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.
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