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 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;
Review Liabilities
Pensions Review 2010 and 2013 - shared solutions with
members - successfully executed and extended to smaller
schemes in 2014 and 2015
A Defined Contribution ('DC') scheme was introduced in 2014
for new hires and existing hybrid Life Balance scheme closed
An enhanced transfer value exercise is under consideration for
the BSPF scheme in H2 2016
2 Increase Assets
▶ >€750m of deficit-reducing contributions made since 2010;
further €400m expected to be made across Group schemes
between 2016 and 2020
►BSPF asset returns of c. 10.5% p.a. were achieved over 3 years
to end Jun 16 despite market volatility
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. allocation to private infrastructure
The €150m BSPF deficit reducing contribution in December
2015 was invested in the LDI portfolio in January 2016
Group has supported the Trustees of BSPF scheme in their
decision to extend the level of sterling interest rate and inflation
hedging to 60% in 2016
Group has also supported the Trustees of the BOI Group UK
scheme in their decision to extend the level of interest rate and
inflation hedging to 60% in 2016
Continuing programme to better match asset allocation with the
nature and duration of liabilities
57%
60%
Mix of BSPF DB Pension Scheme Assets (%)¹
45%
11%
19%
44%
24%
Dec 12
Dec 15
20%
20%
Jun 16
Listed equities Diversified 2 Credit / LDI / Hedging
Group Schemes Asset & Liability Sensitivities Jun 16
Sensitivity of scheme assets is:
Fall in global equity markets with allowance for
other correlated diversified asset classes
Sensitivity of liability-matching assets
to a 10bps movement in interest rates
Sensitivity of IAS19 liability is:
IAS19 Liability
Discount Rate
Long Term Inflation
Change
5.00% decrease
Impact on plan assets
increase (decrease)
(€120m)
0.10% decrease
€60m
Change
25bps decrease
10bps decrease
ROI Schemes
€376m
(€95m)
UK Schemes
€80m
(€20m)
1Graphs shows BSPF asset allocation which is representative of the Group schemes overall
2Diversified category includes infrastructure, private equity, hedge funds and property
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