1. Sick Pay Changes & Changing Pension Landscape Presentation to HMI HR Group November, 2013. Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland. A member of the Irish Life Group Ltd. Irish Life Assurance plc is regulated by the Central Bank of Ireland. Telephone calls may be recorded for quality control and training purposes.

2. Founded in 1972 (40 th Anniversary in 2012) One of Ireland’s largest brokers recognised as market leader in affinity schemes for Public Sector employees. Acquisition of Marsh VGS’s in January 2013 We now deal with over 14 Public Sector unions and administer over 50 Schemes covering over 53,000 public sector employees Now a member of the GreatWest LifeCo group of companies.

3. Key topics of today’s presentation

5. Current proposals represent the biggest ever changes to sick pay for all Public Sector employees.

6. Proposed changes to paid sick leave Paid Sick leave Self-certified sick leave reduced from 7 days in 1 year, to 7 days in a rolling 2 year period From 1 st January 2014 - 3 months full pay & 3 months half pay (in a rolling four year period) Paid Sick leave for ‘Critical’* Illness - 6 months full pay, and 6 months half pay (in a rolling four year period) *Not yet defined Pension Rate of Pay re-branded ‘Temporary Rehabilitation Pay’ Already in place

7. Temporary Rehabilitation Pay €3,931 Early Retirement Pension €5,678 State Illness Benefit €9,776 State Invalidity Pension €10,062 100% 75% 25% 50% Up to 13 weeks After 13 weeks After 26 weeks After 2 years Half Pay Full Pay €45,000 €22,500 Could you survive on a fraction of your salary? Proposed Sick Pay Arrangements The example above is based on a permanent, full-time Public Servant, who is a member of the Superannuation Scheme, with 15 years’ service earning €45,000 p.a., paying PRSI at the ‘A’ rate, who is now unable to work due to a long-term illness or disability. Claim is not for a critical illness. Member had no previous illness before joining the Scheme.

8. Could you automatically go onto HALF PAY if you fall ill in 2014? 20102011201220132014 HALF PAY Example: In early 2011 Mary, a Public Sector employee, broke her leg and couldn’t work for 12 weeks. In 2012, she fell ill again and was out of work for a further 2 weeks. Since then Mary hasn’t been out sick. However, come January 2014, Mary needs to know that if she falls ill again and cannot work, her pay will automatically drop to HALF PAY; as she has already used up her 13 weeks full pay allowance. 12 WEEKS 2 WEEKS ? No sick leave

9.  What constitutes a Critical Illness has not yet been defined but as per insurance industry the typical examples are: Cancer Stroke Heart related illnesses  It will be provided for 6 months full pay, followed by 6 months half pay in a rolling four year period. (This Critical Illness entitlement is at the discretion of the employer) Critical Illness

10.  Previously known as ‘Pension Rate of Pay’  Payable for UP to 18 months after the 6 months certified sick pay run out  You must apply for Rehabilitation Pay before your sick pay runs out – will be subject to periodical reviews (probably every 3 months)  Reviews will be carried out by an Occupational health consultant or by MedMark occupational healthcare. Temporary Rehabilitation pay

11. How is Rehabilitation Pay worked out?  €45k salary with 15 years service A1 and D1.  Actual 80 ths worked is Rehabilitation Pay  D1 PRSI = Pensionable Remuneration x years of service 80 €45,000 x 15/80 = €8,438 (subject to minimum State Disability Benefit)  A1 PRSI = Years service x 1/200 th x (CSP* x 3.333) + Years service X 1/80 th x (Salary – (CSP x 3.333)) ((15 X 1/200) x (€12,017 X 3.333)) + (((€45,000 – (€12,017 x 3.333)) X 15/80) = €3,931*Contributory State Pension

12. What happens after 18 months? 3 Options 1.Early Retirement Pension – Use of Early Retirement Pension table to calculate pension & gratuity  Retiring on Ill Health means you cannot return to work in the Public Sector 2.Option to go back to work 3.You can opt to a maximum of 12 months of unpaid leave  After 12 months you must either: I.Take Early Retirement Pension II.Go back to work or III.Resign from your current position

13. Cornmarket can advise on all options 2 Options to Protect Your Salary 1 Union Salary Protection Group Schemes INMO SIPTU Schemes Impact PNA IHCA 2 Private Salary Protection Plans AVIVA Friends First New Ireland Irish Life

14. Scheme Benefit Temporary Rehabilitation Pay €3,931 Early Retirement Pension €5,678 State Illness Benefit €9,776 State Invalidity Pension €10,062 Scheme Benefit €20,043 Scheme Benefit €18,010 100% 75% 25% 50% Up to 13 weeks After 13 weeks After 26 weeks After 2 years Half Pay Salary Protection Schemes Post 1 st January 2014 With Salary Protection you will receive up to 75% of your salary* Full Pay €45,000 €22,500 €11,250 *Less any Temporary Rehabilitation Pay, Early Retirement Pension an/or State Illness Benefit to which you are entitled. The example above is based on a permanent, full-time Public Servant, who is a member of the Superannuation Scheme, with 15 years’ service earning €45,000 p.a., paying PRSI at the ‘A’ rate, who is now unable to work due to a long-term illness or disability. Claim is not for a critical illness. Member had no previous illness before joining the Scheme.

15. What does it mean for you? Salary €45,000 Service 15 years After 26 weeks €33,750 After 13 weeks €33,750 After 2 yrs onwards… €33,750 Salary €45,000 Service 15 years After 26 weeks €13,707 After 13 weeks €22,500 After 2 yrs onwards… €15,740 Example: WITH Salary Protection Example: WITHOUT Salary Protection Example above is based on a Public Servant, who is a member of the Superannuation Scheme, with 15 years’ service earning €45,000 p.a., paying PRSI at the ‘A’ rate, who is now unable to work due to a long-term illness or disability. Standard sick leave is assumed. Member had no previous illness before joining the Scheme. The example above assumes that Temporary Rehabilitation Pay and State Illness Benefit is paid for up to a maximum of 2 years and, thereafter, the member is granted an Early Retirement Pension and State Invalidity Pension.

16. The teams responsible for the smooth administration of Salary Protection schemes are:- Phone Assistance One to one meetings in Office or Clients home nationwide Assistance with arranging medicals Help with Appeals process with the Insurance Company Help with FSO (Financial Services Ombudsman) if required. Tara Cassidy Assistant Manager in charge of Claims Claims Handling

18. Source: The Economist – 07.04.11

19. People living longer in retirement 1950: 7.2 people aged 20-64 for every 1 person over 65 1990: 5:1 2012: 3.5:1 2050: 1.8:1 In other words, every couple will be supporting a pensioner “Ireland’s numbers in retirement will double before 2040 to over 1m people with the biggest increase in the over 85s age group”* *Source – Department of Health Source: The Economist – 07.04.11

20. In the USA, if a married couple both retire at 65, there’s a 50% chance one will live to 90+ 1.People Live Longer greater need for private health care nursing homes additional pressure on health care services increased health costs longevity Source: The Economist – 07.04.11

21. 3.Governments and companies cannot offer DB schemes If pensions are underfunded or government does not have enough money to pay pensions, they can reduce cost or burden by: –Raising taxes for existing workers –Current generation of workers fund more to Pension –Raise retirement age –Halt practice of early retirement –Auto-enrolment: compulsory for everyone to pay into a Pension –Link retirement age to longevity.

22. Proposed Retirement Dates How are Countries planning to deal with this?

23. Spending in Retirement In retirement, people’s spending profile is U-Shaped years spending 60s70s80s Travel & spend Still active more time at home spend less accumulate healthcare spend more Source: The Economist – 07.04.11

24. OAP now moving from age 65 -> 68 Tax relief on pensions still available @ 41%* Once-off option to withdraw up to (maximum) 30% of the value of your AVC Fund, subject to tax Currently different Pension Schemes exist in the Public Sector: Category 1. Pre 1995 Category 2. 1995 to 2004 Category 3. 2004 to 2009 / 2010 to 2012 Category 4.1 st January 2013 - Single New Pension Scheme What are your options? …NSP, AVCs/PRSAs etc. SalaryAgeServicePension € 55,000 6030 yrs €20,625 Pension Entitlements Pre 2004 (inc Supp Pen for A Class PRSI) €8,68630 yrs60€55,000 Cost Neutral Early Retirement Post 2004 *subject to paying the higher rate of tax

25. Benefits payable from your Superannuation Scheme P ension L ump Sum S pouse & Children’s Benefit Taxed & Paid for Life Tax-Free & Paid Once Payable on Death What’s important when working out my pension? Starting dates & re-entry dates Service history Final salary (except for 2013 Scheme) Relevance of Social Welfare in your pension

26. New Single Public Service Pension Scheme (Career average earnings) Retirement in line with State pension age (SPA): 66 to 68 Minimum pension age of 66 to 67 in 2021 and to 68 in 2028 Pensions being linked to life expectancy (from 65 to 66 in 2014) How will it work? Referable amounts will accrue for each year service Accrual rates of 0.58% on first €45k and 1.25% on balance Lump-sum accrual rate of 3.75% Annual increase in referable amounts in line with CPI. New Pension Scheme for 2013

27. Enhancing your Pension

28. Retirement planning is still a very tax efficient way to save Contribution €100 Less tax relief (assuming tax @41%) -41.00 NO PRSI rate (removed in Budget 2011) Real cost to you for every €100 €59.00

29. 1.Repurchase Superannuation credit for yrs spent in part- time/temporary service OR any Gratuity or Refunds 2. Buy Superannuation credit for missed years of service - Notional Service Purchase Scheme (NSP) 3. Fund additional benefits for your retirement - Additional Voluntary Contribution Scheme (AVCs) or - Personal Retirement Savings Account (PRSA). Options Available

30. € 00,000 Top up tax free lump sum to its max Mixture of other options Pension (Annuity) € 000 p.a. Employer options How an AVC can be used ARF/AMRF € 00,000

31. Last minute AVCs – (Dynamisation)

32. Issues to be aware of for Retirement Planning 1.Public Sector Pensions Act 2012 (Career Averaging) 2.Public Service Superannuation Act 2004 3.Cost Neutral Early Retirement 4.Personal tax rates – now & in retirement 5.Social Welfare entitlements 6.Tax Relief Scope & limits 7.Fee, Charges, Commissions on Advice, AVCs & PRSAs 8.Partner Pension Details (if applicable).

34. 5 Modules to choose from

35. E-shot attachments for each module

36. Booklet & Booking form

37. Thank you for your attention Questions? Proud sponsors: Cornmarket Group Financial Services Ltd. is regulated by the Central Bank of Ireland. A member of the Irish Life Group Ltd. Telephone calls may be recorded for quality control purposes.