Noel Hackett - QFA Senior Pension Consultant

Tony Delaney – Area Manager , New Ireland

New Ireland Assurance Provider of choice in the Life and Pensions Market

YOUR PENSION & RETIREMENT PLANNING PRESENTATION.Presenters:

Thurs/ Friday 15th -16th May 2014

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About New Ireland Assurance

• New Ireland is a leading Life Assurance Company in Ireland

• Provides life assurance, pensions & investment solutions to over 500,000 customers

• Established almost 100 years ago, New Ireland was the first wholly Irish owned company to transact business in Ireland

• New Ireland remains Irish owned to this day as part of the Bank of Ireland Group

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• The Company has gone from strength to strength, from just £1,000 in assets in 1918 to over €13.4 billion today (Feb 2014)

• New Ireland employs over 1,100 people with the main Head Office on Dawson Street for over 85 years

• Have world class investment partners for our existing single manager portfolios including State Street Global Advisors Ireland, Bank of New York Mellon Asset Management and Kleinwort Benson Investors

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Agenda

1. Your Main NUI Galway Pension Schemes2. The Finance Act 2014 and changes that may affect

you3. Investment Market Update and Investment Outlook

for 20144. Fund Choice, Fund Manager, Fund Performance and

Fund availability under your AVC Scheme

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Benefits at Retirement

At retirement your benefits will come from:-

– State Pension ( PRSI Contributions)

– NUIG Scheme (s)

– Purchase of Notional Years

– Additional Voluntary Contributions ( AVCs )

– Personal Accumulated wealth/savings inheritances

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NUIG Pension Scheme

• Defined Benefit Scheme• Scheme provides

– Pension– Lump Sum ( Gratuity )– Spouses Pension– Increases during course of payment– Death in Service Benefit

• Actual benefits depend on when you joined• Please refer to your NUIG Annual Benefit Statement.• ( Individual Consultations with Noel Hackett)

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Key Dates

• Pre 95 – no state pension, higher pension through NUIG• Post 95 - employees pay PRSI and receive:

– State Pension– Lower pension from NUIG

• 2004 • Future employees have minimum RA of 65• Immediate early retirement pension available to:

– Existing employees from 50– New employees from 55 – 2013- Career Average Earnings

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State Pension

• From 2014– Single Person: €230.30 per week– Married Couple: €383.80

• Applies to all employees who joined since 1995• State Pension 2014 from age 66

2021 from age 672028 from age 68

(Social Welfare will pay Job Assist or other S/W payment- where for whatever reason S/W payment not allowed, a Supplementary Pension maybe paid by NUIG )

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Early Retirement

Was always allowed but only as a deferred pension

Changes from 2004– Existing employees from 50– New entrants from 55– Immediate pension payable– Early payment reduction

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Bridging the Gap - 2 Options

Purchase of Notional Years of ServiceThrough NUI Galway Pensions Office

AVC SchemeThrough New Ireland Assurance

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Notional Years

• Employee can buy “notional years”

• Defined Benefit basis

• Must buy year with all the “trimmings”– Pension– Gratuity– Spouses Pension– Pension Increases

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AVC Scheme

• Tax Relief • Tax free growth• Fund Choice• Flexibility• Options at retirement• Inheritance Tax Planning

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Employee Tax Relief Limits (including AVCs)

Age % of Remuneration

Up to 30 15%30 - 39 20%40 - 49 25%50 - 54 30%55 - 59 35%60 + 40%

- An earnings cap of €115,000 (2014 apply to Employee Pension Contributions for the purpose of tax relief

- The above limits include contributions to NUIG Pension Scheme

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Making it easy to track your Fund

Pensions Schemes Online• Password protected website• Information on

– premium history– fund value– Estimated fund at retirement

• It is free and easy to use• Review yearly – especially if circumstances change

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2014 Finance Act- Main changes

• Pension Levy • Standard Fund Personal Threshold • Defined Benefit Changes• DIRT Tax 41% plus 4% PRSI • Inheritance Tax Threshold• Gift Tax • Age Exemption Limit @ Retirement

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Market and Investment Update

• Fund Performance• Equities • Bonds• Capital Guarantees• Property Funds• Risk Managed Funds• ESMA Risk Ratings 1-7

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“Would you tell me, please, which way I ought to go from here?”

“That depends a good deal on where you want to get to”, said the cat

- Lewis Carroll, Alice in Wonderland

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Risk Profile:How much risk can/will you take to

achieve it?

Timeframe: How long do you have to achieve it?

Objectives: What do you want to achieve?

Every aspect of investment advice should revolve around always being aware of your views on each of the three key points above!

Every aspect of investment advice should revolve around always being aware of your views on each of the three key points above!

Lets begin by reminding ourselves of the cornerstone questions of any investment decision…..

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The events of 2008 still fresh in our memories!

Sept. 8th Fannie Mae & Freddie Mac under government control. Sept. 14th Lehman's files for bankruptcy Sept 15th Bank of America purchases Merrill Lynch Sept 16th Fed takes 80% stake in AIG for $85bn Sept 18th Lloyds TSB takes over of HBOS Central Banks globally pump $180bn of liquidity into the market Market ban on short selling Sept 19th Paulson announces ‘Troubled Asset Relief Program’ – markets soar Sept 21st Goldman's Sachs & Morgan Stanley become Bank holding companies Sept 26th Overnight collapse of Washington Mutual in the biggest US bank failure ever. Sept 29th Announcement that Bradford & Bingley and Fortis are being nationalised. Citigroup agrees to buy Wachovia's banking business. Sept 30th News that Irish government will guarantee all deposits and debt of main credit institutions for 2 years US Lawmakers vote against proposed treasury rescue package

And then came October!!

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1st week in October 08: As bad a week in markets as we’d seen

in decades!

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This left many Investors very nervous about their future finances, long after the market began to recover!

                                               

“Both optimists and pessimists contribute to society, the optimist invents the airplane, the pessimist the parachute”….George Bernard Shaw

Is it safe to Come back out?Is it safe to Come back out?

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Year Year Year Year Year

1926 11.62 1945 36.44 1964 16.48 1983 22.51 2003 28.681927 37.49 1946 -8.07 1965 12.45 1984 6.27 2004 10.881928 43.61 1947 5.71 1966 -10.06 1985 32.16 2005 4.911929 -8.42 1948 5.50 1967 23.98 1986 18.47 2006 15.80 1930 -24.90 1949 18.79 1968 11.06 1987 5.23 2007 5.491931 -43.34 1950 31.71 1969 -8.50 1988 16.81 2008 -36.991932 -8.19 1951 24.02 1970 4.01 1989 31.49 2009 26.46 1933 53.99 1952 18.37 1971 14.31 1990 -3.17 2010 15.061934 -1.44 1953 -0.99 1972 18.98 1991 30.55 2011 2.111935 47.67 1954 52.62 1973 -14.66 1992 7.67 2012 16.00 1936 33.92 1955 31.56 1974 -26.47 1993 9.99 2013 31.901937 -35.03 1956 6.56 1975 37.20 1994 1.311938 31.12 1957 -10.78 1976 23.84 1995 37.431939 -0.41 1958 43.36 1977 -7.18 1996 23.071940 -9.78 1959 11.96 1978 6.56 1997 33.361941 -11.59 1960 0.47 1979 18.44 1998 28.581942 20.34 1961 26.89 1980 32.42 1999 21.041943 25.90 1962 -8.73 1981 -4.91 2000 -9.101944 19.75 1963 22.80 1982 21.41 2001 -11.88

2002 -22.09

S&P 500 Index - Total Returns

1926 to 2013 annualised returns of the Standard and Poors equity index.

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Cash funds offer little in terms of return…..

2011> 5%2011> 5%

2012> 4%2012> 4%

2013.5%

2013.5%

2014.25%2014.25%

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Inflation may well be an issue in the near future. Challenge!Challenge!

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But we still only have a finite number of assets in which to invest!

Equities

Property

Equities

Property

Bonds

Deposits

Alternatives

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Avoiding significant losses should be the starting point for every successful investor!

Loss Required Gain

20% 25%

40% 66%

60% 150%

Minimising losses and reducing investment risk has become more and more important to investors after the great financial crisis of 2008.

Minimising losses and reducing investment risk has become more and more important to investors after the great financial crisis of 2008.

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Source: NewtonSource: Newton

A +20% +20% -10% +29.6%A +20% +20% -10% +29.6%

B +35% -10% +5% +27.6%B +35% -10% +5% +27.6%

C +10% +10% +10% +33.1%C +10% +10% +10% +33.1%

The key learning from recent past…the power of stable returns.The key learning from recent past…the power of stable returns.

“I have two basic rules to investment, Rule no1: Never lose money. Rule no 2: Never forget rule no 1”!! …… Warren Buffett “I have two basic rules to investment, Rule no1: Never lose money. Rule no 2: Never forget rule no 1”!! …… Warren Buffett

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A complex market…which can be difficult to navigate

Tactical AssetAllocation

Property?

PortfolioConstruction

Derivatives forProtection

CustomerQuestionnaires

Rebalancing?

¯̄Manager

Diversification

¯̄ProtectedFunds

ESMA?

Total ReturnStrategies

Market NeutralStrategies

Regulation &Compliance

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Performance Figures & Fund Choice

• FUND past 12months 3yrs pa 5yrs pa• Cash Fund(1) 0.2% 0.5% 0.7%• Gilt Fund (4) 2.5% 7.0% 5.2%• BNY Mellon(4) 4.4% 4.6% n/a• Elements (3) 4.5% 4.4% n/a• Protected Assets (4) 6.6% 3.4% n/a• Managed (5) 11.7% 10.5% 14.0%• Consensus(5) 9.9% 10.0% 14.0%• Ethical (5) 11.0% 10.2% 14.1%• Evergreen (5) 10.5% 8.6% 11.2%• Equity Fund(6) 14.1% 11.8% 17.6%• Innovator (6) -0.3% 2.0% 11.0%

• Funds are updated each day.• ESMA Risk rating 1 to 7 scale.

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SSgA — A True Global Player

• €1.7 Trillion in Asset Under Management1

• Over 400 investment professionals

• 27 Global Offices; 9 Investment Centres

• 24 Hour Trading

Rankings:

# 1 Global Endowment/Foundation Assets2

# 1 Sovereign Wealth Fund Assets2

# 2 Worldwide Institutional Assets2

Key Stats:

• We Manage Money for 9 of the Top 10 S&P 500 Companies3

• We Manage Money for 6 of the Top 20 Wealthiest Countries in the World 3

1 AUM is $2.15 Trillion. This AUM includes the assets of the SPDR Gold Trust (approx. $37.1 as of 30 September 2013). for which State Street Global Markets, LLC, an affiliate of State Street Global Advisors, serves as the marketing agent. Please note that AUM totals are unaudited. 2 Pensions & Investments, 31 December 2012. 3 Source: SSgA, as of 31 December 2013. S&P 500 top 10 by market capitalization as of 31 December 2013. Source: SSgA. Top 20 Wealthiest countries by GDP per Capita as of World Economic Outlook Database — October 2013.

IREPRS-0681

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€1

,60

0

€3

40

€2

50

€2

05

0

200

400

600

800

1000

1200

1400

1600

1800

SSgA Great West & Irish Life Aviva Zurich Standard Life

€3

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SSgA: Size isn’t Everything…. But it Helps!

Source: P&I/Towers Watson Global 500 year end 2012.

Snap shot of how SSgA measure up against some local competitors

IREPRS-0516

Global AUM (€ Billion)

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A Different Approach…

Absolute ReturnEquities Bonds / Cash

Passive approach…

Active IRIS approach…

IREPRS-0740

Source: SSgA.This chart is for illustrative purposes only.

Lifestyling – Moving to safer assets as you get older

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Target Return to Help Absorb Shocks

Equities

Early Years Growth phase Retirement Goal

Equities + Absolute Return Fund

Source: SSgA.This chart is for illustrative purposes only.

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Active IRIS Glide Path

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Target Return Strategy

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Target Return Strategy Helps Manage Risk

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Target Return Strategy Helps Manage Risk

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Passive IRIS Glide - Path Default Fund

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Passive Management

Source: SSgA, All World Developed Equity Index, MSCI World Net Dividends Re-invested.Past performance is not a guarantee of future results. The performance includes the reinvestment of dividends and other corporate earnings and is calculated in euro. The performance figures contained herein are provided on a gross of fees basis only, but net of administrative costs. The performance figures do not reflect the deduction of investment management or other fees which could reduce the return. Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and loss and the reinvestment of dividends and other income.

SSgA’s Trading Advantage Helps Deliver World Class Index Tracking

• 24hr Trading — London, Boston & Hong Kong

• 282 million¹ shares traded every day

• 21.8%2 of shares matched between clients

• 0.02%3 trading commission paid on market trades

= Low Cost and Efficient Trading1 SSgA Global Trading Desk for year ending 2012.2 Boston Global Passive Equity Desk average, Q2 2013. 3 Average Commissions paid on traded, Boston Global Passive Equity Desk, Q1 2013.

IREPRS-0740

Why SSgA for Passive?

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Passive IRIS – Global Equity (MSCI)

Source: Country Allocations and top 10 Holdings: ssga.com as at 31.03.2014

Country Allocation

Top 10 Stocks % of Fund

APPLE INC 1.5%

EXXON MOBIL CORP 1.3%

MICROSOFT CORP 1.0%

GOOGLE INC-CL A 1.0%

JOHNSON & JOHNSON 0.9%

GENERAL ELECTRIC CO 0.8%

WELLS FARGO & CO 0.8%

NESTLE SA-REG 0.8%

CHEVRON CORP 0.7%

JPMORGAN CHASE & CO 0.7%

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Passive IRIS – Government Bonds

Key Stats Government Bonds

Long Government

Bonds

Approx. Duration 6.9 12.4

Approx. Yield to maturity 1.2% 1.9%

Source: Country Allocations Are the neutral benchmark weights for both funds. The Key Stats are provided by SSgA as at 31.03.2014 and are based on the underlying SSgA funds.

Country Allocation

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Passive IRIS – Corporate Bonds

Key Stats Corporate Bond Fund

Benchmark

Barclays Euro-Aggregate Corporate Bond Index

Effective Duration 4.7

Yield to maturity 1.8%

Number of Issues 1,372

Source: Country Allocations and Key Stats are taken from SSgA.com as at 31.03.2014 and are based on the underlying SSgA fund “SSgA Euro Corporate Bond Index Fund”.

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Passive IRIS – Property

Key Stats (Excluding Cash Holding)

Fund Size €495M

# of direct holdings 47

% of fund in Direct Holdings 90%

Approx. Initial Yield**(on direct property assets held) 6.6%

Vacancy Rate (ERV of vacant assets expressed as % of total ERV of direct assets)

11.2%

Weighted Average Term to Break* 6 Years

Currency Hedging (level of currency hedging on Non-Euro investments)

50%–100%

Source: SSgA. All data is at 31 March 2014 unless otherwise stated subject to change, and should not be relied upon as current thereafter. The weights above are exclusive of cash holdings.*As at 30 June 2013.**This is calculated on the basis of contracted rent divided by capital value of direct property holdings and does not take into account any of the costs associated with the fund or property acquisition costs.

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Passive IRIS – Cash

- Primarily invested in AAA Rated SSgA Liquidity Fund

- Over 75 different Cash Instruments held with over 40 different large Financial Institutions

- Weighted Average Maturity of Cash Instruments is 38 Days

- Primary Focus is on Safety and Liquidity

Source: Stats taken from SSgA.com as at 31.03.2014 – SSgA EUR Liquidity Fund

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So lets finish by looking at the correct investment process.

1. Your Goalsobjectives

1. Your Goalsobjectives

2. Your Risk Profile

2. Your Risk Profile

3. Asset Allocation3. Asset Allocation4. InvestmentFund choice

4. InvestmentFund choice

5. Regular Review5. Regular Review

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What Should I Do Next? Contact:

Pensions Office NUI GalwayPh: (091) 495028 ext: 5028 Email: pensions@nuigalway.ie

or

Noel Hackett, QFA,Pensions ConsultantNew Ireland Assurance

Tel: (061) 312166Mobile: 086- 8186163 Email: Noel.hackett@newireland.ie

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Any Questions?Any Questions?Thank You for Thank You for attendingattending

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Individual Consultations Available

Noel Hackett will be available (9 – 5pm)

for Confidential Individual ConsultationsConcourse Room AC 201 (near Smokeys )

Monday 19th Tuesday 20th & Wed 21st May 2014

Contact: Ann Cormican or Caroline Mooney

Extn 5901/5028

ann.cormican@nuigalway.ieCaroline.mooney@nuigalway.ie