1. New Ireland Assurance
Provider of choice in the Life
and Pensions Market
NUI GALWAY PENSION & RETIREMENT PLANNING PRESENTATION- AVCs 08:45, 11:15, 13:30
ENG 2052
Presenter:
Noel Hackett - QFA Senior Pension Consultant
QFA, MIB, Dip Investment Planning. New Ireland Assurance Galway
Tuesday, 13th September 2016

2. Agenda: Time: approx 45mins
Introduction . About Noel Hackett and New Ireland Assurance
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 2016 and changes that may affect you
5 Investment Market Update and Investment Outlook for 2016
Fund Choice, Fund Manager, Fund Performance and Fund availability under your AVC Scheme
Questions and Answers?

3. Who Should I Contact: Pensions Office NUI Galway OR
Ph: (091) ext: 5028 OR
Noel Hackett, QFA, Pensions Consultant
New Ireland Assurance, Atlanta House, 36 Dominick Street, Galway
Tel: (091)
Mobile:

4. About New Ireland Assurance
New Ireland is a leading Life Assurance Company in Ireland
Provides life assurance, pensions & investment solutions to over 600,000 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

5. The Company has gone from strength to strength, from just £1,000 in assets in 1918 to over €16.4 billion today (April 2016)
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

6. Some of our NEW IRELAND`s 600,000 Clients

7. What s the first phrase that you read? Spot Prize !!!
OPPORTUNITYISNOWHERE

8. NUI PENSION: 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

9. 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)

10. 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

11. State Pension 2021 from age 67 2028 from age 68 From 2014
Single Person: € per week
Married Couple: €383.80
Applies to all employees who joined since 1995
State Pension from age 66
from age 67
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 )

12. 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

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

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

15. 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

16. Employee Tax Relief Limits (including AVCs)
Age % of Remuneration
Up to % % % % % %
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

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

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

19. SAMPLE PENSION STATEMENT and Scope for AVC and Notional Years Purchase
1.NAME Noelle Hackett
2. Employee no e
3. Gender female
4. Civil Status single
5.Date of birth
6. Starting pension Jul-01
7.Starting date (JPS) Nov-02
8.Date of Retirement Sept-22
9.Age at retirement
10. Pension code
11. Location in College Secretary for XXX
12. PPS no A
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

20. SAMPLE PENSION STATEMENT and Scope for AVC and Notional Years Purchase- Contd
Service Years Claw back
16.Actual Service
Purchased
Transferred
Unpaid leave
Total (MAX 40)
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) €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

21. 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, per annum
Childrens Pension €1,850 per annum
( Social welfare payable to spouse on death under S/W rules)
SERVICE BREAKDOWN THEN LISTED.

22. OPTIONS FOR NOELLE HACKETT
1. Can Purchase Notional Years Service to go from yrs to 40 Yrs Max- purchase an additional 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

23. 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.

24. 2016 Finance Act- Main changes
Pension Levy 0.15% in Abolished in 2016
Standard Fund Personal Threshold to €2m
Defined Benefit Changes
DIRT Tax 41% plus 4% PRSI
Inheritance Tax Threshold-slight increase €250K
Gift Tax
Age Exemption Retirement

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

26. 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
and ask for Questionnaire, and your free Report.
Risk for both regular investing and lump sum investments.

27. Member Engagement Risk Questionnaire
On joining the scheme new entrants can complete an online risk profiling questionnaire
Ensures that the fund (s) selected by the member falls in the appropriate risk category

28. The importance of investment advice

29. 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! 29

30. S&P 500 Index - Total Returns
1926 to 2014 annualised returns of the Standard and Poors equity index.
S&P 500 Index - Total Returns
Year Year Year Year Year

33. Cash funds offer little in terms of return…
Cash funds offer little in terms of return….. Almost negative interest rates
I think undoubtedly, interest rates will continue to fall over the coming months. As the banking system progresses from ‘survival mode’ back to ‘profitability mode’ margins will be squeezed and with our ECB rate at just .75% and Euribor rates at historic lows, it’s increasingly difficult to see how or why banks will continue to offer these highly unprofitable rates. With EU inflation on the rise and inflation in Ireland lurking about the 2.5% mark, we will all need to get back to considering life after the deposit rate!
2011
> 5%
2012
> 4%
2013
.5%
2016
.01%

34. Real Inflation Figures source Trading Economics
Inflation rate in Ireland averaged 4.77% from 1976 until 2015, reaching an all time high of 23.15% in October 1981, and a record low of-6.56 in October 2009
EU want inflation at 2% per annum
What have your utilities, insurances etc gone up by??

35. Real Effects of Inflation
Purchasing power of your money Assume €10,000 invested 1% Inflation 2% Inflation 3% inflation After 1 year 9,900 9,803 9,708 After 3 years 9,705 9,423 9,151 After 5 years 9,514 9,057 8,626 After 10 years 9,052 8,203 7,440 After 15 years 8,613 7,430 6,418 After 20 years 8,195 6,729 5,536 After 25 years 7,797 6,095 4,776

36. important to investors after the great financial crisis of 2008.
Avoiding significant losses should be the starting point for every successful investor!
Loss Required Gain
-20% +??%
-40% +??%
-60% +???%
-90% +???%
Minimising losses and reducing investment risk has become more and more
important to investors after the great financial crisis of 2008.

37. important to investors after the great financial crisis of 2008.
Avoiding significant losses should be the starting point for every successful investor!
Loss Required Gain
-20% %
-40% %
-60% %
-90% %
Minimising losses and reducing investment risk has become more and more
important to investors after the great financial crisis of 2008.

38. The power of stable returns
The key learning from recent past…the power of stable returns.
The power of stable returns
Year 1
Year 2
Year 3
Total return A
+20%
-10%
+29.6% B
+35%
+5%
+27.6% C
+10%
+33.1%
A % % % %
B % % % %
C % % % %
Avoiding the big losses and taking a steady consistent approach to investment remains the best long term investment approach. As our clients are typically ‘backward’ looking in their approach to investment, they need to see how something has done before they are interested in investing in it, rather than what it has the potential to do. End of year 1, everyone wants a piece of fund B, end of year two everyone wants a piece of fund A…….However long term, the consistency of fund C remains the better prospect and clearly illustrates the point of reducing investment losses.
“I have two basic rules to investment, Rule no1: Never lose money.
Rule no 2: Never forget rule no 1”!! …… Warren Buffett
Source: Newton

39. 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

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

42. 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 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 42

43. 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 43

46. Passive IRIS Glide - Path Default Fund

47. Active IRIS Glide Path

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

49. 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.

50. Target Return Strategy

51. Target Return Strategy Helps Manage Risk

52. Target Return Strategy Helps Manage Risk

53. Why SSgA for Passive? Passive Management 53
5353
5353
5353
5353
5353
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
All of what we have talked about up to this point is illustrated in the above graphs…world class index tracking, when compared to our competitors our index tracking capabilities and actual numbers (as per the graph above) are second to none and we continue to have some of the tightest tracking funds in the industry…
1 SSgA Global Trading Desk for year ending 2012.
2 Boston Global Passive Equity Desk average, Q
3 Average Commissions paid on traded, Boston Global Passive Equity Desk, Q
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 53 53 53

54. Passive IRIS – Global Equity (MSCI)
Country Allocation
Top 10 Stocks
% of Fund
APPLE INC
1.5%
EXXON MOBIL CORP
1.3%
MICROSOFT CORP
1.0%
GOOGLE INC-CL A
JOHNSON & JOHNSON
0.9%
GENERAL ELECTRIC CO
0.8%
WELLS FARGO & CO
NESTLE SA-REG
CHEVRON CORP
0.7%
JPMORGAN CHASE & CO 54
Source: Country Allocations and top 10 Holdings: ssga.com as at

55. Passive IRIS – Government Bonds
Country Allocation
Key Stats
Government Bonds
Long Government Bonds
Approx. Duration
6.9
12.4
Approx. Yield to maturity
1.2%
1.9% 55
Source: Country Allocations Are the neutral benchmark weights for both funds. The Key Stats are provided by SSgA as at and are based on the underlying SSgA funds.

56. Barclays Euro-Aggregate Corporate Bond Index
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 56
Source: Country Allocations and Key Stats are taken from SSgA.com as at and are based on the underlying SSgA fund “SSgA Euro Corporate Bond Index Fund”.

57. Performance Figures & Fund Choice
FUND past 12months 3yrs pa yrs pa
Cash Fund(1) % % %
Gilt Fund (4) % % %
BNY Mellon(4) % % %
Elements (3) % % %
Protected Assets (4) % % %
Managed (5) % % %
1Consensus(5) % % %
Ethical (5) % % %
Evergreen (5) % % %
Equity Fund(6) % % %
Innovator (6) % % %
Funds are updated each day.
ESMA Risk rating 1 to 7 scale
Values as at 1st September 2016
1- Changes to Consensus Fund by SSgA
Consensus is Now SSgA Pension Passive Multi Asset Fund

58. 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. 58

59. 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 59
Source: Stats taken from SSgA.com as at – SSgA EUR Liquidity Fund

60. So lets finish by looking at the correct investment process.
1. Your Goals
objectives
5. Regular Review
2. Your Risk
Profile
4. Investment
Fund choice
3. Asset Allocation

61. What word (s) can you see? Spot Prize

62. IN SUMMARY
Know your own pension scheme- what benefits you are going to receive.
Don’t be in the Dark and /or leave it too late.
Is this pension income likely to be enough?
Assess to see if it can be enhanced?
Assess possibility of enhancing your pension through purchase of Notional Years Service or AVC or combination of both .

64. ANY QUESTIONS What Should I Do Next? Contact:
Pensions Office NUI Galway
Ph: (091) ext: 5028 or
Noel Hackett, QFA, Pensions Consultant
New Ireland Assurance, Atlanta House, 36 Dominick Street, Galway
Tel: (091)
Mobile:

65. Individual Consultations Available
Noel Hackett will be available (9 – 5pm)
for Confidential Individual Consultations
IT Building Room 422
Wednesday 14th Sept 2016
Thursday 15th Sept 2016
Contact:
Karen Costello
Extn 5901/5028