1. Tapping into the opportunity of cross selling Christine van Staden – Regional VP, Business Development

2. Agenda 1. Market context 2. Employees’ perspectives 3. Employers’ perspectives 4. Gaps and opportunities 5. Cross selling era 6. Case study 2Standard Life Canada – IFB Toronto Fall Summit – November 2013

3. Market context

4. Current Retirement context Governments 60% of Canadians do not have private pension plans (Higher in SME’s) Baby Boomers aging and coming to retirement with depleted assets Looming liability that the governments cannot afford Focusing on increasing private pension coverage 4Standard Life Canada – IFB Toronto Fall Summit – November 2013

5. Market size A few key facts: 98% of Canadian businesses are small size businesses 1.7% of Canadian businesses are medium size businesses 48% of the total labour force in the private sector works for small sized companies 16% of the total labour force in the private sector works for medium sized companies In total, SMEs employ about 6.9 million, or 64% of private sector employees Source: Industry Canada, Key Small Business Statistics, July 2012 5 Standard Life Canada – IFB Toronto Fall Summit – November 2013

6. Market appetite Key findings from Standard Life research: 65% of SME employees are very concerned that they will not be able to retire comfortably 62% of SME decision makers indicate that employee retention in the first 3-4 years of employment is a challenge 87% of SME decision makers agree that having a workplace GS&R plan improves the company’s ability to attract new employees 86% of SME decision makers agree that GS&R plans help the company maintain a competitive position in the industry Source: SMEs Employees & SME Employers opportunities – Standard Life – September 2012 6Standard Life Canada – IFB Toronto Fall Summit – November 2013

7. Employees’ perspectives

8. Increased concerns about financial security Increased focus on debt management 8 Source: Retirement readiness study – Standard Life – November 2012 Realization of financial unpreparedness (not enough money to retire) Lack of GVT benefits raises an increase awareness about private pension plans Standard Life Canada – IFB Toronto Fall Summit – November 2013

9. Employees’ attitudes towards retirement Canadian employees are concerned about their retirement 9 Source: SMEs Employees opportunities – Standard Life – September 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

10. Important factors in talent acquisition Employees’ perspectives 10 Source: SMEs Employees opportunities – Standard Life – September 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

11. Current Benefits offered by Employers Employees’ perspectives Despite the importance assigned to GS&R plans, fewer than one-third of employees (32%) indicate that their employer offers a competitive GS&R plan. 11 Source: SMEs Employees opportunities – Standard Life – September 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

12. Employers’ perspectives

13. DB plan sponsors are facing funding issues because of low interest rates Aging Baby Boomers in the workplace are starting to retire There is an increased competition for a shrinking pool of talent Has raised an increased awareness about private pension plans 13 Source: Retirement readiness study – Standard Life – November 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

14. Perceptions of retention and turnover Employers’ perspectives Six in ten (62%) SME decision makers say that retention is a challenge with one in five (20%) stating it is a very significant challenge. 14 Half (50%) say employee turnover is a concern for their organizations. Organizations in growth phase are more likely to indicate retention (70%) is a challenge or that turnover is a concern (59%). Source: SMEs Employers opportunities – Standard Life – September 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

15. Perceptions of retention and turnover Employers’ perspective While employers say that retention and turnover are a challenge, few connect this to a lack of competitive benefits 15 Source: SMEs Employers opportunities – Standard Life – September 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

16. Future offering of GS&R plans % of employers who do not offer GS&R plans Employee retention/acquisition 69% Remain competitive with others 20% Other 11% Do not feel benefits justify the costs 31% Have never considered 13% Do not know 10% 22% increase in advocacy Source: SMEs Employers opportunities – Standard Life – September 2012 16Standard Life Canada – IFB Toronto Fall Summit – November 2013

17. Important criteria influencing decision makers Ease of ongoing use, management and administration of the plan Reasonable cost Product selection/flexibility Member services Source: SMEs Employers opportunities – Standard Life – September 2012 17Standard Life Canada – IFB Toronto Fall Summit – November 2013

18. Gaps and opportunities

19. Underestimating the underlying value of employee benefits While employees view GS&R as very important (ranked 3rd of benefits measured), employers are much less likely to say it is important (ranked 7th) 19 Source: SMEs Employees & SME Employers opportunities – Standard Life – September 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

20. Impact of group benefits on likelihood to recommend a company 20 Group benefits significantly increase the likelihood of employees being an advocate for their company Source: SMEs Employees & SME Employers opportunities – Standard Life – September 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

21. Cross selling era – setting you apart

22. Leverage cross-selling opportunities A wide majority (83%) of employees are interested in receiving financial advice, and other individual products and services from the advisor who deals with their company’s group savings and retirement planning. Employees A majority (58%) of employers indicate that they are interested in having their company GS&R advisor offer individual products and services to employees. Employers 22 Source: SMEs Employees & SME Employers opportunities – Standard Life – September 2012 Standard Life Canada – IFB Toronto Fall Summit – November 2013

23. Retain existing relationships 74% of decision makers at SMEs say they would be very (49%) or somewhat (25%) likely to involve an advisor in the decision 50% of retail advisors were asked by their retail clients to set –up a GS&R plan for their company 84% of advisors who offer GS&R say they have proposed a plan to a retail client 62% of these advisors say the client endorsed the proposal Source: SMEs Employees & SME Employers opportunities – Standard Life – September 2012 23Standard Life Canada – IFB Toronto Fall Summit – November 2013

24. Information sought from advisors by decision makers Source: SMEs Employers opportunities – Standard Life – September 2012 24Standard Life Canada – IFB Toronto Fall Summit – November 2013

25. Case study

26. Case study: make group benefits’ decision makers aware of turnover costs Group RRSP Most advisors/plan sponsors have initiated a pension program with a Group RRSP because it’s simple Drawbacks – especially for businesses with turnover: 1.Employer matches are through payroll – thus, employer incurs payroll taxes in the range of 12-14% 2.Money is immediately vested 3.Employee leaves in a year – takes all of their money 26Standard Life Canada – IFB Toronto Fall Summit – November 2013

27. Case study: make group benefits’ decision makers aware of turnover costs Standard Life Canada – IFB Toronto Fall Summit – November 2013 Group RRSP/DPSP Suggest restructuring the plan to save money by setting up a DPSP Advantages – especially for businesses with turnover: 1.Employee contributions go into the Group RRSP 2.Employer matches go into the DPSP – thus, no payroll taxes and 2 year vesting window 3.Employee leaves in a year – takes his money but leaves employers 27

28. Standard Life Canada – IFB Toronto Fall Summit – November 201328 Grab the opportunity! Drivers Impact Opportunity Market – the statistics support the need! Demographics – aging workforce not ready for retirement Government to find solutions DB sponsors need to react Employees looking for alternatives To promote private pension Cross sell to your existing book of business Now is the time to grab the opportunity!

29. Thank you! Questions?