Fernando Jaime Vice President, Global Pensions Products, METLIFE (U.S.A.) Friday,

Fernando Jaime Vice President Global Employee Benefits – Pensions Hellenic Association of Insurance Companies, Hydra Meeting September 2013 Securing the Future of Pensions - The Growing Importance of Supplementary Pension Funds MetLife Alico Life Insurance Company Societe Anonyme

2 Greece’s Aging Population ) U.S. Census Bureau, “International Programs - Population Pyramid Graph” - accessed on June 17, 2013 Greece Population Over 65 Working Age Population Greece Population by Age Group & Gender (In Thousands) Age Dependency Ratio at 29% 1 to 3.4

Age Dependency Ratio at 59% 1 to 1.7 Age Dependency Ratio at 29% 1 to 3.4 Greece Greece Greece’s Aging Population ) U.S. Census Bureau, “International Programs - Population Pyramid Graph” - accessed on June 17, 2013 Population Over 65 Working Age Population Greece Population by Age Group & Gender (In Thousands)

4 Implications of an Aging Population Demographic Drivers ● Increasing Longevity ● Decreasing Birth Rates Governments must address unsustainable entitlement programs ● Pensions ● Long-Term Care ● Health Care ● Unemployment Benefits Greece Greece Age Dependency Ratio at 29% 1 to 3.4 Age Dependency Ratio at 59% 1 to 1.7 1) U.S. Census Bureau, “International Programs - Population Pyramid Graph” - accessed on June 17, 2013

5 Pressure on Public Finances 1st Pillar State, Mandatory What Options Do Governments Have? Raise Taxes Raise Retirement Ages Decrease Entitlement Benefits Shift Towards Mandatory or Voluntary Funded Pension Savings –Individual Pensions –Occupational Pensions 2nd Pillar Private, Mandatory 3rd Pillar Private, Voluntary –2nd or 3rd Pillar System

6 What System is Best? There is no single best pensions system for all countries 1 Countries have Established Structures for addressing goals Economic Constraints impact administrative capabilities Political Processes affect what is politically feasible Policy Makers attach different relative weights to their objectives History influences politics and the overall propensity for change 1) Adapted from Barr, Nicholas and Diamond, Peter, “Pension Reform in China: Issues, Options and Recommendations” - February 2010 Trend of transitioning away from a heavy reliance on PAYG systems in favor of Multi-Pillar Frameworks with a Funded Element

7 Comparison of Funded Pensions 1) OECD, “Pension Markets in Focus: Global Pension Statistics” - September 2012 Funded Pensions AUM Relative to Economy Size (as % of GDP, 2011) 1  Netherlands at 138.2%  United States at 70.5%  Chile at 58.5%  Greece at 0.0%

8 Structural Overview - Netherlands (Quasi-Mandatory) 1  Funded voluntary occupational system  Participation is generally not mandatory  Administered by a Pension Fund or Insurance Company  Highly developed occupational schemes  Collective risk sharing  Transferable value  Operates independently from sponsor  “Soft promise” benefits  Benefits adjusted with life expectancy  Funded Pension Assets at 138% of GDP (2011) 2  Net Replacement Rate at 103% (2011) 3 StructureCapabilities Reforms Potential - Recent 1) Adapted from the Dutch Pension Fund Organization, “The Dutch Pension System: An Overview of the Key Aspects” - October ) OECD, “Pension Markets In Focus: Table of Pension Fund’s Total Investment by Country” - September ) OECD, “Pensions at a Glance 2011: Retirement - Income Systems in OECD and G20 Counties” (Net Replacement Rate respective to median earner) Level of Success

9 Structural Overview - U.S. 401(k) (Voluntary) 1  Funded voluntary occupational system  For employees at qualified companies  Tax-deferred with matching  Multiple regulatory agencies  Portability between employers  “Catch-Up” Contributions  Range of investment options  Lifecycle Funds StructureCapabilities Reforms Potential - Recent  Auto-Enrollment  Fee disclosures  Default investment options  Funded Pension Assets at 71% of GDP (2011) 2  Net Replacement Rate at 53% (2011) 3 1) Adapted from ING Global Retirement Services, “Country Pension Models Around The World” ) OECD, “Pension Markets In Focus: Table of Pension Fund’s Total Investment by Country” - September ) OECD, “Pensions at a Glance 2011: Retirement - Income Systems in OECD and G20 Counties” (Net Replacement Rate respective to median earner) Level of Success

10 Structural Overview - Chile (Mandatory) 1 1) Adapted from ING Global Retirement Services, “Country Pension Models Around The World” ) OECD, “Pension Markets In Focus: Table of Pension Fund’s Total Investment by Country” - September ) OECD, “Pensions at a Glance 2011: Retirement - Income Systems in OECD and G20 Counties” (Net Replacement Rate respective to median earner) StructureCapabilities Reforms Potential - Recent  Funded mandatory individual system  Replaced public PAYG system  Providers (AFPs) compete on price, service, and performance  Freedom & flexibility  Diversified investment options  Benefits based on contributions and fund yields  Retirement and disability coverage  Increase investment options  Mandatory contributions for self-employed  Funded Pension Assets at 59% of GDP (2011) 2  Net Replacement Rate at 66% (2011) 3 Level of Success

11 Transition from Pay-As-You-Go to Funded Systems Gradual Transition Voluntary Contributions Limited Participation Lower Contribution % Partial Adequacy Coverage Blended Financing (e.g. Taxes and External Capital) Immediate Transition Mandatory Contributions 100% Participation Higher Contribution % Fixed Adequacy Coverage Tax or Debt Issuance Financing Aggressive TransitionModerated Transition

Full service & bundled solutions Single business partner with longstanding experience Professional asset management Diversified low-cost institutional investment options Life cycle investment strategiesRisk adjusted asset allocations Annuitization during payout phaseProtects against longevity risk Established distribution and sales channelsExtensive sales network coverage Sales and employee enrollment campaignsSupports plan setup and participation Communication and education for associations, employers, and employees Promotes financial literacy and convenient account access 12 Role of Insurance Companies 1 1) Adapted from the OECD, “OECD Pensions Outlook 2012” Meaningful BenefitsServices Provided

13 Pension Design Considerations Mandatory Funded Scheme - Sponsored at Employer Level Defined Contribution (DC) Ring-Fenced Pension Assets Contribution Rate Achieving Adequate Replacement Benefit Benefits Paid as Programmed Withdrawals and / or Annuities Tax-Based Incentives Existing Insurance Company Licenses Extended into New Roles

14 This material does not constitute legal or tax advice. For such advice please consult with your own legal and tax advisors. MetLife Alico Life Insurance Company Societe Anonyme is an affiliate of MetLife, Inc. Copyright 2013 MetLife, Inc. L [exp0214][All States] Thank You