Recent changes to the PPFM
The Principles and Practices of Financial Management (PPFM) are reviewed by the Board regularly, and the most recent changes were agreed as summarised below. The current (January 2020) version of the PPFM is available here.
The practices have been reviewed to remove redundant wording, to improve clarity with no material changes to the principles, and to update them to reflect:
- The removal of the market value reduction subsidy for all business written from 1 January 2020 and the reduction in the charge that is made to assets shares in respect of the expected cost of this guarantee. This reflects a change following the Society’s move to an investment strategy which is designed to more actively mitigate downside market risk and enables the Society to continue to write increasing volumes of new business whilst remaining financially strong. For ISA business written on recurrent premiums, a new policy is issued for each tax year which means that any contributions made to these ISA policies from the 2020/21 tax year onwards do not have the market value reduction subsidy.