Finance and Capital Management

PruFund mechanics Summary Customers • Invest initial saving and/or retirement pot into the fund • Investment grows in line with an . EGR¹ (reviewed on a quarterly basis) • Annual Charges, which cover the expenses incurred by the WPF², including the cost of any Shareholder Transfer, are deducted from the investment • Downward / upward UPAS³ are applied for significant market movements With-Profits Fund • Receives the actual investment returns and accrues the Expected Growth Rate to customers Absorbs any positive or negative difference between the Annual Charges and the expenses incurred (which include the transfer paid to shareholders) • Pays the Shareholder Transfer at point of customers' withdrawal Shareholders • The PVST4 is recognised as an asset on the Solvency II balance sheet along with a related capital requirement • The balance between the two elements evolves over time generating a surplus • The Shareholder Transfer is paid by the With-Profits Fund when customers withdraw funds • The amount of the Shareholder Transfer is equivalent to 1/9th of the value created for the customer5 . Funds can be withdrawn in part or in full when needed 1. Expected Growth Rate; 2. With-Profits Fund; 3. Unit Price Adjustments; 4. Present Value of the Shareholder Transfer; 5. In case the claim value is less than the initial premium, the shareholder transfer will be correspondingly negative for 1/9th of the loss 50

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