CBBA-Europe Annual Conference

Pan-European and cross-border solutions: Looking beyond the current EU turmoil

Brussels, 27th November 2018

CBBA-Europe: 2nd Annual Conference, Brussels, 27-28.11.2018

2nd Annual Conference

Pan-European and cross-border solutions: looking beyond the current EU turmol

Dr. Olga Ruf-FiedlerPresident CBBA-Europe

Pensions Leader EMEAI Dow Europe

2

Cross Border Benefits Alliance – Europe

CBBA-Europe is a growing EU advocacy federation created in October 2017and officially launched in December 2017, representing:

• Sponsoring Employers

• Benefits’ providers (pension funds, insurance companies)

• Financial industry (asset managers)

• Experts (lawyers, professors, actuaries, big consultancies)

• Employees' organizations (Unions)

• National and international associations or networks

CBBA-Europe supports all those stakeholders willing to create cross border pensionswithin the existing legal framework (Institutional/Advocacy support)….

….And CBBA-Europe is working for a better legislation: going beyond the existingframework and create the pan-European pensions of the future!

CBBA-Europe: 2nd Annual Conference, Brussels, 27-28.11.2018 3

2nd Annual CBBA Conference

• Two Days Program:• 1st day – devoted mainly to pensions, but also to social risks and insurance

topics, as well as to current political issues (EU turmoil)

• 2nd day – to cross border healthcare topics (rather in a seminar form)

• Variety of new topics in this year’s program is due to rapid growth of CBBA membership during the last year:

• Dec 2017: 4 members

• Nov 2018: 20 members!!!

CBBA-Europe: 2nd Annual Conference, Brussels, 27-28.11.2018 4

Cross Border Benefits Alliance – Europe (CBBA-Europe): current members

CBBA-Europe: 2nd Annual Conference, Brussels, 27-28.11.2018 5

Cross Border Benefits Alliance – Europe (CBBA-Europe): Scientific Council members coming from Universities of:

CBBA-Europe: 2nd Annual Conference, Brussels, 27-28.11.2018 6

CBBA - where are we today?• Reached the necessary critical mass on members to spread our ideas through recommendations,

reflection papers

• Now the focus will be on content, proposals delivery to decision makers and media, which will be presented & discussed publically

• Association is already well known to EU institutions

• speakers at our events from EIOPA, EU Parliament, EU Commission =>

Big Thank you to Brando Benifei and all of you who are here today!

• 3 people (affiliated to CBBA) just appointed as members of Occupational Pensions Stakeholder

Group of EIOPA: Francesco Briganti (Secretary General), Christian Lemaire (Amundi),

Prof. Hans van Meertens (Scientific Council)

• After this conference, several local event in different countries will follow

• Still a young organization, new applications are about to come!

CBBA-Europe: 2nd Annual Conference, Brussels, 27-28.11.2018 7

2nd Annual CBBA ConferenceThanks to...• more than 110 participants from major European countries (incl. 30 speakers)

• Thanks for all speakers and delegates!

• Impressive media coverage• Most prestigious magazines of our sector and by social media

Thanks to our media partners of today (IPE, European pensions, P&I, GBV and EU events)

CBBA-Europe: 2nd Annual Conference, Brussels, 27-28.11.2018 8

Many thanks to our sponsors• Amundi Retirement solutions • Generali Employee Benefits Network• Previnet• State Street Global Advisers• Cigna (meeting tomorrow)

Many Thanks to our supporters• PRI • CAIA

Warmest Thanks to the organizers• Francesco Briganti (Secretary General CBBA)• Amaia Bujan Otero (General manager CBBA)

CBBA-Europe: 2nd Annual Conference, Brussels, 27-28.11.2018

2nd Annual Conference

Good Start!

9

Agenda (I)

09:00 – 09:10

09:10 – 09:40

09:40 – 10:50

10:50 – 11:15

11:15 – 12:00

12:00 – 12:30

Opening speech

IORP 2 and cross-border pensions: Challenges and opportunities

Europe Quo Vadis?

Risks coverage promises and guarantees in a changed world: The insurance perspective on modern pensions

Pensions of the future: New design, new concept

Coffee break

Agenda (II)

12:30 – 13:30

13:30 – 14:40

14:40 – 15:25

15:25 – 15:50

15:50 – 16:45

16:45 – 17:00

Lunch break

Why does the EU need cross border pensions at company and sector-wide level?

What should be still done to create a “European (private) Pensions Union”?

Conclusions of the day

Long-term investors combining financial gains for pensions with common purpose

Coffee break

With the kind support of

Jacqueline Lommen Senior Pensions StrategistState Street Global Advisors

November 2018

For Professional Clients Use Only.All the information contained in this presentation is as of date indicated unless otherwise noted.

European Cross-border pension funds

Real-life examples

14

IORPPension institution

(financing / legal entity)

Regulated by (financial) regulation of the country of domicile of the pension institution

(“Home country”)

Pension plan Country A Pension plan

Country B

Pension plan Country C

Regulated by (social & labor, tax) law of the country of origin

of the pension scheme/plan (“Host countries”)

Source: Netspar / Lommen 2009The information contained above is for illustrative purposes only.

Cross-border pension fund (XB IORP)The basic concept

EIOPA – Market developments report 201780+ cross-border pension funds in place

15

Source: EIOPA

Two kind of cross-border IORPs:

1. Single employer

2. Multi-employer

Panel: multi-employer cross-border pension funds

Source: SSGA

Topic: Revised IORP Directive and EIOPA Budapest Protocol will further facilitate and foster cross-border occupational pensions

AmundiChristian Lemaire, Global Head of Retirement Solution

ePensionMichael Punzet, CEO

State StreetJacqueline Lommen, State Street, Senior Pensions Strategist (Moderator)

Panel: multi-employer cross-border pension funds

Source: SSGA

Key take-aways:

1. Multi-employer cross-border pension funds have become available, next to the existing single-employer IORPs

2. Servicing needs of as well large multinational companies with European franchise and SME (new opportunity)

3. Multi-employer IORPs pro-actively seeking innovations: • Technology (e.g. member and employer webportals) • Decumulation solutions (e.g. flexible pension benefits) • ESG investing (e.g EU LT sustainability agenda)

State Street Global Advisors Netherlands, Apollo Building, 7th floor Herikerbergweg 29 1101 CN Amsterdam, Netherlands. Telephone: 31 20 7181701. SSGA Netherlands is a branch office of State Street Global Advisors Limited. State Street Global Advisors Limited is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

This communication is directed at professional clients (this includes eligible counterparties as defined by the Netherlands Authority For the Financial Markets) who are deemed both knowledgeable and experienced in matters relating to investments. The products and services to which this communication relates are only available to such persons and persons of any other description (including retail clients) should not rely on this communication.

The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

Investing involves risk including the risk of loss of principal.

The views expressed in this material are the views of Jacqueline Lommen and are subject to change based on market and other conditions. This document contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

The information provided does not constitute investment advice as such term is defined under the Markets in Financial Instruments Directive (2004/39/EC) and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell any investment. It does not take into account any investor's or potential investor’s particular investment objectives, strategies, tax status, risk appetite or investment horizon. If you require investment advice you should consult your tax and financial or other professional advisor. All material has been obtained from sources believed to be reliable. There is no representation or warranty as to the accuracy of the information and State Street shall have no liability for decisions based on such information.

The information contained in this communication is not a research recommendation or ‘investment research’ and is classified as a ‘Marketing Communication’ in accordance with the European Communities (Markets in Financial Instruments) Regulations 2007. This means that this marketing communication (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research (b) is not subject to any prohibition on dealing ahead of the dissemination of investment research.

© 2018 State Street Corporation — All Rights Reserved.

Web: www.ssga.com

18

Important Disclosures

With the kind support of

Amundi Retirement SolutionsPan-European and cross border pensions

Challenges and Opportunities

Annual Conference 27 Nov 2018

Amundi, a large European player in Employee Savings & Retirement

21

servicing international groups for a long time

Source: Amundi ESR figures as of June 2018

Key figures

Administrative management expertise2 fully owned operating entities:

⎯ Amundi Tenue de Comptes (TC) in France

⎯ Amundi global servicing in Luxemburg

A wide international expertise

120 countries

(1) In France, AFG, as of Dec 2017

N°1in employee savings

and retirment 1

4M Employee

accounts

+100k Client

companies

500k Employee clients

outside France

+58Bn€ Assets under

management

50years of

experience

Retirement Solutions – Nov 2018

Amundi Pension Fund (APF)

Pan-European multi unrelated employer pension funds are operational

A Pension Fund approved by the CSSF (Luxembourg)

⎯ 9 country compartments up and running with clients

⎯ Plan to open another country in 2019

⎯ 1 world compartment (for members employed outside

Europe)

A compartment by country

⎯ approved by the local authority

⎯ fully compliant with the local regulation

Each compartment regulation includes

⎯ the general framework and legal requirements of each

country

⎯ the scheme’s governance of each plan on boarded in APF

(in the “Sub Pension Rules”)

22

Amundi Pension Fund, the 1st up and running in 9 European countries

Germany

Belgium

Spain

Italy

Luxembourg

Netherlands

United-Kingdom

Portugal

Ireland

World

Retirement Solutions – Nov 2018

Pensions: innovation is key

23

1 Cross border ⎯ IORP 2 + revised Budapest protocol + PEPP

should foster their development

⎯ stay multi local to well adress specific needs of

each country

2 Pension plan

design

⎯ design solutions for the decumulation phase (e.g.

extend Life Cycle Strategies beyond retirement

date, propose targeted incomes, etc)

⎯ include ESG criteria, real assets and impact

investing (in particular for millennials)

3 Digital tools ⎯ Offer robo- advisor, tutorial short videos designed

for smart phones

⎯(in 9 months, 17.000 savers adopted our robo-

advisor to manage € 125 million)

Retirement Solutions – Nov 2018

24

Amundi

Amundi - French joint stock company (Société Anonyme) with a capital stock of € 1 086 262 605

Portfolio management company approved by the French Financial Markets Authority (Autorité des Marchés Financiers) - under no.GP 04000036

Head office: 90, boulevard Pasteur, 75015 Paris - France.

Siren no. 437 574 452 RCS Paris

Disclaimer

⎯ Issued by Amundi, French joint stock company (“Société Anonyme”) with a registered capital of Euro 1 086 262 605 and approved by the French Securities Regulator (Autorité

des Marchés Financiers-AMF) under number GP 04000036 as a portfolio management company, 90 boulevard Pasteur -75015 Paris-France – 437 574 452 RCS Paris.

⎯ This material is solely for the attention of institutional, professional, qualified or sophisticated investors and distributors. It is not to be distributed to the general public, private

customers or retail investors in any jurisdiction whatsoever nor to “US Persons”.

⎯ Moreover, any such investor should be, in the European Union, a “Professional” investor as defined in Directive 2004/39/EC dated 21 April 2004 on markets in financial

instruments (“MIFID”) or as the case may be in each local regulations and, as far as the offering in Switzerland is concerned, a “Qualified Investor” within the meaning of the

provisions of the Swiss Collective Investment Schemes Ordinance of 23 June 2006 (CISA), the Swiss Collective Investment Schemes Ordinance of 22 November 2006 (CISO)

and the FINMA’s Circular 08/8 on Public Offering within the meaning of the legislation on Collective Investment Schemes of 20 November 2008. In no event may this material

be distributed in the European Union to non “Professional” investors as defined in the MIFID or in each local regulation, or in Switzerland to investors who do not comply with

the definition of “qualified investors” as defined in the applicable legislation and regulation.

⎯ This material is provided for information purposes only and does not constitute a recommendation, a solicitation, an offer, an advice or an invitation to purchase or sell any

fund, SICAV, sub-fund, (“the Funds”) and should in no case be interpreted as such.

⎯ Not all sub-funds or share classes of the Funds will necessarily be registered or authorized for sale in all jurisdictions or be available to all investors.

⎯ Subscriptions in the Funds will only be accepted on the basis of the Funds ’s latest complete and simplified prospectuses, its latest annual and semi-annual reports and its

articles of incorporation that may be obtained, free of charge, at the registered office of the SICAV or respectively at that of the representative agent duly authorized and

agreed by the relevant authority of each relevant concerned jurisdiction.

⎯ Consideration should be given to whether the risks attached to an investment in the Funds are suitable for prospective investors who should ensure that they fully understand

the contents of this document. A professional advisor should be consulted to determine whether an investment in the Funds is suitable.

⎯ The value of, and any income from, an investment in the Funds can decrease as well as increase. The Funds have no guaranteed performance. Further, past performance is

not a guarantee or a reliable indicator for current or future performance and returns. The performance data do not take account of the commissions and costs incurred on the

issue and redemption of units.

⎯ This document does not constitute an offer to buy nor a solicitation to sell in any country where it might be considered as unlawful, nor does it constitute public advertising or

investment advice.

⎯ The information contained in this document is deemed accurate as at December 15, 2017 or a the other date mentionned.

Retirement Solutions – Sept 2018

With the kind support of

ePension

“your innovative company pension solution for the European Union”

Member of

Who we aretypically Swiss – a plus for our clients

associated companies for occupational retirement solutions

technical and commercial administrationand Asset Management

sales, support, local representation and product development

27

About ePensionOur mission

• ePension offers both standardized and customized cross-border solutions in thearea of occupational retirement provision in line with EU Directive 2003/41.

• ePension is accessible for all employers and employees in the EU and offersuniform pension solutions in line with national social and labor law requirements.

• Compartments can be used for ‘multi-employer’ pension plans or for differentinvestment strategies and pension plans/pension compartments.

→ Comprehensive offer of benefits for companies of all sizes:− Old age benefits in form of lump-sum payment and/or life annuity

− Benefits in the event of disability to work and contribution exemption

− Optional additional death-capital

− Optional care allowance

− Benefits to surviving dependants

28

visit us on www.epension.com

With the kind support of

1. Where are we with Brexit, and how do we come to be there?2. Where does that leave the UK pensions industry?3. What about regulation in pensions?

Cross Border Benefits Alliance Europe Brussels:

27 November 2018

1. Sterling2. FTSE 1003. FTSE 250 and small cap4. Credit5. UK property6. Gilt yields7. Inflation

1. % age VAT on pension costs2. Domicile of investment funds3. IORP II4. Cross border schemes5. Pension Protection Fund rules: UK pension industry lifeboat6. TUPE: Transfer of Undertakings (Protection of Employment) Regulations 19817. Unisex annuities8. GMP equalisation: Guaranteed Minimum Pension

With the kind support of

Cross Border Benefits Alliance (CBBA) Europe

2nd Annual CBBA Europe Summit | November 27 2018

Europe ‘After Brexit’ : Where Are We Headed?

these PowerPoint slides

are not for circulation

Europe ‘After Brexit’ : Where Are Really We Headed?

I. We Know What Has Ended… Predictions Are Difficult “Esp. About the Future”!

II. The Age of Geoeconomic Ultra-Realism: from Tuco Ramirez to Buenos Aires A New Yalta, Without Russia…. and Without the European Union Either

III. Holding the Rope Tight: Who Really Owns Europe ? . . .

37

I. We Know What Has Ended… Predictions Are Difficult “Esp. About the Future”!

▪ Neoliberalism 1980 – 2016: Wave the Magic Wand of Open Markets/Borders

➢ Glass–Steagall: the City of London as ‘Wall Street Beachhead’ in Europe 📉👎 Paris, Frankfurt, Zurich

➢ Don Regan: Harvard, Merrill Lynch, White House 1981-1987 => UK (Thatcher), EU (Delors), China (DX)

➢ Nicholas Brady: Harvard, Morgan Stanley (DR), White House 1987-1988 => Latin America, Poland/CEE

➢ Great Financial Crisis 2008 – 2018: “QE”/Fin. Repression and the Shrinking European Middle-Class

▪ The Slow Death of ‘Neoliberal Globalization’ 2016 – 2020/2021

➢ Brexit, Trump and the Austro-Hungarian Domino Effect

➢ How long? will this painful transition last? Predictions Are Difficult “Esp. About the Future”!

➢ Intelligent Asset Owners: Pension Funds, SWFs, Central Banks using Extra-Financial Metrics

➢ Paradox? = ESG/SDG “Idealism” and Cold Geoeconomic “cynicism” are the order of the day

➢ Geo-economics has some of the answer: We All Live in Geoeconomic Times

38

II: The Age of Geoeconomic Ultra-Realism: “Who Holds the Rope” ?

39

III. Who Owns Europe? EU Asset Owners in Global Perspective

With the kind support of

New Strategies for Decumulation

Marie BrièreAmundi, Paris Dauphine University, Université Libre de Bruxelles

marie.briere@amundi.com

Cross Border Benefit Alliance-Europe Annual Conference – Brussels, Nov 2018

Funded Retirement Systems Face Sustainability Issues

EIOPA estimation of excess of assets over liabilities

in baseline scenario, % liabilities

42 Source: EIOPA (2017)

The Trend Towards Pension Individualization

⎯ Use of individual accounts (Hungary, Slovak Republic)

⎯ Reforms to eliminate the guarantees (notional DC, collective DC)

⎯ Switch from DB to DC (US, UK, Switzerland)

43

⎯ Effective risk-sharing mechanisms

⎯ Intergenerational risks for investment and longevity

⎯ Risk sharing between employer and employees through renegociation of contracts

⎯ But hard commitments and sustainabilityissues

⎯ Flexibility to adapt products to preferences

of heterogeneous individuals

⎯ But greater risks for individuals

⎯ Investment risk, conversion into an annuity

⎯ Longevity risk if individual decumulation

⎯ Insurance company’s default risk if

annuitization

Collective Systems Individualized Systems

Two Polar Solutions Offered for the Decumulation

⎯ Provides guaranteed income and insurance against longevity risk

⎯ Allows to benefit from the mortality credit (people dying ealier leave their capital to the pool)

⎯ BUT

⎯ Protection comes at the cost of relatively low income at retirement

⎯ Lack of flexibility – annuity irreversible:

No possibility to leave bequest to your heirs, to recover capital in case of unforeseenexpenses in retirement

⎯ Insurance company’s default risk

44

Annuities

Two Polar Solutions Offered for the Decumulation

⎯ Little appetite for life annuities (« Annuity puzzle”)

⎯ Ex: Australia or UK, introduction of « Pension Freedom » removing mandatory conversion

45 Source: Cannon et al. (2016)

Two Polar Solutions Offered for the Decumulation

⎯ Offers to gradually withdraw your capital during retirement

⎯ Often preferred, flexible

⎯ Allows to bequeath capital

⎯ Continue to invest in risky assets

⎯ BUT

⎯ Risk of exhausting capital before death

46

Drawdown Strategies

The Ideal Decumulation Solution?

⎯ Most individual situations combine 3 main objectives:

47

▪ U-shape: high in early

and late retirement

Transfer capital to

bequest

Cope with liquidity

needs

Secure essential

consumption needs

▪ Exceptional, unforseen

expenses▪ Residual wealth

The Ideal Decumulation Solution?

⎯ Needs are very different depending on the individual situation:

⎯ Age

⎯ Gender (women live longer, lower resources)

⎯ Marital status (couples benefit from a partial longevity hedge)

⎯ Family situation (bequest to children)

⎯ Coverage / guarantees in pillars 1/ 2 of pension systems, etc.

⎯ Risk aversion, loss aversion, etc.

48

The Ideal Decumulation Solution?

⎯ The optimal strategy combines different bricks according to the needs of each

49

Investment product

Continue investing in risky assets

Keep flexibility for liquidity needs or willingness to bequest

Deferred annuity

Secure consumption

needs in late life

Gradual annuitization strategy

Maintain flexibility with respect to the portion of

assets blocked

Adapt the timing of the conversion to the market

situation

+

OR

65 85

The Ideal Decumulation Solution?

⎯ We need more than fixed immediate annuities

⎯ Limited value of immediate annuitization (mortality credit is small in early retirement)

BUT

▪ No inflation protection

▪ No capacity to earn equity risk premium

▪ Expensive in current economic environment

50

▪ Payments indexed on

an inflation index

Variable annuitiesFixed annuities Inflation-indexed

annuities

▪ Pays a fixed nominal

rate

▪ Payments indexed on

the value of a chosen

invesment portfolio

Deferred annuities

Going one Step Further…

⎯ Annuitization: insurance companies will have to bear heavy longevity exposure in their

balance sheet

⎯ Longevity risk

⁃ Systematic (risk of misestimating the probability of future survival)

⁃ Idiosyncratic (risk that the individual’s date of death is different from expected, given known

probability of survival)

51

Number of individuals in the pool

Group Self-Annuitization Contracts

⎯ Offer to pool idiosyncratic risk, but systematic risk born by individuals

⎯ Entitlements are adjusted each year by the funding ratio (depending on longevity evolutions), to

determine the benefits paid-out

⎯ Under realistic hypotheses about the insurance companies’ default risk, individuals

should prefer GSA contracts

Source: Boon, Brière and Werker (2017)52

MFR

𝐹𝑅𝑡Increasing life

expectancy

Benefits

<

Entitlement

Stable life

expectancy

Benefits

=

Entitlement

Decreasing life

expectancy

Benefits

>Entitlement

Conclusion

⎯ We live longer, we keep having projects in retirement

⎯ Retirement should be seen as an active investment phase

⎯ We are all different

⎯ Customization is key

⎯ Decumulation strategies should combine different bricks (investment solution,

annuity) according to individual’s needs

⎯ Retirement decisions are complex

⎯ Fiscal rules, uncertainty about first pillar pension replacement rate

⎯ Advice, pension simulators, nudging, financial education through online tools, robo-

advice etc. can help

53

Boon L.N., Brière M. and Werker B.,

« Systematic Longevity Risk: To Bear or to

Insure? », Amundi Working Paper, 2017.

Also available on SSRN:

https://papers.ssrn.com/sol3/papers.cfm?abstr

act_id=2926902

and Amundi Research Center

research-center.amundi.com

54

Further Readings

55

⎯ MENTIONS LEGALES

Société Anonyme au capital social de 1 086 262 605 euros

Société de Gestion de Portefeuille agréée par l'AMF sous le n° GP 04000036

Siège social : 90, boulevard Pasteur - 75015 Paris - France

Adresse postale : 90, boulevard Pasteur CS21564 - 75730 Paris Cedex 15 - France

Tél. +33 (0)1 76 33 30 30

Siren : 437 574 452 RCS Paris

Siret : 43757445200029

Code APE : 6630 Z

N° Identification TVA : FR58437574452

With the kind support of

City

Department:

Country:

Risk Coverage promises and guarantees in a changed world:The insurance perspective on modern pensions

• Ian Veitch, Global Head of Corporate Life & Pensions, Zurich

• Paolo Lippi, Generali Employee Benefits Network, Pension Development

Manager

Moderator: Randy DeFrehn, Former Director of the US National Coordinating

Committee for Multiemployer Plans

27 November 2018 CBBA Europe Annual Conference

City

Corporate pension products in Europe are normally

divided into 3 main categories with no clear pattern

Source: OECD

Corporate

pension

products

DB plans

DC plans

with

guarantee

DC plans

without

guarantee

Description

Employer guarantees

lifelong annuity

payments equal to a

portion of the average

salary earned by the

employee over a

defined period of time

Contributions are

accumulated over

time and invested in

financial assets.

Assets capitalize a

return (either

technical interest or

market performance –

either guaranteed or

not) and at retirement

age they are either

converted into

annuities or paid in a

lump sum.

DB

DC with guarantee

DC without guarantee

Prevalence of specific categories

Source: OECD

Liability and

financial risk

holder

Employer is legally liable

for the provision, hence

he holds the financial

risks.

The money that is in the

pension plan is owned

by the employer.

Employer’s and

employee’s contributions

are paid into a plan and

are owned by the

employee from the

beginning.

The employee holds the

financial risk, hence it is up

to him to decide the asset

allocation if allowed by law

or by the contract.

When present, the

guarantee is often provided

through insurance

segregated accounts.

CBBA Europe Annual Conference27 November 2018

City

Thank You.

Contacts:

lippi@geb.com

D +32 2 535 71 49

www.geb.com

Paolo Lippi - Pension Development Manager

Generali Employee Benefits – International Lines

59

Generali Employee Benefits

With the kind support of

ENI Rationalization Program Pension Plans in Europe

CBBA- Europe Annual Conference 2018

Brussels 27 November 2018

Eni: company profile

America:7 Countries1.292 employees

Europe:28 Countries25.730 employees

Africa:15 Countries3.380 employees

Asia e Oceania:21 Countries2.532 employees

Capitalisation: 50 BN/euro

Net sales: 66,9 BN/euro

Employees 2017: 33.000

Operating Profit: 3,4 BN/euro

"We are an energy company. We are working to build a future where everyone can access energy resources efficiently andsustainably. Our work is based on passion and innovation, on our unique strengths and skills, on the quality of our people and inrecognising that diversity across all aspects of our operations and organisation is something to be cherished. We believe in thevalue of long term partnerships with the countries and communities where we operate."

62

Eni Pension Plans in Europe

STRATEGY 2015 - 2021SITUATION 2014

63

1. Single provider with plan assets physically combined

2. Single provider without combining plan assets

3. Different providers but same investment funds

4. Different investment funds but same investment strategy and asset allocation

5. Pan European Plan (IORP II)

STRATEGY 2015 - 2021 INTEGRATION

64

▪ Reduce Pension Plan Risk: no defined benefit schemes

• No new DB Plans

• Closure to future service DB accrual (replaced with DC): stops the systematic build-up of new risks (financial and demographic)

• Conversion of past service DB liabilities with DC: eliminates significant accumulated risks for the company

▪ Rationalise Pension Plans: one unique DC plan (provider) in each country

• Actively seek best terms and costs from providers – savings for business and employees

• Assure coherence with total reward and market practice and individual retirement targets

• Strengthen employer branding and the capacity in attracting and retaining employees

• Facilitate hr management processes (time burden, administration, communication …)

• Access to best investment, portability, transparency

▪ Governance

• Regular proactive governance committees with ENI and local management

• Ensure clear monitoring and continuous improvement

• Aim for standardised reporting templates – combine local best practices

• Develop local competencies

• Enhance pension benefit communication

Eni pensions plans: 3 key focus areas

64

Rationalization Program Pension Plans Europe: 4-step approach process

65

UK: high-level example

To make recommendations to the Company/ies on the following matters:

▪ market and macro-economic and legislative update;

▪ administration activities

▪ investment practices, to include performance, suitability of fund ranges and the default investment strategy

▪ member costs charges

▪ members’ retirement choices

▪ members education and communications

▪ pension providers' performance against legislative and internally defined service standards

▪ suitability of the existing providers

Composition

Secretary

Eni Pension Governance Committee (PGC)

Responsability Annual Report (standard)

Chairman

HR local managers

Subsidiary

ADVISOR PROVIDER

Support Functions

Compensation& Benefits

Insurance

Finance

Secretary

66

Eni pension plans in Europe: activity 2015 - 2018

▪ 4.000 employees enrolled

▪ 28 mln € annual company contribution

▪ 6 Pension GovernanceCommittee (UK, NL, FR, DE, CH, AT)

4

4

▪ 10 DB plans «closed» ( 8 «frozen» , 2 transferred to DC)

▪ 15 DC plans closed

▪ 3 Pension Governance Committee

(UK, NL, CH)

ACTIVITY 2015 - 2018

HIGHLIGHT 2019

▪ 6 mln € ongoing saving from contribution review

▪ 9 mln € one-off from DB pastservices liabilities reduction

1

1

1

1 1

1

1

11

1

International plan

67

Eni Pension Plans WW

▪ GHANA new PP - Start up

▪ ANGOLA new PP - Implementation

▪ CONGO new PP- Feasibility

▪ USA Rationalization – As Is

Eni Pension Plans in Europe: Life Cycle asset allocation and investment return

2017

2016

68

Eni Pension Plans in Europe: 2021 … Operative and financial integration

69

1: Single provider + combined assets

2: Single provider + separate assets

3: Separate providers + same investment funds

4: Different investment funds same investment strategy and asset

Eni Pension Plans in Europe: 2021 … evaluating each option

Challenges Many Plans;

one provider;

pooled assets

Many Plans;

one provider;

no pooling

Many Plans;

multi providers;

same funds

Many Plans;

multi providers;

same strategies

Single multi-country

IORP

Local legal complianceIs the provider

authorised, etc.

Is the provider

authorised, etc.

Are the provider

authorised, etc.

Cross border approval

needed

Local admin compliance Local expertise? Local expertise? Hire local experts

'Look and feel' of platform

Member Options Central Control Central Control Harder to control Harder to control Central control

Member Communications All languages? All languages? All languages?

Admin costs

Investments quality Single provider funds Single provider fundsDepends on local

providers

Depends on local

providersGlobal "best in class"

Investments costs

Other costs (comms, etc)

Managment info Plan level? Plan level?

Governance & Control

Speed of implementationMaybe quick for 'core'

countries

Maybe quick for 'core'

countries

70

▪ Administratione and Investment Cost saving

▪ Better Governance e Compliance

▪ More effective from compensationperspective

▪ Facilitate employeesmobility within Europe

Eni Pension Plans in Europe: 2021 … Option 5

71

With the kind support of

Cross Border Benefits Alliance Conference Martino Braico – martino.braico@previnet.it

Cross Border Pensions

ARE CROSS BORDER PENSIONSA GOOD IDEA?

ARE CROSS BORDER PENSIONS EASY TO MANAGE?

ARE CROSS BORDER PENSIONS FOR ALL?

ARE CROSS BORDER PENSIONS POSSIBLE?

…

Tax SSL

APP

Central Reporting

Authorities

Languages

Currencies

Local best practices Member communications

E-learning

Projections

With the kind support of

Andy Agathangelou, Founding Chair, Transparency Task Force

27th November 2018, CBBA Conference, Hotel Leopold, Brussels

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

About

• We are the collaborative, campaigning community, dedicated to driving up the levels of transparency in financial services, right around the world

• We believe that higher levels of transparency are a pre-requisite for fairer, safer, more stable and more efficient markets that will deliver better value for money and better outcomes

• Furthermore, because of the correlation between transparency, truthfulness and trustworthiness, we expect our work will help to repair the reputational damage the sector has been suffering for decades

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

About mission

• We believe the financial ecosystem is profoundly important to the wellbeing of society, the global economy and political stability; but there’s a great deal wrong with it that needs fixing

• Our mission: “To help Fix Financial Services by harnessing the transformational power of transparency”

• That begs the question “what needs fixing?”

• Hidden costs and risks

• Opportunistic opacity

• Opportunistic obfuscation

• Opportunistic complexity

• The Engagement Deficit

• The Understanding Deficit

• Short-termism

• Insufficient client-centricity

• Damaging incentive structures

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

What is

• Asymmetries of information

• Regulatory capture (USA?)

• Scams and scandals

• A ‘profit before principle’ mindset

• Routine reputational damage

• Conflicts of interest

• Financial instability

• Malpractice; lack of market integrity

• Miss-selling

➢ The Trust Deficit

helping to fix?

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

Key insights from the 2018 Edelman Trust Barometer

• An annual global study in its 18th year; 28 countries; 33,000 respondents

• The Financial services sector scores a very poor 15th out of 15 (i.e. last) in terms of general levels of trustworthiness

The Top 5 Factors decreasing trust in financial services companies:

• #5 Difficulty addressing problems

• #4 Not responsive

• #3 Unwanted selling

➢ #2 Confusing products/services

➢ #1 No product/cost transparency

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

What must we do to help rebuild trust?

• It is vital that the financial services sector is always seen to behave in a transparent, truthful and trustworthy way

• Therefore, we cannot afford to jeopardise the potential success of the PEPP by failing to be accurate and complete in how we describe it

• We must build the PEPP on solid foundations - it must be a product of high integrity

➢ The PEPP will help to either rebuild or undermine trust; it is our choice

➢ In particular, we must clearly, fairly and transparently report costs, performance and risks

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

The Transparency Task Force are proud to

be members of CBBA; and we are also proud to be an Associate Member of

Better Finance…

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

What must we do to help rebuild trust?

➢ If there is any risk that people may misunderstand the way the PEPP’s “capital protection” works we must take action

➢ We must educate them to fully mitigate the risk of any misunderstanding; anything less would be a high risk, foolish approach

➢ Or better still, we should make “capital protection” worthy of the term by properly accounting for costs and inflation

➢ Perhaps it is not too late for the MEPs to change their mind?

➢ It would be wiser and safer to have no “capital protection” at all than to have it without sufficient explanation of what it really means

85

A Research Report by BETTER FINANCE

Long Term & Pension Savings:

The Real Return - 2018 Edition

Another country, another story...

CO

NFI

DEN

TIA

L -

DO

NO

T C

OP

Y

86

-1.36

-0.82

-0.38

-0.11

0.05

0.10

0.33

0.50

0.62

0.70

0.79

0.81

0.83

1.16

1.21

1.30

1.41

1.54

1.60

1.63

1.67

1.70

1.87

1.90

1.90

1.90

1.90

2.19

2.50

2.76

2.85

3.10

4.27

4.96

5.70

9.00

-2.00 0.00 2.00 4.00 6.00 8.00 10.00

France Public Employee Pension, 2002-2017

France Life Insurance, Unit-linked, 2000-2017

Latvia State Funded Pension Funds, 2003-2017

The Netherlands Life Insurance, 2000 - 2017

Spain Pension funds (weighted average), 2000-2016

Italy Open Pension Funds, 2000-2017

Estonia Mandatory Pension Funds, 2003-2017

Bulgaria Voluntary Pension Funds, 2004-2017

Slovakia Pillar II Pension Funds, 2005-2017

Italy PIP Unit-Linked, 2008-2017

Slovakia Supplementary Pension Funds, 2009-2017

France Corporate savings plans, 2000-2017

Lithuania Supplementary pensions, 2004-2017

Lithuania Occupational pensions, 2004-2017

Estonia Supplementary Pension Funds, 2003-2017

Italy PIP With Profits, 2008-2017

Italy Closed Pension Funds, 2000-2017

Germany Riester Pension Insurance, 2005-2017

Belgium Life Insurance (Branch 23), 2005-2014

Germany Rürup Pension Insurance, 2005-2017

Bulgaria Universal Pension Funds, 2002-2017

Bulgaria Professional pension funds, 2001-2017

Latvia Voluntary Private Pension, 2011-2017

Belgium Occupational Pension Plans (IORP [1]), 2000-2017

Belgium Pension Savings Funds, 2000-2017

Belgium Life Insurance (Branch 21), 2002-2014

France Life Insurance, Capital guaranteed, 2000-2017

Germany Pensionskassen and Pension Funds, 2002-2015

Belgium “Assurance Groupe” (Branch 21), 2002-2014

Romania Voluntary Pension Funds, 2007-2017

The Netherlands Pension Funds, 2000 - 2017

United Kingdom Pension Funds, 2000-2017

Poland Employee Pension Funds, 2002-2017

Romania Pillar II Funded Pensions, 2008-2017

Sweden AP7 Occupational pension fund, own choice of other fund or funds 2000-2014

Sweden AP7 Occupational pension fund, default option 2000-2016

Annualized Real Net Performance

Fees are going down ... SlowlyYear 2017 was a good year ... Not for everyone

CO

NFI

DEN

TIA

L -

DO

NO

T C

OP

Y

87ES

ITLV

FR

IT LVLT

ES

LTIT

FR

SK

IT

SKRO

PL

ES

BE

BG

BG

BG

RO

ES

BEBENL

DE

PL

DE

BE

DK

UK

SE

SE

SESE

DK

SE

SE

SESESE

SE

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00

Rea

lNet

Per

form

ance

Real Gross Performance

This is how much I pay to get my

return

Still two different groups ...

CO

NFI

DEN

TIA

L -

DO

NO

T C

OP

Y

88

ESIT

LVFR

ITLVLT

ES

LTIT

FR

SKIT

SKRO

PL

ES

BE

BGBG

BG

RO

ES

BEBENL

DE

PL

DE

BE

DK

UK

SE

SE

SESE

DK

SE

SE

SESESE

SE

-2.00

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50

Rea

lNet

Per

form

ance

Total Cost Ratio

The more You pay, themore You get....

Not in this world!

Getting enough „music“ for our „money“?

CO

NFI

DEN

TIA

L -

DO

NO

T C

OP

Y

89

0 10 20 30 40 50 60 70 80 90

ES-Mandatory pension funds

IT-PIP with-profits

LV-State Funded Pensions Pension funds

FR-Life insurance contracts – capital guaranteed

IT-PIP unit-linked

LV-Voluntary private pensions Pension funds

LT-Funded pension Pension funds

ES-Pillar III pension funds

LT-Voluntary private pensions Pension funds

IT-Open funds

FR-Life insurance contracts – unit-linked

SK-Pillar II pension funds

IT-Closed funds

SK-Pillar III pension funds

RO-Voluntary pension funds

PL-IKZE - voluntary pension funds

ES-Supplementary pension funds

BE-Pension funds

BG-Universal Pension Funds

BG-Professional Pension Funds

BG-Voluntary Pension Funds

RO-Mandatory pension funds

ES-Pillar II pension funds

BE-Assurance Groupe

BE-Branch 21

NL-Pension funds

DE-Life insurance

PL-Employee Pension Programmes

DE-Pensionskassen and pension funds

BE-Branch 23

DK-Private pension schemes (DC with guarantee)

UK-Pension funds

SE- PA 03 & PA 16 Unit-linked life insurance

SE-KAP-KL Unit-linked life insurance

SE-PP - other funds

SE-ITP 1 Unit-linked life insurance

DK-Private pension schemes (DC with no guarantee)

SE-ITP 1 Traditional life insurance

SE-SAF LO Unit-linked life insurance

SE- PA 03 & PA 16 Traditional life insurance

SE-KAP-KL Traditional life insurance

SE-SAF LO Traditional life insurance

SE-PP - default

"How much I get for 1 unit of costs?"

90

The full version of the Report is available for

download at www.betterfinance.eu

andy.agathangelou@transparencytaskforce.orgMobile: +44 (0)7501 460308

What is the significance for the PEPP?

• There is a wonderful opportunity for the better scale, efficiency, governance and cost management to drive real benefits to pension savers, especially in the many countries with less successful pension products

➢ However; it is vital that we avoid undermining the inherent potential advantages of the PEPP by failing to communicate “capital protection” properly

With the kind support of

CBBA Conference

Setting up a Cross-border Pension Fund

27 November 2018

94Aon | International Retirement and Investment | November 2018

Variety of pension vehicles in Europe

Several options for execution DB and DC plans

Own local

pension fund

for DB/DC-plans

Local

multi-employer

plan

Insured plan

Own cross-border

pension

arrangement

(IORP)

(Voluntary)

industry-wide plan

(multi-employer)

Multi-employer Multi-

country Cross-border

pension arrangement

(multi-IORP)

SEVERAL OPTIONS

Local solutions can vary

from country to country

95Aon | International Retirement and Investment | November 2018

Cross-border pension vehicle

Determined by the social and labor law of the country where

employees are located (“Host countries”)

Regulated by the country of domicile of the

pension institution (“Home country”)

Home Country (Belgium)

Regulation and Plan management Benefits and Plan design

Host Country NL Host Country BE Host Country IRE

Cross-border

pension vehicle

Financing vehicle

and legal entity

Benefits

Country

NL

Benefits

Country

BE

Benefits

Country

IRE

96Aon | International Retirement and Investment | November 2018

COMMENTS & CHALLENGES (1)

• Cross border pension funds

• First cross border funds for DB plans, including risk benefits

• Last years, more interest for centralising DC plans

• Own cross border vehicle or mutli-employer cross border solutions

• Centralizing pensions schemes across Europe into a single pension fund is currently on

the agenda of many multinational companies.

• significant economies of scale.

• control and oversight over the countries and plan.

• reduces local management time

• competitive premium rates for death and disability benefits

• contact with a single regulator and centralized reporting

• consistent communication

97Aon | International Retirement and Investment | November 2018

COMMENTS & CHALLENGES (2)

• Starting the project

• Budget, time, resources

• Training

• Business case

• Implementation

• Compliance with social and labour law

• Operational implementation

• Legal implementation - Cross border approvals

• Stakeholder Management

• Local management

• Works councils, unions, current board/trustees

• Members

❖ New challenges: IORPII implementation – approval members (e.g. NL proposal)

98Aon | International Retirement and Investment | November 2018

Example stakeholders

Pension

fund

Pension fund

BoardAdvisorEmployer Advisor

Work Council Advisor(s)Advisor

Special

interest group

Great

idea

Advisor(s)

Accountability

body

Members

With the kind support of

CBBA-EUROPE ANNUAL CONFERENCE

What should still be done to create a

‘European’ (private) pensions Union?

Chiara SandonSenior Policy Advisor, EFAMA

Brussel - 27 November 2018

EFAMA: the representative association for the European

Investment management industry

28 Countries:

24 EU Members, and

Liechtenstein

Norway

Switzerland

Turkey

62 Corporate Members

24 Associate Members

➔ Investment Management:

EUR 25 trillion in AuM of which

EUR 15.6 trillion managed by

60,174 investment funds (end Q4

2017)

EFAMA LAND

101

27 November 2018CBBA - Brussels

102

Current landscape

for providers

Different national product rules

Barriers to entry/Limited competition

High production cost

High-cost distribution channels

Uneven product quality

Limited product choice

High cost/

low return

No portability

Current landscape

for consumers

The Pan European Personal Pension product

The context

27 November 2018CBBA - Brussels

A fragmented market for personal pensions

103

Benefits

for providers

One EU product regulation

Access to national markets

Economies of scale

Low-cost distribution channels

High-quality product

Increased product choice

Lower cost/higher

return

Portability

Benefits

for consumers

Benefits for the EU economy

Increase retirement

savings

Foster capital & people mobility

Strengthen the CMU

Build an EU identity

PEPP – the value Is it the ‘silver bullet’?

27 November 2018CBBA - Brussels

There are certainly significant benefits

104

The idea is not harmonize the existing national

regimes for PPPs

PEPP – the scope No harmonization of existing personal pension products (PPPs)

27 November 2018CBBA - Brussels

To create a product that could be offered in

addition to existing PPPsBUT

PEPP – the scope A product regulation coexisting with some national rules

105

Investment

choice

Payout

solutions

Risk

coverage

Product standardization

Product governance

Product disclosure

EU Regulation

Compliance with some national rules to get tax

benefits

Flexibility in PEPP Regulation needed

27 November 2018CBBA - Brussels

Taxation & DecumulationThe way forward

106

The ‘elephant in the room’

✓ Uncertain tax incentives granted to the PEPP

✓ Different tax rules and tax reporting requirements

✓ Decumulation options are closely linked to the tax treatment of the product

Cut the elephant into pieces

✓ A flexible approach is needed.

Make the PEPP great for everyone

✓ Give PEPPs the same tax relief as granted to national PPPs

✓ National specificities for pay-out provisions to be maintained

✓ A move towards an EU-wide tax regime for the PEPP would simplify the landscape

27 November 2018CBBA - Brussels

With the kind support of