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

1. New Ireland Assurance Provider of choice in the Life and Pensions Market NUI GALWAY PENSION & RETIREMENT PLANNING PRESENTATION- AVCs 9.30 11.30 14.15 Presenters: Noel Hackett - QFA Senior Pension Consultant New Ireland Assurance Galway Dearbhla Cullen- State Street Global Advisors Senior Relationship Manager | SSgA | Wednesday, 24th June 2015

2. Pensions Office NUI Galway Ph: (091) 495028 ext: 5028 Email: pensions@nuigalway.ie OR Noel Hackett, QFA, Pensions Consultant New Ireland Assurance, Atlanta House, 36 Dominick Street, Galway Tel: (091) 563023 Mobile: 086- 8186163 Email: Noel.hackett@newireland.ie Who Should I Contact:

3. 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

4. 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

5. Agenda • Your Main NUI Galway Pension Schemes • Sample Pension Benefit Statement- Scope for Notional Years and AVCs 3 ESMA Risk Rating Scale 1-7 4.The Finance Act 2015 and changes that may affect you 5Investment Market Update and Investment Outlook for 2015- Dearbhla Cullen SSgA 6Fund Choice, Fund Manager, Fund Performance and Fund availability under your AVC Scheme

6. 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

7. 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)

8. 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

9. 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 67 2028 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 )

10. 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

11. Bridging the Gap - 2 Options Purchase of Notional Years of Service Through NUI Galway Pensions Office AVC Scheme Through New Ireland Assurance

12. Notional Years • Employee can buy “notional years” • Defined Benefit basis • Must buy year with all the “trimmings” • Pension • Gratuity • Spouses Pension • Pension Increases

13. AVC Scheme • Tax Relief • Tax free growth • Fund Choice • Flexibility • Options at retirement • Inheritance Tax Planning • Fund for tax free lump sum, taxable lump sum

14. 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 (2015 apply to Employee Pension Contributions for the purpose of tax relief • The above limits include contributions to NUIG Pension Scheme

15. Tax Relief- The Importance!!! • Monthly Contribution €100.00 Standard rate Marginal Rate • Tax Relief €20.00 €40.00 • Net Cost €80.00 €60.00 Saving in Bank/Credit Union Earn gross either €120 or €135.00 before PAYE/PRSI/USC/PRD €100.00 net invested in Bank/Credit Union Then its subject to DIRT Tax currently 41% and PRSI 4% OR Save €100.00 in Pension ( AVC or Purchase Yrs) that costs you €60.00 or €80.00 or Save €100.00 that costs you €120.00 or €135.00 • Contributions and tax relief operated at source

16. Importance of Taxation –PRE/POST Retirement Total gross contribution @20% @40% of €100.00 €100 €100 Less tax relief -€20.00 -€40.00 NET cost of contribution €80.00 €60.00 Post Retirement Assume €100.00 is still €100- no growth Tax Free lump sum €100.00 get you €100.00 Nil tax ( PRSI –age exemtion limit ) €100.00 get you €95.00 Standard rate of tax €100.00 get you €74.00 Marginal rate of tax €100.00 get you €54.00 Estimates only.

17. SAMPLE PENSION STATEMENT and Scope for AVC and Notional Years Purchase • 1.NAME Noelle Hackett • 2. Employee no 0123457e • 3. Gender female • 4. Civil Status single • 5.Date of birth 20.09.1957 • 6. Starting pension 24-Jul-01 • 7.Starting date (JPS) 01-Nov-02 • 8.Date of Retirement 20-Sept-22 • 9.Age at retirement 65 • 10. Pension code 14 • 11. Location in College Secretary for XXX • 12. PPS no 1234567A • 13. Salary (current) €56,602 12D Pt 5 • 14. Pension Fraction 60ths • 15. Pension Fraction (alternative) 80tths • Social Welfare (A) 11,971 (B) 23,951 (C) 17,963 (D) 39,919

18. SAMPLE PENSION STATEMENT and Scope for AVC and Notional Years Purchase- Contd • Service Years Claw back • 16.Actual Service 19.902 0 • Purchased 0 0 • Transferred • Unpaid leave -0.0027 • Total (MAX 40) 19.8997 • 17. Pension based on sixieths (1/60) • Years*Salary (less C acove *1/60 €12,815 • Less clawback 1/9*lump sum c/b €43 • €12,772 • 18. Pension based on eightieths 1/80 ( alternative to 17) • Service X (3.33OAP or Sal if less3.33 OAP)200 €3,972 per annum • Service X (Salary-3.33 OAP)80 €4,150 per annum • €8,122 per annum • Plus Lump Sum • Years *Salary*3/80= €42,239 First €200K Tax Free • Less Clawback years % of Salary €388 • Net of Clawback €41,851

19. Continued. • 19. Death Benefits in retirement • Spouse or civil Partners and Childrens Pension in retirement • Spouse or Civil Partners Pension • ½ of pension based on (1/80) €5,550 per annum • Childrens Pension €1,850 per annum • ( Social welfare payable to spouse on death under S/W rules) • SERVICE BREAKDOWN THEN LISTED.

20. OPTIONS FOR NOELLE HACKETT • 1. Can Purchase Notional Years Service to go from 19.902yrs to 40 Yrs Max- purchase an additional 20.1 yrs • 2. Fund AVC for • (a) Bridge GAP Tax free Lump sum Revenue permits 120/80ths for greater than 20yrs service, 19 yrs =114/80ths of Final Salary [114/80 of €56,602 = €80,657 • NUI Galway provide 3/80ths for every actual Year • (59.67/80ths )€42,239 • Shortfall between Revenue and NUI Galway =€38,418 • FUND AVC FOR €38,418 tax free in addition to NUI • 2(b)Fund AVC to take upto €80,657 TAX FREE from AVC – • opt not to take Tax free Lump sum from NUIG in Section 17 , and take higher pension €12,815 per annum . Permitted once your Pension is less than 50% of your salary after Tax free Lump sum – This case €12,815 is only 22.6% and not 50% of €56,602

21. Options Continued • Decision to Take Tax free Lump sum or Higher Pension. • This Case • Pension of €12,772 per annum • Or • Pension of €8,122 per annum + €42,239 Lump • By taking lump from Pension You are losing €4,650 per annum Guaranteed for LIFE • Divide Lump sum by €4650 and that equals 9.08 YRS • So if you were to live for at least 9 yrs post retirement or longer then You need to consider the VALUE, the correct choices to be considered.

22. ESMA RISK RATING – What is yours? • European Securities Market Authority (ESMA) Jan 2014 • Guidelines on all investment funds throughout Europe assessed for risk rating • 1-very low 2 -Low risk 3- low to medium 4- medium risk • 5- medium to high 6- high risk 7- very high risk • Questionnaire 15 questions using EValue to ascertain your Risk profile • Email Noel.hackett@newireland.ie and ask for Questionnaire, and your free Report. • Risk for both regular investing and lump sum investments.

23. 2015 Finance Act- Main changes • Pension Levy 0.15% in 2015- Abolished in 2016 • Standard Fund Personal Threshold to €2m • Defined Benefit Changes • DIRT Tax 41% plus 4% PRSI • Inheritance Tax Threshold • Gift Tax • Age Exemption Limit @ Retirement

24. AVC Account- Pensions on line Facility • www.newireland.ie Pension Schemes On Line (PSOL ) • To track your own pension account • Secure access to your account • Values updated daily New Ireland Investment Centre http://fundcentre.newireland.ie • Up to date price\performance information • Monthly factsheets – include asset split, fund size etc • Graph performance of funds

25. “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

26. Lets begin by reminding ourselves of the cornerstone questions of any investment decision….. Objectives: What do you want to achieve? Timeframe: How long do you have to achieve it? Risk Profile: How much risk can/will you take to achieve it? Every aspect of investment advice should revolve around always being aware of your views on each of the three key points above!

27. The events of 2008 still fresh in our memories! • Sept. 8thFannie Mae & Freddie Mac under government control. • Sept. 14thLehman's files for bankruptcy • Sept 15thBank of America purchases Merrill Lynch • Sept 16th Fed takes 80% stake in AIG for $85bn • Sept 18thLloyds TSB takes over of HBOS • Central Banks globally pump $180bn of liquidity into the market • Marketban on short selling • Sept 19th Paulson announces ‘Troubled Asset Relief Program’ – markets soar • Sept 21stGoldman'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!!

28. 1st week in October 08: As bad a week in markets as we’d seen in decades!

29. This left many Investors very nervous about their future finances, long after the market began to recover! Is it safe to Come back out? “Both optimists and pessimists contribute to society, the optimist invents the airplane, the pessimist the parachute”….George Bernard Shaw

30. 1926 to 2014 annualised returns of the Standard and Poors equity index. S&P 500 Index - Total Returns • Year Year Year Year Year • 1926 11.62 1945 36.44 1964 16.48 1983 22.51 2003 28.68 • 1927 37.49 1946 -8.07 1965 12.45 1984 6.27 2004 10.88 • 1928 43.61 1947 5.71 1966 -10.06 1985 32.16 2005 4.91 • 1929 -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 5.49 • 1931 -43.34 1950 31.71 1969 -8.50 1988 16.81 2008 -36.99 • 1932 -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 15.06 • 1934 -1.44 1953 -0.99 1972 18.98 1991 30.55 2011 2.11 • 1935 47.67 1954 52.62 1973 -14.66 1992 7.67 2012 16.00 • 33.92 1955 31.56 1974 -26.47 1993 9.99 2013 31.90 • 2014 13.69 • 1937 -35.03 1956 6.56 1975 37.20 1994 1.31 • 1938 31.12 1957 -10.78 1976 23.84 1995 37.43 • 1939 -0.41 1958 43.36 1977 -7.18 1996 23.07 • 1940 -9.78 1959 11.96 1978 6.56 1997 33.36 • 1941 -11.59 1960 0.47 1979 18.44 1998 28.58 • 1942 20.34 1961 26.89 1980 32.42 1999 21.04 • 1943 25.90 1962 -8.73 1981 -4.91 2000 -9.10 • 1944 19.75 1963 22.80 1982 21.41 2001 -11.88 • 2002 -22.09

31. Cash funds offer little in terms of return….. 2011 > 5% 2012 > 4% 2013 .5% 2014 .25%

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

33. But we still only have a finite number of assets in which to invest! Equities Equities Property Deposits Property Alternatives Bonds

34. Avoidingsignificant losses should be the starting point for every successful investor! LossRequired Gain -20% +??% -40% +??% -60% +???% -90% +???% Minimisinglosses and reducing investment risk has become more and more important to investors after the great financial crisis of 2008.

35. Avoidingsignificant losses should be the starting point for every successful investor! LossRequired Gain -20% +25% -40% +66% -60% +150% -90% +900% Minimisinglosses and reducing investment risk has become more and more important to investors after the great financial crisis of 2008.

36. The power of stable returns The key learning from recent past…the power of stable returns. A +20% +20% -10% +29.6% B +35% -10% +5% +27.6% C +10% +10% +10% +33.1% “I have two basic rules to investment, Rule no1: Never lose money. Rule no 2: Never forget rule no 1”!! …… Warren Buffett Source: Newton

37. A complex market…which can be difficult to navigate Derivatives for Protection Tactical Asset Allocation Customer Questionnaires Property? Portfolio Construction ESMA? Total Return Strategies ¯ Protected Funds ¯ Manager Diversification Market Neutral Strategies Rebalancing? Regulation & Compliance

38. Investment Standard Suite Choice of 12 funds Independent fund managers Different risk levels

39. SSgA — A True Global Player €2.0 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

40. SSgA: Size isn’t Everything…. But it Helps! • Snap shot of how SSgA measure up against some local competitors Global AUM (€ Billion) Source: P&I/Towers Watson Global 500 year end 2012. IREPRS-0516

41. Passive IRIS Performance (as at 14.04.2015) IREPRS-0960 Source: New Ireland Fund Centre as at 14 April 2015. Past performance is not a guarantee of future results. Performance returns for periods of less than one year are not annualized. The performance figures contained herein are provided on a gross of fees basis and do not reflect the deduction of advisory or other fees which could reduce the return. The performance includes the reinvestment of dividends and other corporate earnings and is calculated in in Euro. Source: New Ireland Fund Centre 41

42. Passive IRIS Glide - Path Default Fund

43. Active IRIS Performance (as at 14.04.2015) Source: New Ireland Fund Centre as at 14 April 2015. Past performance is not a guarantee of future results. Performance returns for periods of less than one year are not annualized. The performance figures contained herein are provided on a gross of fees basis and do not reflect the deduction of advisory or other fees which could reduce the return. The performance includes the reinvestment of dividends and other corporate earnings and is calculated in in Euro. 43

44. Active IRIS Glide Path

45. A Different Approach… Lifestyling – Moving to safer assets as you get older Passive approach… Active IRIS approach… Absolute Return Bonds / Cash Equities Source: SSgA. This chart is for illustrative purposes only. IREPRS-0740

46. 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.

47. Target Return Strategy

48. Target Return Strategy Helps Manage Risk

49. Target Return Strategy Helps Manage Risk

50. Passive Management Why SSgA for Passive? 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 Trading 1 SSgA Global Trading Desk for year ending 2012. 2Boston Global Passive Equity Desk average, Q2 2013. 3 Average Commissions paid on traded, Boston Global Passive Equity Desk, Q1 2013. 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. IREPRS-0740