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Investor Presentaiton

Defined Benefit Pension Schemes Bank of Ireland Group Group has developed a framework for pension funding and investment decision-making as part of a long-term plan. Management of Group's DB pension position involves a multi-year programme, categorised into 3 broad areas. Activity in these areas includes; 1 Review Liabilities Pensions Review 2010 and 2013 - shared solutions with members - successfully executed Pension Review programme was further extended to smaller schemes in 2014 and 2015 A Defined Contribution ('DC') scheme was introduced in 2014 for new hires and existing hybrid scheme closed Further exercises to reduce volatility in liabilities have been undertaken e.g. successful enhanced transfer value pilot exercise in H1 2015 2 Increase Assets >€600m of deficit-reducing contributions made since 2010; further €550m expected to be made across Group schemes between 2016 and 2020 Timing of contributions takes account of Basel III transitional capital rules BSPF asset returns of c.11.5% p.a. were achieved over 3 years to end 2014, with further c. 4% in H1 2015 3 Improve correlation between assets and liabilities Group has supported Trustees in diversifying asset portfolios away from listed equity into other return-seeking but less volatile asset classes e.g. 20% of return seeking assets were switched to matching assets in 2014 Continuing programme to better match asset allocation with the nature and duration of liabilities (ref chart below) Since the end of Jun 15, a further €350m of liability hedging has been executed through the LDI portfolio and €270m of investment in Secure Income Assets is in train Mix of BSPF DB Pension Scheme Assets (%)¹ 45% 11% 44% Dec 12 Listed Equities 53% 19% 28% Jun 15 Diversified² Credit / LDI / Hedging 1Graphs shows BSPF asset allocation which is representative of the Group schemes overall. 2Diversified category includes Infrastructure, Private Equity, Hedge funds, Property. 40
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