Investor Presentaiton
Defined Benefit Pension Schemes
•
The Group has developed a framework for pension funding and investment decision making as part of its long-term strategic planning
Management of the Group's sponsored Defined Benefit pensions schemes involves a multi-year programme, categorised into 3 broad
areas. Activity in these areas is set out below:
Mix of BSPF Defined Benefit Pension Scheme Assets (%)¹
€4.0bn
45%
€5.7bn
€5.5bn
62%
61%
11%
22%
16%
21%
18%
Dec 12
Dec 16
Dec 17
Listed equities Diversified assets2 Credit / LDI / Hedging
44%
BSPF Surplus/ Deficit under Relevant Bases Dec 17
Minimum funding
standard
Actuarial /
on-going basis
(€274m)
(€134m)
(€285m)
(€145m)
IAS19
Estimated surplus/ (deficit) at Dec 17
€264m
€404m
Pro-forma position following €140m expected cash or other suitable assets contribution to BSPF
Reduce Liabilities
• Defined Benefit ('DB') Pension schemes closed to new members in
2007 and hybrid scheme introduced
• Pensions Review 2010 and 2013 reducing liabilities by c.€1.2bn
- shared solutions with DB members - successfully executed and
extended to smaller schemes in 2014 and 2015
• A Defined Contribution ('DC') Pension scheme was introduced in 2014
for new hires and the existing hybrid scheme closed to new members
• Enhanced transfer value exercises completed for BSPF and BAPF
schemes in 2015 and 2016
Increase Assets
• >€950m of asset contributions made since 2010; further c.€206m
expected to be made across Group schemes between 2018 and 2020
⚫ BSPF asset returns of +2.8% p.a. were achieved over 3 years to end
Dec 17
Improve correlation between assets and liabilities
Reduced deficit sensitivity to both euro and sterling interest rate and
inflation rate movements through increased hedging
• Group supported the Trustees of BSPF, Group UK and BAPF schemes
in their decisions to extend the level of euro and sterling interest rate
and inflation hedging to 75% of assets
Group has continued to support Trustees in diversifying asset portfolios
away from listed equity into other return-seeking but potentially
less volatile asset classes.
Bank of Ireland Group
1Graphs shows BSPF asset allocation. BSPF represents approx. 76% of DB Pension assets
2Diversified assets includes infrastructure, private equity, hedge funds and property
50View entire presentation