1 International Mobile Employees Pension Needs and Solutions Rüdiger Blaich, Regional Sales Director, AEGON Global Pensions, D Global HR News Paris, France.

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International Mobile EmployeesPension Needs and Solutions

Rüdiger Blaich, Regional Sales Director, AEGON Global Pensions, D

Global HR News

Paris, France8 December 2009

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CONTENT

1. Introduction: global pension issues

2. Development of mobile workforce

3. Pension needs of mobile workforce

4. Our solution

5. Client cases

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Introduction

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Does anybody assume that there is growth in the World?

Each day World population increases by 170,000!

Ageing population

Generation “65 plus” in % in 2000 and until 2030 –20 years from now?

6% raising to 12%!

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Do you know how “your mobile workforce” will be able to retire?

Take the time now to actbefore you will be forced to do so!

How did the number of Expatriates develop over the past 3 years?

• Increase by 90% over last 3 years• 47% of companies increased traditional expats (1-5 yrs)

• 38 % increased “international nomads”

(due to recent Mercer study 2008/2009)

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Pensions for local employees in the World

Reached the peak right now!

Growing World Population in age groups

In 40 years:

2.8 billion more people =

170,000 per day that did not die !

It is a worldwide challenge:

We die later (live longer) We have fewer children and

are getting older!

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State Pensions still dominate old-age income in Europe

World Bank 3-pillar-system

Pension system(World Bank model)

I. State

pension

III. Privatepension

II. Occu-

pationalpension

Source AEGON Global Pensions

The challenge:Dependency ratios for 1st pillar

are increasing in all countries!

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Many expatriates don’t fulfil minimum conditions in their host or / and home

countries.First pillar is much lower than with

competitive local workforce!

Pension systems for local employees are nowhere sustainable

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Development of mobile workforce

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Globalization More People have no more a home location.

Local pension provision often unmanageable.

Reasons to opt for an International Retirement Plan

Recruitment and retention

Lack of home/host country provisions

Top-up provision for key expats

Cost efficiency and governance

Source: Mercer, 2008/2009 Benefits Survey for Expatriates and Globally Mobile Employees

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Location of multinational companiesF+UK+D+NL+CH = 55% (80% of Europe based)+ US = 87%

32%

17%

11%

12%

10%

5%

7%

6%

US UK Fr Ge NL SWI J PN Rest

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International assignments in today’s world

Studies from Mercer, Ernst & Young, PWC have shown:

The Number of Mobile Workforce is increasing

There is a need for better governance in most companies

There is a need for higher Flexibility, Control and Security

Pension are the most challenging topic amongst International Human Resources Departments*.

40% of companies finds pension challenging

28% of companies finds pensions very challenging

Source: Ernst & Young, 2009, Switzerland, Global Mobility Effectiveness Survey

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Many individuals have no experience in planning for their retirement and the first pillar provision for retirement

pensions is very often very limited.

“International Nomads” need additional pensions!

Who is willing to think about income in retirement in 20 or 30 years time?

Mobile workers have to concentrate on new environment: culture, language, responsibilities.

Limited time for their own issues!So for Expats the challenge is even bigger!

It is the need that companies help!

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Pension needs of mobile workforce

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International Retirement Plan: for whom and why?

For employers that need skilled staff in different places :

• Multinational companies, International organisations, Non Governmental Organisations

• No local satisfactory solution in host country

• No option to keep contributing to home country plans

focus now is mainly on long term mobile employees

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Grouping of personnel

“GlobalNomads”

(international plan)

Permanent Moves(plan host country)

Limited duration assignments(plan home country)

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International Mobile EmployeesMobile employees

1. Expatriats

2. Third Country Nationals

3. Foreign nationals

not able to participate in domestic

schemes

Special needs

1. Transfer of assets anytime, multi-currency, multi-lingual

2. Key Personnel, good pension provision (DB or DC), additional employee contribution

3. Flexible, Straightforward and Secure Retirement Provision

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Our solution

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Selection criteria – Expat providerThe ideal features of an IPP are:1. Plan design: Flexible, cost-effective and customized to meet the

needs of the company and members 2. Administration: Customer service oriented, secure and

accessible systems3. Investment funds: Wide range of international investment funds

across asset classes, Open Architecture4. Trust services: Plan assets separated from company assets (if

not using an insured contract) 5. Governance: Effective risk management, documented

processes and controls, and clear roles and responsibilities 6. Communication: Easily understood by employees, allowing

them to appreciate the benefits offered

International pension plans: Selecting a providerLast updated: 5 March 2009 (Mercer)

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International plan features

Multi lingualMulti currencyTax free capital growthInvestor protectionFlexibility of plan designOpen architectureOnline support

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International Retirement Plan

Insured, bundled, multi-currency retirement planCompetitively pricedInvestment solutions

6 risk profiles in 3 currenciesGuaranteed fund

Investment choiceUse an asset manager selected by La MondialeLa Mondiale Europartner platform: over 1,000 funds

Governed by Luxembourg legislationTax-free accumulation of contributionsInvestor confidentiality, protection and security

Online support

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Leading financial center for mutual funds Tax free growth

No withholding tax

No tax on capital gains

Maximum investor protection Under supervision of the supervisory authority for the insurance sector “Commissariat aux Assurances”

100% assets deposited with Custodian Bank

Professional secrecy a legal requirement

EU regulated

Why Luxembourg?

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Online supportView the latest available valuation

Set & view previous account statement periods

See performance of your portfolio

View all account transactions

Create account documents in Excel or PDF

Print transaction confirmation documents

Test risk assessment profiling tool

On-line active switching foreseen for 2010

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Online support

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Risk profiles

Life style approach, less risk, more bonds when closer to pension

Freedom to switch between profiles

Profiles can be tailored

Management profiles

EUR / USD / GBP Bonds Equity

Short term Less than 4 years 100% -- --

Medium term From 4 to 8 years 20% 50% 30%

Medium long term From 9 to 12 years -- 60% 40%

Long term From 13 to 16 years -- 45% 55%

Very long term From 17 to 20 years -- 20% 80%Maximum term More than 21 years -- -- 100%

Number of years remaining until retirement age

RussellLMEP guaranteed

funds (EUR/GBP/USD)

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Established in Luxembourg 1989

Part of La Mondiale & AEGON insurance groups

6000+ high net worth clients

65 group pension schemes covering 3500 employees

92 multi-lingual staff based in Luxembourg

Client servicing teams assigned per client

Authorised to transact business in the EU directly or via a trust if policyholder resides outside of EU

Transparent charging structure, offering multi-currency investment solutions

La Mondiale Europartner

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Client cases

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European Commission

Michelin

ITER

BHP Billiton

NATIXIS

SeaBird

Client cases

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Case study

AEGON Global Pensions provided a highly flexible, retirement plan at a cost that was comparable with the company’s domestic pension arrangements.

Challenge

The client is a leading international construction company employing more than 30,000 people worldwide.

Solution Benefits

As a global employer, the company wanted to find an effective funded long-term retirement and savings solution for several hundred key expatriate and local national employees.

AEGON Global Pensions provided the company with a specially tailored International Retirement Plan, delivered by La Mondiale Europartner in Luxembourg.

• Highly flexible

• Secure online access

• Reduced cost

• Easier to manage

• Multilingual support

• Excellent service

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Summary

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Proposition International Retirement Plan“Next Practice”• Benefits: multi-lingual, multi-currency, insured retirement plan

• International Mobile Employees of MNC’s and NGO’s

• Start immediately: Insurance contract, ready and available

• Flexible platform: Default 6 risk profiles and a Guaranteed Fund in 3 currencies, for major clients selection of over 1.000 funds

• Solid investment solution: governed by Luxembourg legislation, investor confidentiality, protection and security

• Grow with the client: plans from 5 members till unlimited

• Online support: Ready for the future from consultation and illustration purposes till active switching as from 2010.

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What you should remember:“Next Practice”HR Directors deal regarding their expatriates on “3 Rs”:

Recruit

Retain

Repatriate

There is a need to adding two more „Rs“:• Retire• Rüdiger ;-)

For long–term expatriates you need to implement a pension plan – and if you need help: call me! ;-)

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Thank youAGP [email protected]+49 7141 648 39 80Erich-Schmid-Str.1371638 LudwigsburgGermany

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.