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Managed Pension Funds Limited
Solvency and Financial Condition Report
("SFCR")
as at 31 December 2025
General
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Table of Contents
Summary ........................................................................................................................................ 4
Section A: Business and Performance .......................................................................................... 7
A.1 Business 7
A.2 Underwriting performance 8
A.3 Investment performance 8
A.4 Performance of other activities 8
A.5 Any other information 8
Section B: System of Governance ................................................................................................. 9
B.1 General information on the system of governance 9
B.2 Fit and proper requirements 13
B.3 Risk management system including the Own Risk and Solvency Assessment 13
B.4 Internal control system 16
B.5 Internal audit function 16
B.6 Actuarial function 16
B.8 Any other information 17
Section C: Risk Profile ................................................................................................................. 18
C.1 Underwriting risk 18
C.2 Market risk 18
C.3 Credit risk 18
C.4 Liquidity risk 18
C.5 Operational risk 19
C.6 Other material risks 19
C.7 Any other information 20
Section D: Valuation for Solvency Purposes ............................................................................... 21
D.1 Assets 21
D.2 Technical provisions 23
D.3 Other liabilities 25
D.4 Alternative methods for valuation 25
D.5 Any other information 25
Section E: Capital Management ................................................................................................... 26
E.1 Own funds 26
E.2 Solvency Capital Requirement and Minimum Capital Requirement 27
E.3 Differences between the standard formula and any internal model used 28
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E.4 Non-compliance with the Minimum Capital Requirement and non-compliance with the Solvency Capital Requirement 28
E.5 Any other information 28
Annexure 29
Appendix 1 – Reporting templates 30
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Summary
Business model and strategy
Managed Pension Funds Limited (“MPFL” and “the Company”) is a UK-based insurance company authorised by the Prudential Regulation Authority (“PRA”) and regulated by the Financial Conduct Authority (“FCA”) and the PRA. Its principal activity is to provide pooled investment management services to pension schemes and reinsurance platforms under unit-linked life insurance contracts. The Company’s client base is predominantly in the UK.
The Company offers only unit-linked contracts that offer no investment or liquidity guarantees, and that pass investment and liquidity risk onto the policyholder. The Company outsources operational activities to State Street Global Advisors Limited (“SSGAL” or “SSGA UK”) through an outsourced services agreement under which SSGAL is liable for losses resulting from this activity. SSGAL provides investment management, sales, marketing, administration and support services to the Company. The costs to the Company for the provision of these services are met out of the Company’s fees charged to policyholders, plus any investment management fees deducted from specific funds less a retention amount due to MPFL. This retention is to enable the Company to meet its direct administrative expenses and to maintain a sufficient capital buffer so as to meet its regulatory obligations. The time horizon used by the Company for its business planning is rolling three years.
System of governance
MPFL has in place a system of governance designed to be fully compliant with Solvency II and the Senior Managers and Certification Regime, and appropriate to its business.
The Company has developed an Own Risk and Solvency Assessment (“ORSA”) framework under the UK Solvency II rules set out in the PRA Rulebook to identify the risks and quantify their impact on the economic capital.
The rules applicable to MPF, including those relating to MPF’s regulatory valuation and disclosures as at 31 December 2025, are materially unchanged from those which applied at 31 December 2024.
MPFL’s board (“the Board”) comprises a Non-Executive Chairman, three additional Non-Executive Directors, and two further Executive Directors. It meets at least quarterly and has overall responsibility for the governance of the Company.
The Board delegates certain responsibilities to the Audit Committee. The Board also delegates certain day-to-day management responsibilities of the Company to the MPFL Working Group (“Working Group”), which comprises representatives from areas including Product, Operations, Risk, Finance, Legal, Compliance, Sales and Marketing, and Investment.
The below key functions are also established to support the Board in carrying out its responsibilities.
• Risk Management Function;
• Compliance Function;
• Internal Audit Function;
• Actuarial Function; and
• Investment Management Function.
In compliance with Solvency II and the PRA’s Senior Managers and Certification Regime in December 2025, MPFL has policies and procedures in place to ensure that all persons in these capacities meet the requirements and this assertion is reviewed on an ongoing basis.
Key risks
MPFL is run on a risk-averse basis and writes only unit-linked pension business that offers no guarantees on performance to policyholders. The risks of MPFL unit-linked assets are borne by the policyholders as explained in the policyholder disclosures. Investment risk is absorbed by the policyholders, since they fully fund the sub-funds and the entire return or loss of the sub-funds accrue to the policyholders, less specified fees which compensate the investment manager, administrator, securities lending agent and custodian for their services.
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In running the business and managing its investments, MPFL is exposed to the following risks in the Solvency II Standard Formula module:
• Operational Risk;
• Market Risk (including Interest Rate, Equity, Spread, Currency, and Concentration risk);
• Counterparty Default Risk; and
• Life Underwriting Risk.
Underwriting and investment performance
As explained above, MPFL writes only unit-linked pension business that offers no guarantees on performance to policyholders and therefore no traditional underwriting is required. As a result, the unit-linked assets and liabilities are closely matched.
The investment income from shareholder assets in the reporting period 2025 was £336,038 (2024: £383,995).
The tables below provide analysis of policyholder assets and the technical provisions it matches.
Assets held for unit-linked contracts 2025 £’000
2024 £’000
At 1 January - Assets held for unit-linked contracts 33,534,681 37,244,842
Premiums written 5,579,232 9,482,269
Claims incurred (20,515,045) (18,622,125)
Investment return (net of all charges) 2,977,359 5,429,695
At 31 December - Assets held for unit-linked contracts 21,576,227 33,534,681
Inflow to policyholder funds was £5.6bn (2024: £9.5bn) and the level of outflow was £20.5bn (2024: £18.6bn). The driver of net outflows was a trust-based defined contribution workplace pension scheme divesting in passive funds. The investment return of £3.0 billion was driven by investing in passive equity funds. This resulted in an equivalent year-on year decrease in the value of unit-linked assets held to cover unit-linked liabilities. In 2024 net outflows of £9.1 billion which when combined with a £5.4 billion investment gain resulted in a decrease of £3.7 billion in the value of assets held to cover unit linked liabilities.
Technical provisions 2025 £’000
2024 £’000
Financial Statements technical provisions 21,576,227 33,534,681
Value of In-Force (“VIF”) (96) (113)
Risk Margin 153 187
Solvency II technical provisions 21,576,284 33,534,755
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Capital requirement and own funds structure
The company determines its own solvency needs using the Standard Formula. As per the MPFL Capital Management Policy, the Board has set a capital ratio in excess of 210%. The table below provides the capital requirement and own funds structure of MPFL.
2025 £’000
2024 £’000
Ordinary share capital (gross of own shares) 5,000 5,000
Reconciliation Reserve after deductions 11,520 10,235
Total available own funds 16,520 15,235
Solvency capital requirement (SCR) 3,953 4,933
Minimum capital requirement (MCR) 3,500 3,500
Ratio of Eligible own funds to SCR 418% 309%
Ratio of Eligible own funds to MCR 472% 435%
The total available own funds are classified as Tier 1 unrestricted. This also equates to own funds available and eligible to meet the Solvency Capital Requirement (“SCR”) and the Minimum Capital Requirement (“MCR”). MPFL does not apply matching or volatility adjustments. Also, no transitional adjustments have been applied. The capital coverage decreased in the year because of an increase in the operational risk capital requirement component of the SCR.
Throughout the reporting period, the Company has maintained eligible capital above its calculated SCR.
Significant business or other events
No other significant business changes or other events with material impact on the solvency and financial condition occurred over the reporting period.
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Section A: Business and Performance
A.1 Business
Company structure
MPFL is a wholly owned direct subsidiary of State Street Global Advisors Inc (“SSGA Inc.”), which is wholly owned by State Street Corporation (“SSC”), the US-based parent company of the State Street financial services group (the “Group”).
The Group organisational structure is as follows as at 31 December 2025:
The Company operates as an integrated part of the Group and has outsourced all investment management, client facing and back-office services to other Group companies through contractual agreements. The company has no employees.
Supervisory authority
MPFL’s regulators are:
PRA, 20 Moorgate, London, EC2R 6DA.
FCA, 12 Endeavour Square, London, E20 1JN.
SSGA Inc.’s regulators are:
Federal Deposit Insurance Corporation (“FDIC”), 550 17th Street, NW, Washington, DC 20429.
Federal Reserve (“Fed”), 20th Street and Constitution Avenue NW, Mail Stop K-300, Washington, DC 20551.
External auditor
MPFL’s external auditor is: PKF Littlejohn LLP, 12 King Street, Leeds LS1 2HL.
Actuarial Function
MPFL’s Actuarial Function is performed by WTW, 51 Lime Street London, England EC3M 7DQ.
State Street Global Advisors Inc.
(incorporated in the Commonwealth of Massachusetts, in the United States of America)
Managed Pension Funds Limited
(incorporated in England and Wales)
State Street Corporation
(incorporated in the Commonwealth of Massachusetts, in the United States of America)
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Significant business or other events
No significant business or other events occurred over the reporting period that had a material impact on MPFL.
A.2 Underwriting performance
MPFL writes only unit-linked pension business that offers no guarantees or otherwise provide any benefits beyond the return of assets under management. As a consequence, no traditional underwriting is required.
With regards to the unit-linked pensions business, the costs and rewards of investing are passed on to policyholders. The entire return or loss of the sub-funds accrue to the policyholders, less specified fees which compensate the investment manager, administrator, securities lending agent and custodian for their services. The unit-linked assets and liabilities are therefore closely matched. As MPFL does not undertake traditional underwriting activities, there is no quantitative information on current or previous underwriting performance to report.
A.3 Investment performance
MPFL outsources investment management and operational activities to SSGAL through an outsourced services agreement. The design of MPFL is as an investment vehicle. Though the legal form of organisation is as an insurance entity issuing policies to its policyholders, the payout under the policies is based solely on the returns of specified MPFL sub-funds that policyholders invest in, and which are managed in accordance with specified investment objectives.
The investment performance of the unit-linked funds has no direct impact on MPFL’s performance, other than through the seed capital that MPFL places into new unit-linked funds. These seeding investments in equity and fixed interest securities represented 5.9% of MPFL own funds at 31 December 2025.
MPFL’s shareholder assets are predominantly held in a highly rated liquid cash or near cash equivalent, SSGA Liquidity PLC State Street GBP Liquidity Fund (“SSGA Liquidity Fund”), although, as noted above, shareholder assets may also be used to seed new unit-linked funds from time to time, subject to limits approved by the Board.
MPFL’s other financial investments accounted for at fair value through profit or loss generate realised gains and losses on disposal and interest receivable which is recognised in the income statement on an accrued basis and unrealised gains and losses representing the difference between carrying value of seeding investments at the balance sheet date and their purchase price.
The income from shareholder assets in the reporting period was £336,038 (2024: £383,995). The decrease year- on year is a result of decrease in yield available on money market funds as compared to 2024.
There are no securitised investments.
A.4 Performance of other activities
MPFL retains a fee income upon collection of its policy charges and pays the remainder to SSGAL as investment management fees under an investment management agreement. The retention is to enable the Company to meet its day-to-day direct administrative expenses and maintain a sufficient capital buffer to meet its capital requirements.
The charge paid to SSGAL is intended to cover all the costs in relation to the Group outsourced activities.
MPFL’s financial profile is not expected to change materially over the planning period.
The Company has no leasing arrangements in place.
A.5 Any other information
There is no other information regarding MPFL’s business and performance to add as all relevant information has been provided.
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Section B: System of Governance
B.1 General information on the system of governance
The Board is comprised of a Non-Executive Chairman, three additional Non-Executive Directors, and two further Executive Directors . It meets at least quarterly, and its principal roles and responsibilities include:
• Setting (reviewing and amending as appropriate) the parameters of any delegations and any authorities to officers and staff engaged within the business and acting on behalf of the Company, including granting signing authorities and/or powers of attorney;
• Reviewing and ensuring the delineation of responsibilities for the Board and members of management of the Company, in particular lines of responsibility at the Company, immediate Parent and Group with respect to risk, compliance, legal, finance and audit;
• Overseeing, implementing and reviewing compliance with the Company’s Articles of Association and corporate governance structure;
• Determining the goals and strategies of the Company in the context of the Group and Group strategy and overseeing their implementation;
• Reviewing and approving material new products and services and other business proposals relevant to the Company and its business;
• Ensuring that the Company has sufficient resources including capital and key and experienced staff for the business to meet its objectives and effectively manage risk;
• Considering the adequacy of all management information (and, where necessary requiring its enhancement) and reviewing, monitoring and, where applicable, approving standard reporting on the financial performance of the Company;
• Reviewing the risk appetite statement and monitoring Company performance with respect to risk concentration, liquidity and capital; and
• Modelling, fostering and monitoring the development of a sound culture within the Company and encouraging honest and ethical conduct by the Company and avoiding or appropriately managing conflicts of interest in accordance with the Group’s Standard of Conduct and applicable law and regulation.
The Board has delegated certain responsibilities of the Company to an Audit Committee.
The Board has delegated certain day-to-day management responsibilities of the Company to the Working Group, which comprises representatives from areas including Product, Operations, Risk, Finance, Legal, Compliance, Sales and Marketing, and Investment.
The Working Group’s responsibilities include:
• All matters concerning the governance of MPFL;
• Reviewing periodic reporting and other applicable management information for MPFL, including key material risks, compliance, financial, operational or other relevant indicators and recommending or initiating remedial action where appropriate;
• Reviewing and monitoring major outsourcing arrangements that impact MPFL;
• Monitoring adherence to the risk appetite and risk tolerance established by MPFL. Reviewing the current risk exposures for MPFL in relation to the stated risk appetite and tolerance and recommending remedial action, where appropriate;
• Reviewing and approving Group policies that apply to MPFL and recommending revisions, where appropriate; reviewing significant exceptions or breaches to policies and guidelines impacting MPFL and initiating or recommending remedial action, where appropriate;
• Escalating significant matters to be reported to the Board; and
• Periodic review of the MPFL Management Responsibilities Matrix; monitoring the ongoing appropriateness of identified key functions, key function holders, Senior Manager Functions, and the allocation of prescribed responsibilities.
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The Board delegates oversight of the Company’s corporate and fund governance to the Working Group, including those matters delegated by the Company to SSGAL which is overseen by the State Street Global Advisors Limited Senior Management Committee (“SSGA UK SMC”).
The Working Group and the SSGA UK SMC (through MPF’s Chief Executive Officer) escalate significant matters to the Board as necessary.
There are various governance committees within the Group, which review and set policies and procedures for the entities operating within the UK and, as applicable, Europe or globally. These committees have responsibilities to the Board and to other Group entities. They are established to assist and support the Board in key strategic matters, review business activity and risks, and provide support in certain matters.
Roles and responsibilities of key functions
Risk Management Function
The Risk Management function assists the Board, Working Group and Audit Committee governing bodies within the Company in the effective operation of the risk management framework. The designated SMF4 has the responsibility of the Chief Risk Management function. The Chief Risk Management function reports to both the Board and the Working Group in relation to setting and controlling risk exposure.
The Chief Risk Management function conducts the following tasks as applicable to MPFL and detailed in the Risk Management Framework (“RMF”):
• Assisting the administrative, management or supervisory body and other functions in the effective operation of the risk management framework;
• Monitoring the risk management framework;
• Monitoring the general risk profile of the undertaking as a whole;
• Detailed reporting on risk exposures and advising the Working Group and the Board on risk management matters, including in relation to strategic affairs such as corporate strategy, mergers and acquisitions, and major projects and investments;
• Identifying and assessing emerging risks; and
• Working closely with the actuarial function holder.
Compliance Function
As part of its internal control system, MPFL has an independent Compliance Function that reports to both the Board and the Working Group on regulatory matters and findings from the execution of the Company’s Compliance Oversight Programme (“COP”). As part of MPFL’s COP, a compliance risk assessment is carried out which identified key compliance risks that contribute to the development of the annual Compliance Risk Testing (“CRT”) Programme which is executed throughout the year. The Head of State Street Investment Management UK/MEA Compliance has been designated with the responsibility of performing the Compliance function for MPFL. The Head of State Street Investment Management UK/MEA Compliance reports to both the Board and the Working Group on Compliance matters.
Internal Audit Function
In accordance with SUP 10C.6A.6 and Chapter 5 of the Conditions Governing Business part of the PRA Rulebook, MPFL has an independent Internal Audit Function, whose remit enables them to assess the adequacy and effectiveness of MPFL’s internal control system and the system of governance that is in place.
Internal Audit provides the following services:
• Establishing, implementing and maintaining an audit plan setting out the audit work to be undertaken, taking into account the Company’s activities, system of governance and activities outsourced to other Group companies;
• Reporting the audit plan to the Audit Committee;
• Submitting a written report on its observations, management actions and an overall opinion at the project level;
• Validating the closure of issues based on the implementation of agreed management actions;
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• Evaluating the adequacy and effectiveness of MPFL’s internal control system and other elements of the system of governance; and
• Conduct special reviews, provide business control consulting services and participate in due diligence work as requested by management, the SSC Examination and Audit Committee or the Board of Directors.
• As SMF5, the Head of Internal Audit or their delegate attends MPFL’s Audit Committee and Board meetings at such times as required. State Street Corporations Board of Directors and Audit Committee receive copies of all audit reports in relation to the provision of the internal audit services to MPFL. Group companies’ management, related to outsourced MPFL activities, are required to prepare a corrective action plan to address issues raised in reviews of MPFL, where applicable.
Actuarial Function
MPFL has a Statement of Work in place with WTW for the provision of effective actuarial services to the business as set out in SUP 4.3 and Chapter 6 of the Conditions Governing Business part of the PRA Rulebook.
The appointment requires the Chief Actuary, in his role as SMF20, to attend Audit Committee and quarterly Board meetings. The Chief Actuary has a fixed item on the agenda, providing updates to the Board on relevant matters impacting MPFL, any work currently being undertaken and makes recommendations on any issues impacting the business.
Investment Management Function
The Chief Executive provides oversight over the investment management function which delegates investment management by MPFL to SSGAL and provides regular reports to the Board.
Finance Function
In accordance with the requirements of SUP 10C.6A.3, the Finance function:
• Prepares a business plan that includes capital planning as part of the ORSA process, covering a three-year horizon;
• Monitors the adequacy of financial resources, including capital, following any significant changes to the business profile and strategy of MPFL and on a quarterly basis formally reports to the Board; ensures MPFL at all times meets its financial resources requirement and provides Financial Returns to the FCA and PRA on a timely basis; and
• Ensures that any breaches, or potential breaches, of the financial resources’ rules are notified to the Compliance Officer promptly.
The Chief Finance Function as SMF2 and Key Function holder ensures that the Board receives timely and accurate financial information in order for them to monitor the business effectively.
Material changes to system of governance
No material changes to the system of governance occurred during the reporting period.
Remuneration policy and practices
The Company has no employees, however MPFL’s Board has adopted the UK remuneration policy that applies to the Board and those group employees providing services to MPFL under delegation agreements. As part of strong remuneration governance oversight, an independent UK Remuneration Committee (“UK RemCo”) is in place to oversee the implementation of, and compliance with, the remuneration policy. The UK RemCo’s other primary duties are:
• the oversight of the process for identifying and determining the remuneration of UK Identified Staff;
• the oversight of decisions made by those with authority to determine the remuneration of UK Identified Staff; and
• holistic oversight of regional remuneration matters, with a view providing a central forum for consideration of issues and thereby enhancing consistency of approach across the Group in EMEA.
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In line with the Solvency II Regulation, the policy is designed to discourage excessive risk-taking and incorporates measures aimed at avoiding conflicts of interest.
Key Remuneration Principles are:
• The emphasis on total rewards, which means a focus on the total value of all components of pay packages (i.e., salary, benefits and incentive remuneration), rather than on the value of each one individually;
• Targeting the aggregate annual value of the Total Rewards Program to be competitive with business peers;
• Unequivocally supporting equal pay for work of equal value;
• Funding for the total rewards program is subject to affordability and is designed to be flexible based on corporate performance;
• Differentiating pay based on performance. Even in years when funding for the Total Rewards Program is constrained, the Group differentiates pay by individual in order to reward our highest performers;
• The alignment of employees’ interests with shareholders’ interests by deferring a portion of incentive remuneration at increasing percentages for employees with higher incentive remuneration awards, and delivery of a portion of incentive remuneration in equity-based vehicles with a higher proportion in equity for senior executives; and
• Having remuneration plans designed to comply with applicable regulations and related guidance, including aligning incentive remuneration with appropriate risk management principles. The Group provides incentives that are designed not to encourage unnecessary or excessive risk-taking. There are established process controls and oversight, including incorporation of risk-based metrics into incentive pool funding determinations and individual award decisions. In addition, executive incentive compensation plan awards include significant levels of deferred remuneration and equity-based remuneration, which are further subject to ex-ante and ex post adjustments (malus forfeiture and clawback inclusive).
In jurisdictions such as the UK where a maximum ratio between fixed and variable remuneration exists, robust governance processes are in place to oversee compliance with such ratios. In the UK, these are the responsibility of the UK RemCo.
Employees of the Group providing the outsourced services are also offered the opportunity to participate in the Group flexible benefits. Most benefits are generally consistent across all job grades in a market, although sometimes benefits may vary by job grade or other factors based on prevailing market practices or applicable regulations. Benefits include, but are not limited to, retirement and savings plans as well as health, disability, death, and ancillary benefits which vary by location based upon market practice. The Group does not currently operate any discretionary pension schemes.
Additionally, MPFL has developed a methodology to identify individuals as Solvency II Staff who perform roles or conduct activities that can impact the risk profile of MPFL. The list of Solvency II Staff identified as a result of this process is approved by UK RemCo.
All Solvency II Staff receive a detailed written communication including background information, MPFL’s position and obligations, and the implications of being Solvency II Staff. The communication also outlines the prohibition on employing personal hedging strategies to undermine the risk alignment effects embedded in their remuneration arrangements.
A link is included in the communication to refer individuals to relevant guidance. All Solvency II Staff are required to acknowledge the communication and confirm receipt and understanding by completing an attestation.
Control Functions have reporting lines which are independent from the business units which they supervise and the global management for control functions is responsible for determining remuneration of control function staff, within overall Group guidelines. Funding for these employees is based on overall corporate results and not by reference to the business units which individual Control Function employees supervise to avoid potential conflicts of interest.
Material transactions
No material transactions were entered into during the reporting period with shareholders, with persons who exercise a significant influence on the undertaking, and with members of the Board or Working Group.
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Assessment of adequacy of system of governance
MPFL has in place a system of governance designed to be fully compliant with Solvency II and the Senior Managers and Certification Regime in December 2025 and appropriate to its business. As part of these obligations, MPFL is required to have in place a clear organisational structure and segregation of duties. These are set out in MPFL’s Management’s Responsibilities Matrix, which is owned by the Chief Executive and reviewed quarterly by the Working Group. MPFL also has in place permanent Risk Management, Compliance, Internal Audit and Actuarial functions. In addition, it also has in place a suite of policies relevant to its activities. These are reviewed at least annually. MPFL continues to review the adequacy of its systems of governance to ensure it continues to remain appropriate and proportionate to the activities of the business.
B.2 Fit and proper requirements
Under article 294(2) of the Solvency II Regulation and the PRA’s Senior Managers and Certification Regime in December 2025, MPFL is obliged to ensure that all persons who run the organisation or have other key functions are fit and proper. MPFL has policies and procedures in place to ensure that all persons have both the skills and experience that meet the requirements deemed fit and proper. These assessments are made both prior to MPFL submitting any application for regulatory approval to the PRA and on an ongoing basis.
B.3 Risk management system including the Own Risk and Solvency Assessment
Risk management strategy and objectives
The key objectives of MPFL’s risk management strategy are to:
• Fully comply with all applicable laws, regulations and corporate policies;
• Ensure MPFL’s financial goals and key business performance metrics are consistent with acceptable levels of risk as agreed by the MPFL Board and defined in MPFL policies;
• Foster a culture of risk excellence that extends across MPFL and all of its activities, inclusive of the MPFL business, driving comprehensive risk mitigation techniques and ensuring that identification and escalation of potential risks represent a core responsibility at all levels.
MPFL’s approach to risk management is documented in the RMF which includes:
• A clearly defined risk management strategy which is consistent with the overall business strategy;
• A clearly defined risk appetite and overall risk tolerance limits;
• A clearly defined decision-making process;
• Written policies that effectively ensure definition and categorisation of material risks by type to which MPFL is exposed, and the approved risk tolerance limits for each type of risk (i.e. risk appetite statement built into RMF); and
• Reporting procedures and processes that ensure that material risks are identified, managed, monitored, and reported, so as to avoid undue concentration of risk.
MPFL is also required to ensure that persons who hold key functions take into account the information reported within the RMF, as part of their decision-making process.
Risk management process
A key step in the risk management process is the identification of risks.
Material Risk Identification (“MRI”) is a significant element of MPFL’s risk management framework and plays an important role in establishing a strong risk culture. It provides the information needed for the Company to consider the full scale and scope of its exposures, to analyse how its business activities might evolve as economic and market conditions change, and to ensure that the Company is operating within the risk appetite defined by the Board.
The MRI process is primary risk identification program and utilises a bottom-up approach to identify the most significant risk exposures across all on- and off-balance sheet risk-taking activities, including credit, market, liquidity, interest rate, operational, fiduciary, business, reputation, and regulatory risks. The primary output from the program is a Company-
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wide Risk Inventory, which is a comprehensive list of the risks that could significantly impact MPFL, irrespective of their likelihood or frequency. The Risk Inventory forms a holistic view of the Company’s risk profile and is used as a foundational element in risk management and capital planning processes. For MPFL, the MRI is undertaken as part of the annual ORSA cycle.
MPFL follows the Group-approved programmes to assess and monitor the material risks of the business:
• Risk and Control Self-Assessment (“RCSA”) - This is a structured workshop-based programme conducted on an annual basis. The programme supports a business assessment of risks and controls used within business activities;
• Loss Event Management, including collection of internal, and monitoring of external, operational loss data and risk events. This provides important information to support the effective management and measurement of operational risk;
• Key Risk Indicators (“KRIs”) - used to monitor the level and trend of the organisation’s risk profile and adherence to risk appetite on at least a quarterly basis. The objective of KRIs reporting is to serve as an “early warning” mechanism that allows managers to take proactive action to manage and mitigate risks as exposure changes. KRIs are a key component of MPFL’s escalation process and communicate material exposures to the Board, Working Group and relevant committees; and
• New Business and Product Review and Approval (“NBPRA”). The primary focus of this process is to evaluate the risk inherent in new business and product proposals to the sponsoring business unit, other business units and Group; and new business or products are considered as part of the formulation of the Business Plan. Additionally any changes in the business profile (e.g. significant new business or products) are considered during the INFRA process.
Implementation and integration
Aligned to corporate policies, risks are monitored and challenged through MPFL’s governance and committee structure. Responsibilities are allocated as follows:
The Board
• Reviews, challenges and approves the MPFL risk appetite;
• Monitors actual risk profile against risk appetite;
• Reviews MPFL’s current risk exposures in relation to its stated risk appetite and tolerance, at least quarterly, and monitors remedial mitigating actions as appropriate and tracks to resolution; and
• Aligns with Group strategy and related risk appetite statements.
The Working Group
• Oversees the production of strategic plans and budgets incorporating MPFL’s overall risk appetite;
• Drives risk awareness and understanding of risk appetite;
• Challenges proposals for metrics, limits and statements;
• Monitors business specific Risk Appetite Statement (“RAS”) metrics, risk limits and KRIs on an on-going basis and escalate breaches to risk;
• Proactively manages mitigation actions agreed in the event of breaches; and
• Ensures risk appetite is considered in the development of new businesses and products.
ORSA process
MPFL undertakes an ORSA on at least an annual basis through the following process:
• Risk identification: Identification of the risks to which the Company is (or will be) exposed, taking into consideration its business model and the business environment in which it operates. Risk identification is performed by the Risk Management function according to all risk types included in SSC’s risk taxonomies, and as required by the regulators. In performing the risk identification analysis, the Risk Management function is supported by all the business, support and governance functions according to their assigned responsibilities and activities;
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• Risk Appetite: The risk appetite provides a clear articulation of MPFL’s willingness and capacity to take on risk and MPFL’s tolerance for loss or negative events. The definition and quantification of the MPFL’s risk appetite is the responsibility of the Board; the Risk Management function provides guidance and recommendations. The Board approves a risk appetite for MPFL incorporating both quantitative aspects relating to minimum capital requirements, and qualitative aspects relating more broadly to compliance with internal and Solvency II requirements;
• Financial Projections: The purpose of financial projection is to outline the main components of the Statement of Financial Position and the Income Statement over the forecast period. Three-year financial projections, based on MPFL’s approved Business Plan, are developed and used as the base case for the ORSA;
• Risk Quantification: Quantification of the internal capital for each measurable risk type recognised within the risk identification phase. The Standard Formula, as deemed appropriate, is used to define the methodology to quantify Pillar 2 risk types;
• Stress Testing: The vulnerability of the Company to exceptional but plausible adverse events is assessed. The Board owns the definition and parameterisation of the stress scenarios, in consideration with applicable Solvency II requirements. The base case financial model is stressed using a range of severe single and combined stress scenarios to determine the profit and capital impact on MPFL, and to inform the quantification of Pillar 2 requirements;
• Aggregation of Capital Requirements: Capital requirements across the risk universe are aggregated to inform the capital adequacy assessment under the Standard Formula approach, where allowance for diversification benefits have been recognised;
• Capital Adequacy: Verification that the Company’s total capital (i.e. its available financial resources) is adequate in terms of size and composition to cover all material risk types to which the Company is exposed. Capital requirements are compared to available resources to confirm that MPFL has adequate capital resources; and
• Preparation of ORSA Report, which is reviewed and challenged by the Actuarial function, Subject Matter Experts (“SMEs”) and the Working Group and ultimately approved by the Board.
The ORSA is integrated into MPFL’s risk management framework and decision-making processes as follows:
• The use of stress testing and scenario analysis are also incorporated within the Company’s forecasting of revenues, costs, expected losses and potential regulatory capital requirements;
• Inclusion of ORSA impacts as a standing item on the Working Group and the Board agendas;
• Integration of an assessment of impacts on the future risk management or solvency of the Company into key business decisions such as the launching and seeding of new unit-linked funds;
• The ORSA workshops serve to engage business managers in the risk management processes and enhance risk awareness in the Company;
• The risk identification process has been embedded across the business through manager involvement in the process through meetings and workshops;
• The ORSA is used as a core input to the strategic decision making in the Company, in particular in the acquisition of new business;
• The existing risk identification methodology associated with NBPRA process, as well as other corporate procedures, considers the ORSA implication of any new initiative impacting the Company as a core input to the decision-making process; and
• Regular updates of the quantification of material risks in the ORSA are presented to the Board.
• All policy documentation associated with this ORSA is reviewed at least annually.
ORSA review and approval
As noted earlier in this section, the draft 2025 ORSA Report, based on Statement of Financial Position as at 31 December 2024 was reviewed and challenged by the Working Group as an integral part of the ORSA process, and the final ORSA Report was reviewed and approved by the Board on 25 September 2025.
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Determination of own solvency needs
MPFL determines its own solvency needs using the Standard Formula for Pillar 1 and the ORSA internal process to assess its risk and solvency positions under business-as-usual and severe stress scenarios for Pillar 2.
Interaction between capital management activities and risk management system
The ORSA forms an integral part of the risk and capital management processes of MPFL. The Board uses the ORSA to maintain an effective link between the Company’s risk profile and its capital, thus ensuring that MPFL has adequate capital to cover its risks and operate effectively within its capital framework. In particular, the Board reviews MPFL’s capital adequacy as outlined in the ORSA at each Board meeting or more frequently as necessary, following any significant changes to the business profile and strategy of the Company.
B.4 Internal control system
Internal Control System
MPFL has internal control procedures and processes in place with clear designated lines of responsibility and reporting arrangements. The Company’s internal control system ensures compliance with applicable laws and regulations and facilitates the identification of non-compliance risk and the assessment of the impact on MPFL of any changes to the legal and regulatory environment.
Compliance function
The Company has an independent Compliance Function that reports to both the Board and the Working Group on regulatory matters and findings from the execution of the Company’s Compliance Oversight Programme.
B.5 Internal audit function
As noted earlier, MPFL has an independent Internal Audit Function provided by State Street Corporation for the provision of internal audit services. Their remit enables them to assess the adequacy and effectiveness of MPFL’s internal control system, Information Technology (“IT”) including cyber security robustness and the system of governance that is in place.
Internal Audit attends all MPFL’s Audit Committee meetings and also its Board meetings at such other times as required. The Board and the Working Group determine what actions are to be taken with respect to each internal audit finding and recommendation, and ensure those actions are carried out. This function is independent and no conflict of interest arises for the persons carrying out the role.
B.6 Actuarial function
The services pertaining to Actuarial Function are rendered by WTW under a formal Statement of Work agreed with MPFL. The State Street Investment Management EMEA Chief Finance Officer is the SMF2 role holder who provides the internal oversight of the Actuarial Function.
The responsibilities of the Actuarial Function in MPFL cover:
• Coordination of the technical provisions;
• Data quality;
• Monitoring experience;
• Underwriting policy and reinsurance arrangements;
• Internal and external actuarial reporting; and
• Contributing to the risk management system.
Additionally, the Actuarial Function provides advice and an actuarial opinion on asset-liability valuation and matching, the current and prospective solvency position, stress and scenario tests for technical provisions and asset-liability management, and other forms of risk transfer or risk mitigation techniques for insurance risks.
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The requirement to coordinate the calculation of the technical provisions can be summarised as the requirement for the Actuarial Function to provide an opinion on whether the technical provisions have been calculated in accordance with the Technical Provision and Technical Provisions - Further Requirements parts of the PRA Rulebook, and to ensure any approximations and/or limitations have been addressed appropriately. The Actuarial Function is directly responsible for ensuring that the assumptions and methodologies used to value the unit-linked business are appropriate. The Actuarial Function is also responsible for reviewing the SCR.
The Actuarial Function assesses the consistency of the data used in the calculation of the technical provisions against the data quality standards as set out in the Technical Provision and Technical Provisions - Further Requirements parts of the PRA Rulebook, in particular by assessing the adequacy of the data checks carried out by MPFL. The Actuarial Function carries out independent high-level checks on the information supplied to the Actuarial Function for consistency with MPFL’s report and financial statements, including checks that the individual asset data supplied reconciles with the total non-unit and unit-linked funds and that any movements can be explained.
The Actuarial Function verifies the best estimate assumptions used in the calculation on the basis of an annual assessment of the expenses and charges on policies, based on actual experience and the information supplied by the Finance Function. External information on risk-free yields and inflation is expected to be updated on a quarterly basis.
Underwriting policy includes the terms on which new business is written; the Actuarial Function will advise on the impact on the technical provisions and the SCR of any material changes in the terms on which MPFL writes new business, including the introduction of any new products.
The Actuarial Function reports to the Board quarterly and promptly reports to the Working Group any issues arising, either from the information provided or through the work undertaken, that may have a material impact on the financial position of MPFL. The Actuarial Function also provides input to the Risk Management Function on the risks MPFL runs in so far as they may have a material impact on MPFL’s ability to meet its liabilities to policyholders and on the capital needed to support the business, including regulatory capital requirements.
B.7 Outsourcing
An EMEA Outsourcing Policy exists, that is applicable to all UK businesses, legal entities and UK-based branches, and as such is inclusive of MPFL.
MPFL has appointed a UK senior manager who is responsible for oversight of the business lines’ and corporate functions’ portfolio of outsourced arrangements (the Outsourcing Oversight Manager); and in relation to services covered under an outsourcing arrangement, a UK Outsourcing Arrangement Owner for each arrangement who is responsible for ensuring correct documentation for each arrangement and ongoing oversight of each arrangement.
It has developed and implemented a programme to:
• Identify all internal and external arrangements that are categorised as material by the FCA;
• Ensure appropriate contractual agreements are in place;
• Ensure efficient oversight of outsourcing arrangements, including KRI metrics and reporting to the Working Group and the Board;
• Undertake annual outsourcing assessments of in-scope arrangements;
• Provide oversight of IT resilience initiatives underway in group entities.
The oversight of the outsourced operating model is the responsibility of the Board. The Board delegates to the SSGA UK SMC oversight of the Company’s corporate and fund governance, including those matters delegated by the Company to State Street Global Advisors Limited. The Working Group and the SSGA UK SMC escalate significant matters to the Board as necessary, and report to the Board on their actions under this delegation on a regular basis.
B.8 Any other information
There is no other material information regarding MPFL’s system of governance to add.
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Section C: Risk Profile
C.1 Underwriting risk
MPFL writes only unit-linked pension business that offers no guarantees or otherwise provide any benefits beyond the return of assets under management. The Company is therefore not exposed to traditional underwriting risk; only the life expense risk is applicable that stem from administrative expenses incurred by MPFL.
The Life Expense Risk for MPFL as at 31 December 2025 was £0.01m (2024: £0.01m).
C.2 Market risk
Market risk arising on the unit-linked funds is borne by policyholders, as explained in policyholders’ disclosures. Market risk for MPFL relates primarily to price fluctuations in the funds where its shareholder assets are placed. As at 31 December 2025, MPFL has £0.98m (2024: £0.92m) of seed money invested in various unit-linked funds and £12.54m (2024: £12.01m) invested in SSGA Liquidity Fund. The seed money is placed in a range of sub-funds with exposure to, for example, equities and liquidity funds. Therefore, MPFL seed capital is exposed to the impact of changes in unit values of linked assets invested in equity funds. Seed money is removed from the funds if not required.
The holdings in funds in currencies other than GBP amounted to £0.69m triggering an exposure to currency risk.
The Spread and Concentration risk on shareholder assets is driven by £12.54m investment in the SSGA liquidity fund and £0.28m seed money invested in the SSGA liquidity fund.
Interest rate risk is the possibility that changes in interest rates will result in higher or reduced income from MPFL’s interest bearing financial assets. MPFL does not hold interest bearing liabilities. MPFL’s shareholder assets exposed to interest rate risk are part of the SSGA Liquidity Fund. Interest earned or the unrealised gains or losses on valuation of this exposure are reported as part of the Investment Income.
The total capital requirement in respect of Market Risk calculated using the Standard Formula, as at 31 December 2025 was £0.59m (2024: £0.50m). There were no material changes over the reporting period.
C.3 Credit risk
Credit risk is defined as the risk of financial loss if a counterparty, borrower or obligor, collectively referred to as counterparty, is either unable or unwilling to repay borrowings or settle a transaction in accordance with underlying contractual terms.
Credit risk for MPFL stems from its assets held in the form of cash deposits with a credit institution and other assets held within the SSGA Liquidity Fund and policyholder debtors.
MPFL’s cash at bank counterparties are limited in number and have acceptable credit ratings, and the risk profile of these counterparties is aligned with the assumptions underlying the Standard Formula for Type 1 exposures.
With regards to amounts owed by policyholders, MPFL has the contractual ability to recover any unpaid fees from units allocated to the relevant policy and hence the risk is only on any exposure in excess of the policyholder’s surrender value. Given the controls in place, any such situations would be extremely rare and if they were to occur, the fees payable to SSGAL would be reduced rather than MPFL suffer detriment.
The capital requirement for counterparty default risk calculated using the Standard Formula, as at 31 December 2025 was £0.32m (2024: £0.21m). There were no material changes over the reporting period.
C.4 Liquidity risk
Any liquidity risk arising on the unit-linked funds is borne by policyholders, as explained in policyholder disclosures. The Board and the Working Group monitor the liquidity of all unit-linked funds.
MPFL has a liquidity requirement, relating to its ongoing operational expenses and tax liabilities. Cashflows are managed to ensure MPFL’s liabilities can be settled as they fall due. There were no material changes over the reporting period.
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C.5 Operational risk
This risk is defined as the risk of errors or omissions arising from inadequate or failed internal processes with the potential for financial, reputational or franchise harm. MPFL recognises that performance of investment servicing and investment management activities have intrinsic operational execution risk that cannot be managed to zero.
Outsourcing risk is the risk that engaging external providers (third party outsourcing) or an affiliated entity (intragroup outsourcing) to provide systems or services, which MPFL itself would otherwise perform, could adversely impact performance. Outsourced services are governed by arm’s length agreements which require the service provider to make good any operational losses on behalf of the MPFL’s client or fund, arising from the negligence of the service provider, willful default or fraud, or in respect of SSGAL, consequential losses.
Operational execution risk is addressed by identifying, collecting and analysing operational risk data; utilising the data to quantify its operational risk exposure and by implementing a comprehensive operational risk management and governance structure. The Company seeks to ensure this risk is managed to a level consistent with achieving its strategic, financial and operational objectives with the goal of having an effectively designed and well-controlled operating environment within its established appetite.
Further, the Group companies provide operational services to MPFL. These services are governed by arm’s length agreements which require the service provider to make good any operational losses on behalf of an MPFL policyholders or an MPFL fund, arising from its negligence of the service provider, willful default, fraud, or in respect of SSGAL, consequential losses. These services include an IT component which address IT resilience and cyber security. The oversight of all outsourced functions is the responsibility of the Board.
The operational risk capital requirement is determined as 25% of expenses incurred during the year. Fluctuations in the MPFL AUM impact the SCR calculation in two ways by increases/decreases in:
• Management fees remitted to SSGAL (fees remitted to SSGAL are considered as “expenses” for MPFL); and
• Fund Investment expenses.
The Pillar 1 capital requirement for this risk, calculated using the Standard Formula, as at 31 December 2025 was £3.64m (2024: £4.69m). There were no material changes over the reporting period.
C.6 Other material risks
Group Risk
Group risk is defined as the risk that the financial position of a Company may be adversely affected by its relationships (financial or non-financial) with other entities in the same group or by risks which may affect the financial position of the whole group, for example reputational contagion.
MPFL is a subsidiary of SSGA Inc. which sets the global State Street Investment Management strategy. As a member of a larger group, MPFL is exposed to Group risk through the following areas:
• Contagion risk as a result of reputational damage or group financial pressures; and
• Intra-group exposures with operational dependencies between entities.
While it is unlikely that the Parent will fail, if it were to, MPFL would need to evaluate the viability of its business model.
ESG and Sustainability risk
Sustainability Risk is defined as an environmental, social, or governance (ESG) event or conditions that could result in an actual or a potential material negative impact on the Company. Sustainability risk is inclusive of Climate Risks, and hereinafter referred to in aggregate as “ESG”.
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MPFL recognises that environmental, social, and governance factors can impact a financial institution’s risk profile in multiple ways, including, but not limited to, the following:
• Environmental risks, such as climate change, pollution, or natural disasters, can affect the value of assets, increase insurance costs, and create legal liabilities for a firm. Physical and transition climate related financial risks may have an impact on operations, however, risk identification programs indicate that this may give rise to direct financial, operational, and strategic risks, including through physical and transition impacts on assets, business operations, and evolving client demand.
• Social risks such as labour practices, human rights violations, or community impacts can harm a firm’s reputation, lead to regulatory fines, or trigger legal action.
• Governance risks such as broad diversity, executive pay, or bribery and corruption, can affect a firm’s decision making processes, increase the likelihood of unethical behaviour, and damage stakeholder trust.
MPFL aims to integrate ESG factors as transversal risks into the overall risk management framework in alignment with guidance from regulators and ESG bodies in its jurisdiction. In doing so, MPFL seeks to ensure ESG considerations are taken into account when assessing and managing risks across different areas of its operations, including, but not limited to investment decision making, corporate governance, and compliance. In line with its investment managers’ approaches, ESG considerations are assessed alongside traditional financial risk factors, and are not applied in a prescriptive manner unless required by regulation or client mandate.
Risk mitigation techniques
MPFL is run on a risk-averse basis and writes only unit-linked pension business that offers no guarantees on performance to policyholders. As a result, the risks that remain with MPFL are limited.
Reinsurance is not currently used as a risk mitigation technique for MPFL.
C.7 Any other information
There is no other material information regarding MPFL’s risk profile to add.
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Section D: Valuation for Solvency Purposes
For the purpose of regulatory reporting, a comparison of MPFL’s total assets and liabilities reported in the Statutory Financial Statements for the year ended 31 December 2025 with the Solvency II values is summarised below.
2025 Statutory Accounts £'000
2025 Solvency II £'000
Collective Investments Undertakings 13,513 13,513
Assets held for index-linked and unit-linked contracts 21,576,227 21,576,227
Insurance and intermediaries receivables 2,265 2,265
Receivables (trade, not insurance) - Cash and cash equivalents 15,896 15,896
Total assets 21,607,901 21,607,901
Technical provisions - index-linked and unit-linked 21,576,227 21,576,284
Insurance and intermediaries payables 14,872 14,872
Payables (trade, not insurance) 225 225
Total liabilities 21,591,324 21,591,381
D.1 Assets
Value of assets
The valuation methodology used for each type of asset reported in the Solvency II Balance Sheet has been provided as follows:
Collective Investments Undertakings
Collective Investments Undertakings are investments that are held in the SSGA Liquidity Fund £12.54m (2024: £12.01m), with an additional £0.98m (2024: £0.92m) held in unit-linked funds as seed capital. The holdings in SSGA Liquidity Fund are classified as Level 1 and the holdings in seed investment are classified as Level 2 under the Fair Value Hierarchy. These assets are recognised at either fair market value or nominal value (in the case of cash deposits).
The fair value of Level 1 investments is determined using observable, unadjusted quoted prices in active markets for identical assets. Active markets are markets in which transactions occur for the item to be fair valued with sufficient frequency and volume to provide pricing information on an ongoing basis.
The fair value of Level 2 investments is determined using inputs other than quoted prices included within level 1 inputs that are observable, either directly or indirectly through corroboration with market data.
Assets held for index-linked and unit-linked contracts
Unit-linked investment contracts written by MPFL are without fixed terms and their value is dependent on the fair market value of the underlying financial assets and derivatives.
The fair values of the underlying financial assets and derivatives are derived In accordance with the valuation hierarchy set out in the Chapter 6 of the Valuation part of the PRA Rulebook. Methods used maximise the use of observable market inputs for the same or similar instruments and may be grouped as follows:
• Fair value is determined using observable, unadjusted quoted prices in active markets for identical assets (“Level 1”).
• Fair value is determined using inputs other than quoted prices included within level 1 inputs that are observable, either directly or indirectly through corroboration with market data (“Level 2”).
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• Fair value is determined using inputs that are not observable, reflecting assumptions that the market participants may use in pricing an investment (“Level 3”).
The £21.58bn (2024: £33.53bn) unit-linked assets held to cover unit-linked liabilities at 31 December 2025 were valued as follows:
2025 £'000
2024 £'000
Level 1 15,453,699 22,873,532
Level 2 6,005,199 10,567,012
Level 3 1,158 491
Net receivables on unit-linked funds 116,171 93,646
21,576,227 33,534,681
For both 31 December 2025 and 2024, Level 1 valuation applied to listed equities and liquidity funds. Level 2 valuation applied to bonds, mutual funds and derivatives, and Level 3 valuation applied to equity investments that were suspended or unquoted.
Net receivables amounts are non-derivative financial assets with fixed or determinable payments that originate from contracts and are not quoted in an active market. The value per the financial statements is assessed to be equivalent to the value required under Solvency II.
Insurance and intermediaries receivables
Insurance and intermediaries receivables are non-derivative financial assets that are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate method where applicable and less any impairment. This is the valuation method used for the financial statements reporting and the result is assessed to be materially equivalent to the value required under Solvency II.
Cash and cash equivalent
This comprises bank deposits.
Other disclosures
MPFL’s Solvency II Balance Sheet does not include these classes of assets:
• Intangible assets
• Net Deferred tax assets
• Financial or operating lease assets
Explanation of any material differences in valuation bases
There are no material differences between the bases, methods and assumptions used for valuation of these assets for solvency purposes compared to those used in the valuation for the year-end Financial Statements.
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D.2 Technical provisions
Value of technical provisions
The technical provisions in respect of this business are summarised in the table below:
2025 £'000
2024 £'000
Direct Business 18,393,862 26,306,836
Reinsurance Accepted 3,182,365 7,227,845
VIF (96) (113)
Best Estimate Liabilities 21,576,131 33,534,568
Risk Margin 153 187
Technical Provisions 21,576,284 33,534,755
For the type of unit-linked contracts written by MPFL, the best estimate liabilities are calculated as:
• The value of the units allocated to the policies; less
• On a best-estimate basis, the present value of retained fee less administrative expenses projected in the three year Business Plan (the “Value of In-Force”). The decrease in the Value In Force (“VIF”) amount year on year is due to a small increase in budgeted management expenses for 2026 compared to 2025.
Contract boundary
As policyholders cannot be compelled to pay future premiums, the contract boundary is assumed to be immediate and, as a consequence, no account is taken of any future premiums that may be paid after the valuation date in determining the VIF.
Projection period
In accordance Chapter 27 of the Technical Provisions - Further Requirements part of the PRA Rulebook, MPFL uses a simplified approach with a 4-month projection period to calculate its technical provisions that is proportionate to the nature, scale and complexity of the risk underlying its obligations. This reflects the nature of its expense agreements, which mean that changes in the length of the projection term have equal and offsetting effects on the VIF and risk margin such that technical provisions don’t change.
Risk Margin
The risk margin is calculated as a 4% cost of capital charge on the non-market risk components of the SCR, adjusted by a risk-tapering factor which reduces over time. The 4% cost of capital assumption and risk tapering factor of 0.9 are prescribed by the regulations. The non-market risk components are, for MPFL, the life underwriting, counterparty and operational risk components of the SCR. Consistent with the proportionality assessment applied to the Technical Provisions, a short projection period is used for the calculation of the risk margin and so the risk tapering factor does not impact the calculation of the risk margin for MPFL. It is assumed there is no change in the non-market risk components over this period.
VIF
The assumptions used in determining the cash-flows in the calculation of VIF are:
• Retained fee income;
• Expense assumptions; and
• Expense inflation assumption.
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The terms of the investment mandate agreements (and short four-month projection) mean that a surrender assumption is not required when calculating the best estimate liabilities as it would not affect the level of the Technical Provisions.
The fixed expenses are determined using 2026 budget amounts. The budgeted costs allow for expected inflation at a rate of 2.3% during 2026.
As required by the regulations, the risk-free curves used to discount the cash-flows are the risk-free curves as at 31 December 2025 published by the PRA, without the volatility adjustment.
Level of uncertainty associated with the value of technical provisions
For the reasons described above, the simplified approach used does not introduce any uncertainty and therefore no material approximations are used in the calculations.
Explanation of any material differences between valuation bases
The technical provisions are calculated for solvency purposes as:
• The value of the units allocated to the policies; less
• On a best-estimate basis, present value of projected retained fee and administrative expenses; plus
• The risk margin, calculated as a 4% cost of capital charge on the non-market risk components of the SCR. The non-market risk components are the insurance, counterparty and operational risk components of the SCR.
The latter two elements are excluded from the value of the technical provisions used in the financial statements. Assets values are the same in both. A reconciliation of the Statutory Financial Statements and Solvency II technical provisions is shown in the table below:
2025 £'000
2024 £'000
Financial Statements’ technical provisions 21,576,227 33,534,681
VIF (96) (113)
Risk Margin 153 187
Solvency II technical provisions 21,576,284 33,534,755
Use of matching adjustment
No matching adjustment has been applied.
Use of volatility adjustment
The volatility adjustment is not used by MPFL.
Application of the transitional risk-free interest rate-term structure
The transitional risk-free interest rate-term structure has not been applied.
Application of transitional deduction
The transitional deduction has not been applied.
Description of recoverable from reinsurance contracts and special purpose vehicles; and any material changes in the relevant assumptions made in the calculation of technical provisions compared to the previous reporting period
MPFL has no outward reinsurance arrangements and no recoverable from Special Purpose Vehicles.
Post balance sheet events
VIF and risk margin have not been impacted by any subsequent events arising in the period to end of March 2026.
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D.3 Other liabilities
Valuation, methodology and assumptions
In line with Chapter 3.4A of the Reporting part of the PRA Rulebook and Guideline 10 (Content by material classes of liabilities other than technical provisions), relevant disclosures in relation to other liabilities as per MPFL’s Solvency II Balance Sheet are as follows:
Insurance and intermediaries payables
Liabilities falling into this class are initially measured at fair value net of transaction costs. These are subsequently measured at amortised cost using the effective interest rate method where applicable. Therefore, the financial statements are prepared as per above valuation method and, as required in PRA Rulebook Valuation Part Chapter 5, other (non-policyholder) liabilities are valued in accordance with UK-adopted international accounting standards (Financial Reporting Standard 101 “Reduced Disclosure Framework”) and the valuation method adapted is consistent with the approach set out in the in PRA Rulebook Valuation Part Chapter 2, Article 75 of Solvency II Directive.
Payables (trade, not insurance)
Similar to Insurance and intermediaries payables, this is initially measured at fair value net of transaction costs. These are subsequently measured at amortised cost using the effective interest rate method where applicable. Again, the result of this measure is assessed to be materially equivalent to the value required under Solvency II.
Other disclosures
There are no additional liabilities to be disclosed on the MPFL’s Solvency II Balance Sheet.
Reconciliation to financial statements
The bases, methods and assumptions used for valuation of these liabilities for the Financial Statements are assessed to produce results that are materially equivalent to the values required under Solvency II.
D.4 Alternative methods for valuation
Assets categorised as Level 3 in “D.1 Assets” above were fair valued using inputs that are not observable, reflecting assumptions that the market participants may use in pricing such assets.
D.5 Any other information
There is no other material information regarding the valuation of MPFL’s assets and liabilities to add.
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Section E: Capital Management
E.1 Own funds
MPFL objectives with regard to managing own funds
It is the policy of MPFL to maintain capital in excess of the level required by its SCR, and to ensure capital adequacy according to its ORSA. Adequate capital should be held against all key material risks, and should remain adequate not just at a point in time, but over the business planning period to account for changes in MPFL’s strategic direction, evolving economic conditions, and financial and market volatility, and their effect on the Company’s risk profile and capital needs.
The Company’s planning period is three years and based on the current Plan, there is no anticipated material change to the Company’s business model, its product offering or market. Therefore, the risk profile of the Company is not expected to change materially over the planning period.
As at 31 December 2025, 78% (2024: 81%) of assets held to cover basic own funds were investments in SSGA Liquidity fund. Over the planning period of the Company, it is anticipated that a significant portion of the assets held to cover basic own funds will be held in this highly rated liquidity fund.
MPFL plans to maintain a solvency ratio equal to or above 210% and the strategy to achieve this is by maintaining reserves from profits.
Structure, amount and quality of own funds
MPFL currently holds unrestricted Tier 1 Own Funds only as per the below table. Any proposal to change the capital management policy to permit other types of capital instrument would be subject to approval by the Board.
2025 £'000
2024 £'000
Ordinary share capital (gross of own shares) 5,000 5,000
Capital contributions 3,600 3,600
Reconciliation reserve after deductions 7,920 6,635
Total basic own funds after deductions 16,520 15,235
The eligible amount of Own Funds to meet the SCR and MCR is £16.52m (2024: £15.24m).
Explanation of any material differences
The table below presents a reconciliation between equity in the financial statements and basic own funds under Solvency II.
2025 £'000
2024 £'000
Financial Statement Capital and Reserve 16,577 15,309
VIF 96 113
Risk Margin (153) (187)
Valuation of other liabilities - Solvency 2 Excess of assets over liabilities 16,520 15,235
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Items subject to transitional arrangements
There are no items subject to transitional arrangements.
Ancillary own funds items
There are no ancillary own funds items.
Items deducted from own funds
There are no items deducted from own funds.
Reconciliation Reserve
Reconciliation Reserve at the end of the reporting period was £11.52m. This is made up of the following:
• Profit and loss account per statutory accounts for year-end 2025 at £7.98m;
• Capital contribution £3.6m;
• VIF £0.1m; and
• Risk margin (£0.15)m.
E.2 Solvency Capital Requirement and Minimum Capital Requirement
Amounts of SCR and MCR
MPFL’s SCR and MCR are £3.95m and £3.50m respectively as at 31 December 2025
SCR split by risk modules
The following Standard Formula risk modules apply to MPFL based on its current operations and investments:
• Operational risk
• Market risk (including Interest Rate, Equity, Spread, Concentration risk and Currency risk)
• Counterparty default
• Life expense risk
MPFL is not exposed to risks covered by other risk modules or sub-modules of the Standard Formula.
The breakdown of the SCR is shown in the following table:
2025 £'000
2024 £'000
SCR (Operational Risk) 3,641 4,686
SCR (Market Risk) 586 504
SCR (Counterparty Default Risk) 322 206
SCR (Life Underwriting Risk) 15 14
Undiversified SCR 4,564 5,410
Diversification Benefit (183) (130)
Loss absorbing capacity of deferred taxes (428) (347)
SCR 3,953 4,933
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Use of simplified calculations
The SCR has been calculated in accordance with the methodology specified under the Standard Formula, which involves applying a series of prescribed stress tests. MPFL does not use any material simplifications in calculating the SCR.
Use of undertaking-specific parameters
MPFL does not use undertaking-specific parameters.
Inputs used to calculate MCR
The MCR represents the ultimate point of supervisory intervention below which a firm would lose its authorisation. The MCR is the greater of a minimum monetary amount and formulaic calculation. In practice, the former would apply for MPFL and is based on the Sterling value set out in the Regulation. In accordance with the PRA Rulebook: Solvency II Reform Instrument 2025 the MCR absolute floor applied to MPF was £3.5 million in 2025 (2024: £3.5m).
Explanation of any material changes to the SCR and MCR
There were no material changes to the SCR or the MCR over the reporting period.
Subsequent events
No post balance sheet events have impacted on the SCR or the MCR.
E.3 Differences between the standard formula and any internal model used
MPFL does not use an internal model.
E.4 Non-compliance with the Minimum Capital Requirement and non-compliance with the Solvency
Capital Requirement
MPFL has complied with the MCR and SCR throughout the period covered by this Report.
The Working Group continues to monitor capital on a monthly basis to be able to demonstrate continuous compliance with the regulatory capital requirements and technical provisions as per Chapter 3.8 of the Conditions Governing Business part of the PRA Rulebook.
E.5 Any other information
There is no other material information regarding the capital management of MPFL.
Page 29
Solvency and Financial Condition Report
Managed Pension Funds Limited 29/41
Annexure
Directors’ confirmation
The Directors are responsible for preparing the SFCR in accordance with the Prudential Regulatory Authority (PRA) rules and Solvency II Regulations.
The PRA Rulebook for Solvency II firms in Rule 6.1(2) and Rule 6.2(1) of the Reporting Part requires that the Company must have in place a written policy ensuring the ongoing appropriateness of any information disclosed and that the Company must ensure that its SFCR is subject to approval by the Directors.
Each of the Directors, whose names and functions are listed in Directors’ Report of the UK GAAP financial statements, confirms that, to the best of their knowledge:
Throughout the financial year in question, the Company has complied in all material respects with the requirements of the PRA rules and Solvency II Regulations as applicable; and
It is reasonable to believe that, at the date of the publication of the SFCR, the Company continues to comply, and will continue to comply in future.
On behalf of the Board
Director
27 March 2026
Page 30
Solvency and Financial Condition Report
Managed Pension Funds Limited 30/41
Appendix 1 – Reporting templates
Contents
The table below outlines the Quantitative Reporting Templates (“QRTs”) that are to be reported under the SFCR and those that are in scope for MPFL:
QRT QRT Name Reported / Not reported IR .02.01 .02 Balance sheet Reported IR.05.02.01 Premiums, claims and expenses by country: Life insurance and reinsurance obligations
Reported
IR.05.03.02 Life income and expenditure Reported IR.05.04.02 Non - l ife income and expenditure Not reported IR .12.01.02 Life technical provisions Reported IR.17.01.02 Non-life technical provisions Not reported IR .19.01. 2 1 Non - l ife claim development Not reported IR.22.01.21 Impact of long term guarantees measures and transitionals Not reported IR .23.01.01 Own F unds Reported IR .25.0 4 . 2 1 Solvency Capital Requirement Reported IR.25.05.01 Solvency Capital Requirement - Partial or full internal model components Not reported IR.28.01.01 Minimum Capital Requirement – Only life or only non-life activity Reported IR .28.02.01 Minimum Capital Requirement – Both life and non - life insurance activity Not reported
All the templates are reported in thousands in GBP.
Page 31
Solvency and Financial Condition Report
Managed Pension Funds Limited 31/41
IR.02.01.02 Balance sheet Solvency II value Assets C0010 R0030 Intangible assets R0040 Deferred tax assets R0050 Pension benefit surplus R0060 Property, plant & equipment held for own use R0070 Investments (other than assets held for index-linked and unit-linked contracts) 13,513 R0080 Property (other than for own use) R0090 Holdings in related undertakings, including participations R0100 Equities 0 R0110 Equities - listed R0120 Equities - unlisted R0130 Bonds 0 R0140 Government Bonds R0150 Corporate Bonds R0160 Structured notes R0170 Collateralised securities R0180 Collective Investments Undertakings 13,513 R0190 Derivatives R0200 Deposits other than cash equivalents R0210 Other investments R0220 Assets held for index-linked and unit-linked contracts 21,576,227 R0230 Loans and mortgages 0 R0240 Loans on policies R0250 Loans and mortgages to individuals R0260 Other loans and mortgages R0270 Reinsurance recoverables from: 0 R0280 Non-life and health similar to non-life R0315 Life and health similar to life, excluding index-linked and unit-linked 0 R0340 Life index-linked and unit-linked 0 R0350 Deposits to cedants R0360 Insurance and intermediaries receivables 2,265 R0370 Reinsurance receivables R0380 Receivables (trade, not insurance) R0390 Own shares (held directly)
R0400 Amounts due in respect of own fund items or initial fund called up but not yet paid in 0
R0410 Cash and cash equivalents 15,896 R0420 Any other assets, not elsewhere shown R0500 Total assets 21,607,901
Page 32
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Managed Pension Funds Limited 32/41
IR.02.01.02 Balance sheet Solvency II value Liabilities C0010 R0505 Technical provisions - total 21,576,284 R0510 Technical provisions - non-life 0 R0515 Technical provisions - life 21,576,284 R0542 Best estimate - total 21,576,131 R0544 Best estimate - non-life R0546 Best estimate - life 21,576,131 R0552 Risk margin - total 153 R0554 Risk margin - non-life R0556 Risk margin - life 153 R0565 Transitional (TMTP) - life 0 R0740 Contingent liabilities 0 R0750 Provisions other than technical provisions R0760 Pension benefit obligations R0770 Deposits from reinsurers R0780 Deferred tax liabilities R0790 Derivatives R0800 Debts owed to credit institutions R0810 Financial liabilities other than debts owed to credit institutions R0820 Insurance & intermediaries payables 14,872 R0830 Reinsurance payables R0840 Payables (trade, not insurance) 225 R0850 Subordinated liabilities 0 R0860 Subordinated liabilities not in Basic Own Funds R0870 Subordinated liabilities in Basic Own Funds 0 R0880 Any other liabilities, not elsewhere shown R0900 Total liabilities 21,591,381 R1000 Excess of assets over liabilities 16,520
Page 33
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Managed Pension Funds Limited 33/41
IR.05.02.01 Premiums, claims and expenses by country: Life obligations
C0150 C0160 C0170 C0180 C0190 C0200 C0210
Home Country
Top 5 countries (by amount of gross premiums written)
Total Top 5 and home country R1400 C0220 C0230 C0240 C0250 C0260 C0270 C0280 Premiums written R1410 Gross 5,579,232 5,579,232 R1420 Reinsurers' share 0 R1500 Net 5,579,232 5,579,232 Premiums earned R1510 Gross 5,579,232 5,579,232 R1520 Reinsurers' share 0 R1600 Net 5,579,232 5,579,232 Claims incurred R1610 Gross 20,515,045 20,515,045 R1620 Reinsurers' share 0 R1700 Net 20,515,045 20,515,045
R1900 Net expenses incurred 16,6 66 16,6 66
Page 34
Solvency and Financial Condition Report
Managed Pension Funds Limited 34/41 General
IR.05.03.02 Life income and expenditure
Insurance with profit participation
Index-linked and unit linked insurance
Life annuities
Non-life annuities
Other life insurance
Health insurance
Total life and health
C0010 C0020 C0030 C0040 C0050 C0060 C0070 Premiums written R0010 Gross direct business 5,211,910 5,211,910 R0020 Gross reinsurance accepted 367,322 367,322 R0030 Gross 0 5,579,232 0 0 0 0 5,579,232 R0040 Reinsurers' share 0 R0050 Net 0 5,579,232 0 0 0 0 5,579,232 Claims incurred R0110 Gross direct business 15,539,192 15,539,192 R0120 Gross reinsurance accepted 4,975,853 4,975,853 R0130 Gross 0 20,515,045 0 0 0 0 20,515,045 R0140 Reinsurers' share 0 R0150 Net 0 20,515,045 0 0 0 0 20,515,045 Expenses incurred R0160 Gross direct business 14,214 14,214 R0170 Gross reinsurance accepted 2,459 2,459 R0180 Gross 0 16,673 0 0 0 0 16,673 R0190 Reinsurers' share 0 R0200 Net 0 16,673 0 0 0 0 16,673
R0300 Other expenses
Transfers and dividends R0440 Dividends paid
Page 35
Solvency and Financial Condition Report
Managed Pension Funds Limited 35/41 General
IR.12.01.02 Life technical provisions
Insurance with profit participatio n
Index linked and unit linked insurance
Life annuities
Non-life annuities
Other life insurance
Health insurance
Total life and health
C0010 C0020 C0030 C0040 C0050 C0060 C0070 Best estimate R0025 Gross Best Estimate (direct business) 18,393,780 18,393,780 R0026 Gross Best Estimate (reinsurance accepted) 3,182,351 3,182,351 R0030 Gross Best Estimate 0 21,576,131 0 0 0 0 21,576,131
R0080 Total Recoverables from reinsurance/SPV and Finite Re after the adjustment for expected losses due to counterparty default 0
R0090 Best estimate minus recoverables from reinsurance/SPV and Finite Re 0 21,576,131 0 0 0 0 21,576,131
R0100 Risk margin 153 153
Amount of the transitional on Technical Provisions R0140 TMTP - risk margin 0 R0150 TMTP - best estimate dynamic component 0 R0160 TMTP - best estimate non - dynamic component 0 R0170 TMTP - amortisation adjustment 0 R0180 Transitional Measure on Technical Provisions 0 0 0 0 0 0 0
R0200 Technical provisions - total 0 21,576,284 0 0 0 0 21,576,284
Page 36
Solvency and Financial Condition Report
Managed Pension Funds Limited 36/41 General
IR.23.01.01 Own Funds
Total Tier 1 unrestricted
Tier 1 restricted Tier 2 Tier 3
C0010 C0020 C0030 C0040 C0050 R0010 Ordinary share capital (gross of own shares) 5,000 5,000 0 R0030 Share premium account related to ordinary share capital 0 0 0
R0040 Initial funds, members' contributions or the equivalent basic own - fund item for mutual and mutual - type undertakings 0 0 0
R0050 Subordinated mutual member accounts 0 0 0 0 R0070 Surplus funds 0 0 R0090 Preference shares 0 0 0 0 R0110 Share premium account related to preference shares 0 0 0 0 R0130 Reconciliation reserve 11,52 0 11,52 0 R0140 Subordinated liabilities 0 0 0 0 R0160 An amount equal to the value of net deferred tax assets 0 0 R0180 Other own fund items approved by the supervisory authority as basic own funds not specified above 0 0 0 0 0
R0220 Own funds from the financial statements that should not be represented by the reconciliation reserve and do not meet the criteria to be classified as Solvency II own funds 0
R0290 Total basic own funds 16,52 0 16,52 0 0 0 0
Ancillary own funds R0300 Unpaid and uncalled ordinary share capital callable on demand 0
R0310 Unpaid and uncalled initial funds, members' contributions or the equivalent basic own fund item for mutual and mutual - type undertakings, callable on demand 0
R0320 Unpaid and uncalled preference shares callable on demand 0 R0330 A legally binding commitment to subscribe and pay for subordinated liabilities on demand 0 R0340 Letters of credit and guarantees 0 R0350 Letters of credit and guarantees other 0 R0360 Supplementary members calls 0 R0370 Supplementary members calls - other 0 R0390 Other ancillary own funds 0 R0400 Total ancillary own funds 0 0 0
Page 37
Solvency and Financial Condition Report
Managed Pension Funds Limited 37/41 General
Available and eligible own funds R0500 Total available own funds to meet the SCR 16,52 0 16,52 0 0 0 0 R0510 Total available own funds to meet the MCR 16,52 0 16,52 0 0 0 R0540 Total eligible own funds to meet the SCR 16,52 0 16,52 0 0 0 0 R0550 Total eligible own funds to meet the MCR 16,52 0 16,52 0 0 0
R0580 SCR 3,9 53 R0600 MCR 3,500 R0620 Ratio of Eligible own funds to SCR 41 7 . 9 4% R0640 Ratio of Eligible own funds to MCR 472.0 0 %
Reconcilliation reserve C0060 R0700 Excess of assets over liabilities 16,52 0 R0710 Own shares (held directly and indirectly) 0 R0720 Foreseeable dividends, distributions and charges R0725 Deductions for participations in financial and credit institutions R0730 Other basic own fund items 5,000
R0740 Adjustment for restricted own fund items in respect of matching adjustment portfolios and ring fenced funds 0
R0760 Reconciliation reserve 11,52 0
Page 38
Solvency and Financial Condition Report
Managed Pension Funds Limited 38/41 General
IR.25.04.21 Solvency Capital Requirement
Net of loss absorbing capacity of technical provisions
Market risk C0010 R0070 Interest rate risk 50 R0080 Equity risk 394 R0090 Property risk 0 R0100 Spread risk 138 R0110 Concentration risk 59 R0120 Currency risk 174 R0125 Other market risk R0130 Diversification within market risk - 229 R0140 Total Market risk 586
Counterparty default risk R0150 Type 1 exposures 322 R0160 Type 2 exposures 0 R0165 Other counterparty risk R0170 Diversification within counterparty default risk 0 R0180 Total Counterparty default risk 322
Life underwriting risk R0190 Mortality risk 0 R0200 Longevity risk 0 R0210 Disability - Morbidity risk 0 R0220 Life - expense risk 1 5 R0230 Revision risk 0 R0240 Lapse risk 0 R0250 Life catastrophe risk 0 R0255 Other life underwriting risk R0260 Diversification within life underwriting risk 0 R0270 Total Life underwriting risk 1 5
Health underwriting risk R0280 Health SLT risk R0290 Health non SLT risk R0300 Health catastrophe risk
Page 39
Solvency and Financial Condition Report
Managed Pension Funds Limited 39/41 General
R0305 Other health underwriting risk R0310 Diversification within health underwriting risk R0320 Total Health underwriting risk 0
Non - life underwriting risk R0330 Non - life premium and reserve risk (ex catastrophe risk) R0340 Non - life catastrophe risk R0350 Lapse risk R0355 Other non - life underwriting risk R0360 Diversification within non - life underwriting risk R0370 Non - life underwriting risk 0
R0400 Intangible asset risk
Operational and other risks R0422 Operational risk 3,6 41 R0424 Other risks R0430 Total Operational and other risks 3,6 41
R0432 Total before all diversification 4,7 93 R0434 Total before diversification between risk modules 4,5 64 R0436 Diversification between risk modules - 183 R0438 Total after diversification 4,3 81
R0440 Loss absorbing capacity of technical provisions R0450 Loss absorbing capacity of deferred tax - 42 8 R0455 Other adjustments
R0460 Solvency capital requirement including undisclosed capital add on
3,953
R0472 Disclosed capital add - on - excluding residual model limitation R0474 Disclosed capital add - on - residual model limitation R0480 Solvency capital requirement including capital add - on 3,9 53
R0490 Biting interest rate scenario Increase R0495 Biting life lapse scenario
Page 40
Solvency and Financial Condition Report
Managed Pension Funds Limited 40/41 General
IR.28.01.01 Minimum Capital Requirement - Only life or only non - life insurance or reinsurance activity
Linear formula component for non - life insurance and reinsurance obligations C0010 R0010 MCR NL Result 0 Net (of reinsurance/SPV) best estimate and TP calculated as a whole
Net (of reinsurance) written premiums in the last 12 months C0020 C0030 R0020 Medical expense insurance and proportional reinsurance R0030 Income protection insurance and proportional reinsurance R0040 Workers' compensation insurance and proportional reinsurance R0050 Motor vehicle liability insurance and proportional reinsurance R0060 Other motor insurance and proportional reinsurance R0070 Marine, aviation and transport insurance and proportional reinsurance R0080 Fire and other damage to property insurance and proportional reinsurance R0090 General liability insurance and proportional reinsurance R0100 Credit and suretyship insurance and proportional reinsurance R0110 Legal expenses insurance and proportional reinsurance R0120 Assistance and proportional reinsurance R0130 Miscellaneous financial loss insurance and proportional reinsurance R0140 Non - proportional health reinsurance R0150 Non - proportional casualty reinsurance R0160 Non - proportional marine, aviation and transport reinsurance R0170 Non - proportional property reinsurance
Linear formula component for life insurance and reinsurance obligations C0040 R0200 MCR L Result 15,103 Net (of reinsurance/SPV) best estimate and TP calculated as a whole
Net (of reinsurance/SPV) total capital at risk
C0050 C0060 R0210 Obligations with profit participation - guaranteed benefits R0220 Obligations with profit participation - future discretionary benefits
Page 41
Solvency and Financial Condition Report
Managed Pension Funds Limited 41/41 General
R0230 Index - linked and unit - linked insurance obligations 21,576,131 R0240 Other life (re)insurance and health (re)insurance obligations R0250 Total capital at risk for all life (re)insurance obligations 21,576,131
Overall MCR calculation C0070 R0300 Linear MCR 15,103 R0310 SCR 3,9 53 R0320 MCR cap 1,77 9 R0330 MCR floor 98 8 R0340 Combined MCR 1,77 9 R0350 Absolute floor of the MCR 3,500
R0400 Minimum Capital Requirement 3,500
© 2026 State Street Corporation – All Rights Reserved
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"text": "Section E: Capital Management ................................................................................................... 26"
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"text": "principal activity is to provide pooled investment management services to pension schemes and reinsurance platforms"
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"text": "under unit-linked life insurance contracts. The Company\u2019s client base is predominantly in the UK."
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"text": "and liquidity risk onto the policyholder. The Company outsources operational activities to State Street Global Advisors"
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"text": "Limited (\u201cSSGAL\u201d or \u201cSSGA UK\u201d) through an outsourced services agreement under which SSGAL is liable for losses"
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"text": "resulting from this activity. SSGAL provides investment management, sales, marketing, administration and support"
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"text": "services to the Company. The costs to the Company for the provision of these services are met out of the Company\u2019s"
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"text": "fees charged to policyholders, plus any investment management fees deducted from specific funds less a retention"
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"text": "amount due to MPFL. This retention is to enable the Company to meet its direct administrative expenses and to maintain"
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"text": "a sufficient capital buffer so as to meet its regulatory obligations. The time horizon used by the Company for its business"
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"text": "and Certification Regime, and appropriate to its business."
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"text": "The rules applicable to MPF, including those relating to MPF\u2019s regulatory valuation and disclosures as at 31 December"
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"text": "2025, are materially unchanged from those which applied at 31 December 2024."
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"text": "MPFL\u2019s board (\u201cthe Board\u201d) comprises a Non-Executive Chairman, three additional Non-Executive Directors, and two"
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"text": "further Executive Directors. It meets at least quarterly and has overall responsibility for the governance of the Company."
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"text": "The Board delegates certain responsibilities to the Audit Committee. The Board also delegates certain day-to-day"
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"text": "management responsibilities of the Company to the MPFL Working Group (\u201cWorking Group\u201d), which comprises"
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"text": "representatives from areas including Product, Operations, Risk, Finance, Legal, Compliance, Sales and Marketing, and"
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"text": "The below key functions are also established to support the Board in carrying out its responsibilities."
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"text": "Risk Management Function;"
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"text": "Compliance Function;"
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"text": "Internal Audit Function;"
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"text": "Actuarial Function; and"
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"text": "Investment Management Function."
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"id": "bebefac2-38d8-49c4-aa45-81ca96a9b2fe",
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"text": "In compliance with Solvency II and the PRA\u2019s Senior Managers and Certification Regime in December 2025, MPFL has"
},
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"id": "eb1d92e5-88e6-42bf-a5b4-259c3afadd4d",
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"text": "policies and procedures in place to ensure that all persons in these capacities meet the requirements and this assertion"
},
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"text": "is reviewed on an ongoing basis."
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"text": "Key risks"
},
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"id": "63f4c4aa-ae8d-4d75-9fcd-93c46a80c8b4",
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"text": "MPFL is run on a risk-averse basis and writes only unit-linked pension business that offers no guarantees on"
},
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"id": "f9626995-1641-4cfc-9d22-a1ca04eb0314",
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"text": "performance to policyholders. The risks of MPFL unit-linked assets are borne by the policyholders as explained in the"
},
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"id": "dc4cf8b9-0e07-433b-8b10-005d4559c0ff",
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"text": "policyholder disclosures. Investment risk is absorbed by the policyholders, since they fully fund the sub-funds and the"
},
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"text": "entire return or loss of the sub-funds accrue to the policyholders, less specified fees which compensate the investment"
},
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"id": "0a82c059-50da-43ad-b205-77c3b1130a40",
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"text": "manager, administrator, securities lending agent and custodian for their services."
},
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"text": "Solvency and Financial Condition Report"
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"text": "Managed Pension Funds Limited 5/41"
},
{
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},
"id": "4afca5b2-325c-4050-945f-e74f01d9b3f9",
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"text": "In running the business and managing its investments, MPFL is exposed to the following risks in the Solvency II Standard"
},
{
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"text": "Formula module:"
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{
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},
"id": "b8e623a3-bda2-4e96-8bd4-ad015e1cbc72",
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"text": "Operational Risk;"
},
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"text": "\u2022"
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"id": "df7f5f1c-523b-4073-9c4b-6bc0da20f09e",
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"text": "Market Risk (including Interest Rate, Equity, Spread, Currency, and Concentration risk);"
},
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"text": "Counterparty Default Risk; and"
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"text": "Life Underwriting Risk."
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"text": "Underwriting and investment performance"
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"text": "As explained above, MPFL writes only unit-linked pension business that offers no guarantees on performance to"
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"text": "policyholders and therefore no traditional underwriting is required. As a result, the unit-linked assets and liabilities are"
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"text": "The investment income from shareholder assets in the reporting period 2025 was \u00a3336,038 (2024: \u00a3383,995)."
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"text": "The tables below provide analysis of policyholder assets and the technical provisions it matches."
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"text": "Assets held for unit-linked contracts"
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"x": 106,
"y": 410
},
"id": "a889b0ce-6982-4720-80a6-bfcd7e30ecf3",
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"text": "At 1 January - Assets held for unit-linked contracts"
},
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"x": 656,
"y": 410
},
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"text": "33,534,681"
},
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"width": 75,
"x": 813,
"y": 410
},
"id": "309eece1-0114-41e8-a428-74aa5018f9c0",
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"text": "37,244,842"
},
{
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"x": 107,
"y": 432
},
"id": "c534f04c-2e74-4b22-b16f-0168c2872096",
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"text": "Premiums written"
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"x": 665,
"y": 432
},
"id": "81feff33-a747-420c-8c49-2f98415dff17",
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"text": "5,579,232"
},
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"x": 821,
"y": 432
},
"id": "7ec98b7d-d784-4880-b871-ae30f4fafdd2",
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"text": "9,482,269"
},
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"x": 106,
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},
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"text": "Claims incurred"
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"text": "(20,515,045)"
},
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"x": 808,
"y": 453
},
"id": "f0f370c9-504e-43a4-aec8-560eb04208aa",
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"text": "(18,622,125)"
},
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"x": 107,
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},
"id": "684d8783-f2ee-45d1-b10b-41b50e6604e4",
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"text": "Investment return (net of all charges)"
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"x": 664,
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},
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"text": "2,977,359"
},
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"x": 821,
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},
"id": "ed9c11bd-e8fe-49b9-9615-c07e24594ec3",
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"text": "5,429,695"
},
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"x": 106,
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},
"id": "6385897a-4396-4aed-8037-a4097eca26f6",
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"text": "At 31 December - Assets held for unit-linked contracts"
},
{
...