1. Presentation to Presented by:- Noel Hackett (QFA, MIB, Dip Invest) New Ireland Assurance Senior Pensions Consultant Tony Delaney- Area Manager 5 th,8th & 9 th April 2013. time11.00;13.15;15.00

2. 2 Benefits at Retirement  At retirement your benefits will come from:- – State Pension – NUIG Scheme – Purchase Notional yrs – Additional Voluntary Contributions ( AVCs ) – Accumulated wealth/savings/inheritances

3. 3 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

4. 4 Key Dates  1995  Future employees pay PRSI and receive – State Pension – Lower pension from NUIG  2004  Future employees have minimum RA of 65  Immediate early retirement pension available - – Existing employees from 50 – New employees from 55

5. 5 NUIG Scheme – Pre 2004.  Normal Retirement Date is age 65. – but can retire from age 60 onwards  Pension – 1/80 th x Pensionable Service x Pensionable Salary – State Pension not payable (pre 95!)  Lump Sum – 3/80th x Pensionable Service x Pensionable Salary

6. 6 Example – Pre 1995  Employee on a salary of €50,000 joined NUIG in 1990 at age 30  Service to age 60 is 30 years  Pension from 60 is €18,750 p.a. – 30/80ths x €50,000 – State Pension not payable  Tax Free Lump Sum is 90/80ths of €50,000 - €56,250

7. 7 NUIG Scheme – Post 1995  Normal Retirement Date is 65, BUT can retire…. – Pre 2004 employees – From age 60 – Post 2004 employees – From age 65  Pension – 1/200 th Pensionable Service x Pensionable Salary Plus – 1/80 th x Pensionable Service x Pensionable Salary – State Pension also payable  Lump Sum – 3/80th x Pensionable Service x Pensionable Salary

8. 8 Example – Post 1995  Employee on a salary of €50,000 joined NUIG in 2000 at age 30  Service to age 65 is 35 years  Pension from 65 is €11,396 p.a. – 35/200ths x €40,040 = €7,007 pa – 35/80ths x €9960 = €4,357 pa – State Pension also payable –  Tax Free Lump Sum is 105/80ths of €50,000 - €65,625

9. 9 State Pension  From 2012 – Single Person €230.30 per week – Married Couple €383.80  Applies to all employees who joined since 1995

10. 10 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

11. 11 Early Retirement Benefits – NRA 60  Employee on salary of €50,000 joined before 1995 - early retiring at 55  Service completed 25 years  Pension : 77.8% x 25/ 80ths x €50,000 = €12,156  Tax Free Lump Sum : 90.7%x 75/80ths x €50,000 = €42,515

12. 12 Employee Contributions  Contributory for new Entrants post April ’95  Total Contribution Rate is 6.5% Lump Sum 1.5% Pensionable Remuneration Pension 3.5% Net Pensionable Remuneration Spouse/Civil Partner & children’s pensions 1.5% Pensionable Remuneration

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

14. 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. 15 AVC Scheme  You can pay into the AVC Scheme  No promised benefits – will depend on – Investment Returns – Annuity Rates – if you buy a pension at retirement  Can be more flexible than added years, you can – Select a monthly contribution – Save for a specific benefit - lump sum only – ARF option

16. 16 Scope for AVCs  Did you join after 1995 ? – Pension lower than Revenue will allow  Do you – Wish to retire early ? – Have short service ? – Want to provide a higher Spouses Pension  Is your – Pension & Lump Sum based on your final (cut) salary – Scope to enhance this - “Revenue Final 10 year salary rule”

17. 17 Additional Voluntary Contributions  Government incentive through:- – Tax Relief, at source – Generous contribution limits – ARF option – greater flexibility at retirement  NB – Pension Fund levy of.6% of fund will cease in 2014

18. 18 Employee Tax Relief Limits (including AVCs)  Age% of Remuneration  Up to 3015%  30 – 3920%  40 – 4925%  50 - 5430%  55-5935%  60 Plus40%  An earnings cap of €115,000 (2013) will apply to Employee Pension Contributions for the purpose of tax relief.  The above limits include contributions to NUIG Pension Scheme

19. 19 Tax Relief  Monthly Contribution €400.00  Tax Relief€80.00 €164.00  Net Cost€320.00 €236.00  Contributions and tax relief operated at source

20. USC for self assessed under age 70 the 2013 rates Part of aggregate income Rate of USC First €10,0302% Next €5,9804% Next €83,984+7% Income > €100,00010%

21. 21 TAX CREDITS 2013 20102013€ Employee Tax credit1,8301,650 Personal tax credit-single1,8301,650 -married3,6603,300 Widowed bereaved in yr of ass. 3,6603,300 One parent family tax credit1,8301,650 Home carer tax credit900810 Dependant relative8070 Blind person credit-single1,8301,650 both blind -married3,660 3,300 Additional credit widowed pers600 540 Age credit-single325 245 Age credit married650650

22. 22 Standard Rate Bands 20102013 €€ Single/Widowed 36,400 32,800 Married-one income 45,400 41,800 *Married-two incomes 72,800 66,500 One parent/Widowed 40,400 36,800 »With a max transferability between spouses of €45,400 in 2010 and €41,800 in 2011 »AGE EXEMPTION LIMIT 20102013 Single€20,000€18,000 Married€40,000€36,000 Unchanged for 2013.

23. 23 Example  Employee aged 45 on a salary of €60,000 who joined post 1995  Maximum AVC contribution is:- 25% of €60,000€15,000 Less 1.5% of €60,000 € 900 Less 3.5% of €60,000 - €23,951 € 1,262 Scope for AVC €12,838

24. 24 29yrs service. Age 65. Salary €59,000 NUIG Pension €12,705.38p.a. NUIG Tax free lump sum€64,162.50 AVC Fund built up in 5 yrs @ €300pm =€21,075.30 Net cost, after tax relief for Mary was€10,620.00 that she paid TAX free lump sum from AVC is €21,075.30 Could have been €24,337.50 from AVC if it was in her fund. Tax free LUMP SUM approved by Revenue is €88,500 Actual AVC Member – Example Mary Murphy Retired in April 2010.

25. 25 Options at Retirement  Tax Free Lump Sum ( Up to €200,000 )  Ongoing Pension – Personal – Spouses  Approved Retirement Fund ( ARF) – Minimum income of €12,700 – Invest €63,500 in AMRF – Free to invest as you wish – Withdrawals taxed as income

26. 26 AVC Drawdown  For next 3 years – Draw down up to 30% of AVC Fund – Tax payable at your marginal rate – Only one “ opportunity” to make a drawdown  Care needed before drawdown considered

27. 27 Making it easy to track your Fund Pensions Schemes Online  Password protected website  Information on – premium history – fund value – Estimated fund at retirement  It is free and easy to use  Review yearly – especially if circumstances change

28. 28 Investment Options – There are13 funds available to Invest in including the Default Fund The IRIS Retirement Fund – Strongly recommend all members to review their fund choice with Noel Hackett

29. 29 Default Investment Strategy  Your AVCs will be invested in the default strategy if you don’t chose a fund  The Default Strategy is the Individual Retirement Investment Strategy ( IRIS ) – The longer the term is to retirement, the higher the proportion invested in equities and other growth assets – As retirement approaches, the purchasing power of the fund is protected by switching into Fixed Income Assets/Cash

30. 30 Improvements to IRIS  Improvements implemented in December 2012  Part of the equity content replaced by a Target Return Strategy  Two Key Benefits – Greater diversification – Greater flexibility

31. 31 IRIS Glide Path – Default Fund

32. 32

33. 33 IRIS Performance – to 1 st March 2013

34. 34 Other Investment Options Low Risk Cash Fund IRIS- Default Fund- Lifestyle Fund. Medium Risk Pension Gilt Fund BNY Mellon – Elements – Protected Assets  Medium to High – Pension Managed – Consensus Managed – Ethical Managed – Evergreen Fund High Risk – Pension Equity Fund – Innovator

35. 35 Performance Figures  FUNDpast 12months 3yrs pa 5yrs pa  Cash Fund(L)0.2% 0.7% 1.6%  Gilt Fund(M)7.7% 5.1% 5.8%  BNY Mellon(M)8.8% 3.6% n/a  Elements(M)4.4% 4.6% n/a  Protected (M) assets(M) 4.3% n/a n/a  Managed(M-H) 12.5% 9.1% 3.1%  Consensus(M-H)12.8% 9.5% 2.9%  Ethical(M-H)11.8% 9.3% 3.4%  Evergreen(M-H)9.4% 7.7% 1.0%  Equity Fund(VH)14.5% 10.5% 3.4%  Innovator(VH)7.7% 6.3% -1.9%  Funds are updated each day.  L-low risk M -Medium risk H- High risk VH -Very high risk

36. 36 Investment Information - New Ireland Website  www.newireland.ie www.newireland.ie  Click on – Pension – I have a pension – Public Centre – Investment Choice and Performance  Up to date fact sheet for each available fund\ – performance of each fund over various time periods – asset splits, fund size etc

37. 37 Other Information - New Ireland Website  www.newireland.ie www.newireland.ie  Click on – Pension – I have a pension – Public Centre – Popular forms and booklets

38. 38 What Should I Do Next? Contact: Pensions Office NUI Galway Ph 091-495028 ext: 5028 Email : pensions@nuigalway.ie@nuigalway.ie Or: Noel Hackett, QFA, Pensions Consultant New Ireland Assurance Tel 061312166; Mobile 086-8186163 Email: Noel.hackett@newireland.ieNoel.hackett@newireland.ie

39. 39 Individual Consultations Available Noel Hackett will be in available for Individual Consultations of 45 mins duration (09.00 – 17.00) Pensions and Investments Office 8 Lower Newcastle Road 10 th, 11 th 12 th 15 th and 16 th April 2013 Contact Ann Cormican or Jacqueline Joyce in Extn 5901/5028 to reserve time. Email: ann.cormican@nuigalway.ieann.cormican@nuigalway.ie Jacqueline.joyce@nuigalway.ie

40. 40 Any Questions? Thank You for attending

41. 41 Cost Neutral Early Retirement Age Pension %Lump Sum % 5062.482.2 5165.183.9 5267.985.5 5371.087.2 5474.388.9 5577.890.7 5681.692.4 5785.794.3 5890.196.1 5994.898.0 Factors to calculate reduced Lump Sum and Pension (Age 60)

42. 42 Cost Neutral Early Retirement Age Pension %Lump Sum % 5558.282.4 5661.184.0 5764.185.6 5867.487.3 5971.089.0 6074.890.7 6179.092.5 6283.694.3 6388.596.1 6494.098.0 Factors to calculate reduced Lump Sum and Pension (Age 65)