer your clients, please contact us: Midlands and South West: 0800 678 1680 North: 0800 678 1682 South East: 0800 678 1681 Or call our central quotes team on 0800 169 1111, or email them at annuity.quotes@LV.com Opening times 8.30am – 5.30pm Monday to Friday. For textphone dial 18001 first. We may record and/or monitor your calls for training and audit purposes. You can access and download a full range of Protected Retirement Plan documents and guides at www.LV.com/adviser

35. PROTECTEDRETIREMENTPLAN About LV=

36. Financially strong & stable County Cricket sponsorship • We’re the UK’s largest friendly society with over 4,000 employees. • We’re proudly ‘mutual’, with no shareholders eating into profits. • We’ve been looking after members since 1843. • We’re financially strong, rated B+ (very good) by AKG1. • We’ve 5million members and customers. • We’ve been awarded 10/10 for our with-profits fund by Cazalet Consulting for financial strength, investment freedom and Proposition flexibility and bonus paying ability2. Britannia Rescue LV= Kidzone 1. AKG’s Company Profile and Financial Strength Reports 2011 2. Cazalet Consulting 2011 WP Ratings

37. Rich retirement solutions heritage In early 2008, LV= acquired the new business operations of Tomorrow (formerly GE Life) with specialist retirement expertise and a history of innovation: • First IFA provider to enter the UK drawdown market(as National Mutual Life). • First provider to launch smoker annuities in the UK. • First provider to develop a comprehensive drawdown range including occupational and fullyphased drawdown. • One of the first to launch discretionary management for pensions to the mass market. • 15 years experience as a SIPP provider. • More than 15 years experience in the enhanced/impairedannuity market.

38. Products, service, support and expertise • Personal adviser support • local face to face account development and expertise • telephone account management and business support • quotation and business processing teams • administration centres • e-solutions • dedicated adviser site LV.com/adviser • regular e-news updates • secure services • Retirement • Protected Retirement Plan (including the option for flexible drawdown) • Flexible Transitions Account • enhanced annuities • with-profits annuities • equity release • Protection • income protection and critical illness • life protection • Investments • new generation with-profits

39. About LV= This is for financial advisers only Not to be used after 20 December 2012 This presentation is based on our understanding of current and proposed legislation as at 6 April 2012 applicable in England and Wales and HM Revenue & Customs practice which may change in the future. We cannot accept responsibility for any action arising as a result of the information contained in this presentation. Liverpool Victoria Friendly Society Limited, Keynes House Tilehouse Street, Hitchin, Herts, SG5 2DX. Liverpool Victoria Friendly Society Limited is a member of the ABI, AFM and ILAG. Authorised and regulated by the Financial Services Authority, register number. 110035. NM Pensions Trustees Limited, (registered in England No. 4299742), act as Trustees and Scheme Administrators. Authorised and regulated by the Financial Services Authority, register number. 463402. Registered address for all companies: County Gates, Bournemouth BH1 2NF. Tel: 01202 292333. 21226241 04/12