Secured Performance Fund Update - January 2011

We have recently advised customers of some changes to our Secured Performance Fund.

How does the Secured Performance Fund work?

The Secured Performance Fund ensures that you will never have negative returns. At the start of each year your Secured Performance Fund gives you an annual growth rate.

Guaranteed Rates Declared on the Secured Performance Fund (1997 – 2011)

What changes are being made to the Secured Performance Fund?

• We will not be able to accept any future contributions into the fund.
• Any amounts you have already invested in the Secured Performance Fund will remain in this fund.
• You can choose what fund you would like to invest future contributions into. If you do not tell us what fund you would like your contributions to be invested in, we will automatically invest them in the Stability Fund (Medium Risk).

It is important to understand that the changes do not in any way affect the contributions you have already made into the Secured Performance Fund.

What assets does the Stability Fund invest in?

The Stability Fund invests mainly in government bonds and cash, with a small amount in shares and alternative assets. It does not have the smoothing mechanism of the Secured Performance Fund, and returns can be negative as well as positive.

What is the risk level of the Stability Fund?

The Stability Fund is a medium risk fund with a volatility rating of 3. This compares with the Stabilised Profits Fund which is a very low risk fund with a volatility rating of 1. Irish Life rates the potential level of volatility for each of our funds on a range from 1 to 7. Volatility refers to the potential ups and downs that a fund can experience. Rating funds in this way should help you compare the levels of risk that different types of funds have.

As mentioned, we have rated the Stability Fund as a 3. This means that the value of the Stability Fund can rise and fall but because of the high exposure to bonds and cash, the level of ups and downs may be lower than a standard managed fund, which would have a higher equity content.

What if I don’t want to invest future contributions in the Stability Fund?

You can choose to invest in any of the own funds from the panel of funds listed in your Terms & Conditions Booklet, provided that fund is currently available. A description of each of the funds is given in Irish Life’s Fund Guide or product booklets along with the risk and volatility levels. If you need any advice in choosing a fund or about your pension plan in general we recommend that you contact your financial adviser.

What is the Stability Fund charge?

The annual fund charge on the Stability Fund on our range of PRSA products will be 0.5% less that the charge on the Secured Performance Fund. On other products the charge will be at least 0.35% that on the Secured Performance Fund. Exact details of the charge on your plan can be obtained from Irish Life.

What are the exit conditions of the Secured Performance Fund?

• Retire after regular payments have been made into your plan for at least 10 years
• Are retiring due to serious ill health
• Die
• Cash in units to pay costs such as life cover charges where appropriate as per your Terms & Conditions.

However for other exits or withdrawals a Market Value Adjustment (MVA) currently applies to the value of the Secured Performance Fund. Please refer to your Terms & Conditions booklet for more details.

What is the current Market Value Adjustment on the Secured Performance Fund?

The current Market Value Adjustment is 13% as at 18th January 2011. The level of the Market Value Adjustment will change from time to time. Please contact us for up to date information on the level of the Market Value Adjustment.

Can I switch my existing money out of the Secured Performance Fund and then back in at a later date?

No, if an existing customer decides to invest their existing fund into a different fund, they cannot switch back into the Secured Performance at a later date. So, if you switch out of the Secured Performance Fund, you will not be able to switch back in.

Further Information

• Contact our Customer Service Team
• Email your financial advisor