Outlook for European Pension & Defined Contribution AssetsWashington DC

September 17th 2013: 1:30 – 4:00 PM

Retirement Savings in Australia, Asia and Beyond:

What are the Lessons for the United States?

Voluntary Enrolment/Taxation Incentives• Germany

– Rapid Ageing of the Population– Generous PAYG 1st Pillar– Review of Occupational Pension Approaches– Riester Reforms – Tax Incentives – Capital Guaranteed Investment Solutions

• Ireland– Economic Austerity– Uneven coverage and contribution rates– Sharp Decline in DB – Waterford Crystal Case– OECD Report – Mandation vs AE– Response by Government to the OECD Report– Chronic Need for Sustainable Reforms– Social Cohesion

• France– Generous PAYG 1st Pillar– Decline in Occupational DB – Economic austerity– PERCO – first tentative steps towards collective– Wider pension reforms, ageing, economic austerity and industrial unrest

Auto-Enrolment • United Kingdom

– Modest PAYG 1st Pillar Pension– Embracement of Auto-Enrolment Experiences – Lessons from the United States– Development of NEST and Mastertrusts/Corporate Platforms– Target Dated Fund Growth– Price Capping – 4% employee, 3% employer and 1% by the government– Re-Enrolment after 3 years

• The Netherlands– Generous PAYG 1st Pillar– Decline of Defined Benefit Schemes– Sharp growth in defined contribution with underlying investment guarantee and AE– Collective DC Solutions– Pension Premium Institution (PPI) – Cross Border

Mandation

• Switzerland– PAYG – First Pillar– Referendum to move towards mandation in the first

half of the 1980s– Equal co-contributions from employers and

employees – increasing as you age 7% and 18%– Guaranteed rate of return/Domestic Investments– Prescribed Investment Approaches– National Consensus

Europe: Total Pension Asset Projections

In Millions of $USD

(a) (a) (a) (a) (a) (f) (f) (f) (f)2008 2009 2010 2011 2012 2013 2014 2015 2016

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

UK Switzerland Ireland

Actual Forecast

Tor Financial Consulting Limited Projections (2013)

Europe: Total Pension Asset Projections

(a) (a) (a) (a) (a) (f) (f) (f) (f)2008 2009 2010 2011 2012 2013 2014 2015 2016

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

2,718 4,167 5,298 6,676 7,978 8,137 8,363 8,727 9,383

Netherlands Germany France

Actual Forecast

Tor Financial Consulting Limited Projections (2013)

Europe: Total DC Asset Projections

In Millions of $USD

2008 2009 2010 2011 2012 2013 2014 2015 2016 -

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

UK Ireland Switzerland

Actual Forecast

Tor Financial Consulting Limited Projections (2013)

Europe: Total DC Asset Projections

2008 2009 2010 2011 2012 2013 2014 2015 2016 -

50,000

100,000

150,000

200,000

250,000

300,000

Netherlands Germany France

Actual Forecast

Tor Financial Consulting Limited Projections (2013)

Lessons for Europe - Australia

• Political agenda• Sharp DB Decline• Regulatory Approaches• Coverage and Contribution Considerations• Administration and Plethora of Accounts• Default Solutions• Need for Taxation Incentives