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Proposal of Defined Benefit Plan Provider Selection ○ ○ ○

Proposal of Defined Benefit Plan Provider Selection ○ ○ ○. KB pension business department. 1. Services and commitment to ○○○. A. Implementation related services.

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Proposal of Defined Benefit Plan Provider Selection ○ ○ ○

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  1. Proposal of Defined Benefit Plan Provider Selection○ ○ ○ KB pension business department

  2. 1. Services and commitment to ○○○ A. Implementation related services KB advises and helps every single thing to make plan adoption successful. From making plan documents to filing them to the labor offices, we are involved directly and indirectly. We offer professional advices in every process.

  3. 1. Services and commitment to ○○○ A. Implementation related services • How long it will take? • In case of DB plan, we generally expect one month to go to the retirement pension. • To make seamless schedule, consult the direct responsible team from the beginning. Communication Time table

  4. 1. Services and commitment to ○○○ A. Implementation related services • What else can we do? • For smooth and peaceful agreement process, we open information sessions at every site of ○○○. • We offer guide books and pamphlet to help employees understand the retirement pension system fully. • For HR and finance staffs of ○○○, we suggest various simulations under variously given assumption(for example, plan selecting model, retirement benefits comparison under each plan, pension payment schedule for participants, expected tax savings). • We can participate in English conference call meeting to communicate with overseas offices of ○○○. • And English version of plan documents are offered for ○○○ to review.

  5. 1. Services and commitment to ○○○ B. Regular plan administration services • List of services that KB provide to HR team

  6. 1. Services and commitment to ○○○ B. Regular plan administration services • Customized report on regular basis to ○○○ • KB provide customized reports for ○○○ on monthly basis. The contents of this report is decided by ○○○ in advance. • The essential items of this report are reserve amounts, contribution amounts, investment order status, invested period, investment performances, accumulated rate of return, annualized rate of return, invested products list, invested amount to each products. • The special items that DB company often requests are mostly related to the trend of retirement pension market. For example, contents of the recent ERBSA change, solution of labor and management issues, Tax deduction relations. • We also offer other informative reports related to real estate investment and financial technologies, industrial trend. • Customized reports can be written in English.

  7. 1. Services and commitment to ○○○ B. Regular plan administration services • Participants educations

  8. 1. Services and commitment to ○○○ B. Regular plan administration services • Images of various education programs of KB <Open lecture : Q&A> <KB cyber education center> <Open lecture for the management> <KB retirement pension call center>

  9. 1. Services and commitment to ○○○ B. Regular plan administration services • If ○○○ select single plan administrator & Multiple asset custodians, how could KB support the structure?

  10. 1. Services and commitment to ○○○ C. Additional services • Retirement pension service fee discount • KB offers a discount on both plan administration and asset management fee for the first time among banks. • This benefits start from 2nd year of contract. • Some insurance companies offer a discount, but the discount applies just on plan administration fee and the benefits start from 3rd year of contract.

  11. 1. Services and commitment to ○○○ D. Additional services for ○○○ participants • Financial service

  12. 1. Services and commitment to ○○○ D. Additional services • Educational & Cultural service

  13. 1. Services and commitment to ○○○ D. Additional services • Personal life service

  14. 1. Services and commitment to ○○○ D. Additional services • Leisure service

  15. 2. Investment products & Supports A. Bankruptcy remoteness • DB assets are protected against the bankruptcy? • DB assets are belonged to the trust account which separated from the original account. This means creditors of bank cannot claim the right on DB assets. The trust law guarantee it. • So, DB assets are remote from bankruptcy. • Then why is the credit rating of bank important? • Even though DB assets are remote from bankruptcy, it doesn’t mean that they are free of product default risk. So the credit rating of custodian is important. • KB ‘s credit ratings are the highest among all financial institution of Korea. They are the same as Korean sovereign rating. • And the credit risk of asset management company is strictly monitored under the risk management system of KB. • Your vested right on retirement pension is guaranteed under the soundness and stability of KB Soundness and stability of KB

  16. 2. Investment products & Supports B. Suggested Investment strategies • Asset allocation suggestion (As of July 18, 2011) • In case of Option 1, all pension money are invested in KB time-deposit. The expected return of option 1 is the rate of 5-year KB wise time-deposit as of July 18, 2011. • On the efficient frontier, we select a few options for asset allocation as above. • When we compare each asset class, there’s no significant difference between time-deposit and bond. Both 3 year bond and 5 year bond are equally less preferred to time-deposit products (more risky and less profitable). • So, what we focus on in the next step, is only the portion of equity exposure. • Direct investment on stocks is not available, but indirect investment on stocks through fund products can be suggested. • We make product portfolio next page, satisfying the stock exposure of each options.

  17. 2. Investment products & Supports B. Suggested Investment strategies • Recommendation of Products (As of June 30,2011)

  18. 2. Investment products & Supports B. Suggested Investment strategies • Description of KB funds

  19. 2. Investment products & Supports B. Suggested Investment strategies • Description of other funds

  20. 2. Investment products & Supports B. Suggested Investment strategies • Descriptions of investment management organization

  21. 2. Investment products & Supports B. Suggested Investment strategies • Historical investment results for the portfolios and their benchmarks (As of June 30,2011)

  22. 2. Investment products & Supports C. Conditions attached to the investment products • Fees and penalties of recommended products

  23. 2. Investment products & Supports D. Monitoring the investment performance and providing guidance to maintain sound portfolio • Employer alert

  24. 2. Investment products & Supports D. Monitoring the investment performance and providing guidance to maintain sound portfolio • Regular counseling after implementation

  25. 2. Investment products & Supports D. Monitoring the investment performance and providing guidance to maintain sound portfolio • Automated investment tools such as rebalancing

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