1. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 EU Pensions Directive - implications Brendan Kennedy

2. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Overview of new environment No change to principles underlying scheme investment Explicit rather than implicit rules Communication with members Some specific changes

3. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Current position 2005 Act passed but not commenced Regulations not yet published by DSFA Principles rather than detailed prescription 23 September, 2005

4. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 The Directive and investment Article 18 – investment rules Article 12 – statement of investment policy Article 11.3 – SIPP communication Article 9.1(c) – trustee training Article 9.1(f) – risks Article 11.4(c) – member information Article 13(c) – information to regulator

5. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Article 18 Assets invested in best interests of members and beneficiaries…ensure security, quality, liquidity and profitability…invested in a manner appropriate to the nature and duration of the expected future retirement benefits Look-through to underlying assets Predominantly regulated markets

6. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Article 18, continued Derivatives – only for reduction in investment risk or to facilitate efficient portfolio management Properly diversified Self-investment No borrowing

7. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Statement of Investment Policy Principles Prepare and maintain Review every 3 years Revise without delay At least describe –Investment risk measurements –Risk management processes –Strategic asset allocation Make available to members

8. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Trustee training Regulations to come Appropriate to level of delegation Investment management oversight

9. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Other member communication 9.1 (f) – Members must be sufficiently informed of… ‘financial, technical and other risks’… and ‘the nature and distribution of those risks’. 11.4(c) – Where the member bears the investment risk –Range of investment options –Actual investment portfolio –Information on risk exposure –Costs

10. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Information to regulator Regulator may see Asset liability studies Evidence of consistency with investment policy principles

11. Insert Corporate Logo here Annual Investment Conference 12 th April 2005 Summary Few new principles More awareness Better documentation