Building pensions for the future What the Dutch can learn from other countries? Johan van Egmond

1. Building pensions for the futureWhat the Dutch can learn from other countries?Johan van Egmond European Pensions Netherlands Summit: Light at the end of the tunnel 11 November 2009

2. Agenda • Company pensions in crisis • Dealing with DB • Risk-sharing – learning from the Dutch • De-risking – learning from the UK • Total Retirement Outsourcing – learning from the US • Dealing with DC • Contributions – learning from the Australians • Investment behaviour – learning from the Germans • Education and communication – learning from the UK

3. Company pensions in crisis • DB as well as DC plans face severe times • Impact DB liabilities on balance sheets (IFRS accounting) • Coverage ratios DB plans below requirements • DC contributions (too) low • Asset growth in DC plans insufficient • Multinational organization faced with country differences, which poses additional challenges

4. CrisisUnderfunded pension funds in the US Liabilities Assets

5. Crisis Recovery times 410(k) account balances

6. Dealingwith DB Risk-sharing: learningfrom the Dutch Contributions Pay outs Investment Policy

7. Dealingwith DB De-risking: learningfrom the UK Sponsoring corporation Sponsoring corporation Buy-out Buy-in Buy in price Contribution Contribution Buy-out price Pension Fund Insurance Company Pension Fund Insurance Company Benefits Benefits Benefits Benefits Risks Active Pension Fund Members Active Pension Fund Members Passive Pension Fund Members Deferred Pension Fund Members Retired Pension Fund Members Retired Pension Fund Members

8. Dealing with DBTotel Retirement Outsourcing: Learning from the US

9. Dealing with DCContributions

10. Superannuation: learningfrom the Australian

11. Dealing with DCInvestment behaviour: learning from the Germans

12. Life cycle strategies / Hedging of risks: learning from DB Equities Life Cycle Money Market

13. Dealing with DCEducation: learning from the UK • ‘Good money sense needs to be as much part of people’s lives in the twenty first century as healthy eating and keeping fit.’ • ‘The UK requires a Money Guidance service that is ‘impartial and on the user’s side; available to all; preventative rather than just for those in crisis; supportive and coaching in style; and delivered in an environment not linked directly to a product sale.’ • From: Governmental working group Generic Financial Advice, chaired by Otto Thoresen (CEO AEGON UK), March 2008

14. Summary: dealing with DBFind the appropriate solutions Full Buy Out Full Longevity Risk Transfer Buy In Remove actuarial risk Index Based Mortality Swaps Inflation Overlays Cash Flow Matching Duration Overlays Open DB Plan Remove investment related risk

15. Summary: dealingwith DBPlanning yourway out of the financial crisis

16. Summary: dealing with DCFind the appropriate solutions • Building pensions for the future • Making “promises” you can keep • …save more auto enrolment, behavourial finance • …invest better life cycles, guarantees • …plan dissavings phase allignment saving and dissaving • …understand communication and education

17. AEGON Global Pensions • Whitepapers: • “Planning your way out of the financial crisis” (2009) • “Making promises you can keep – Building pensions for the future” (2009) • www.aegonglobalpensions.com • Global Pensions Solutions: • johan.vanegmond@aegon.com

18. Thank you This presentation contains general information only and does not constitute a solicitation or offer. No rights can be derived from this presentation. Please be advised that any fees, performance and/or cost indications in this presentation are for information purposes only. AEGON Global Pensions, its members and any of their affiliates or employees do not guarantee, warrant or represent the accuracy or completeness of the information contained in this presentation.