Fernando JaimeVice President,

Global Pensions Products, METLIFE(U.S.A.)

Friday, 27.9.2013

Fernando JaimeVice PresidentGlobal Employee Benefits – PensionsHellenic Association of Insurance Companies, Hydra MeetingSeptember 2013

Securing the Future of Pensions -The Growing Importance of Supplementary Pension Funds

MetLife Alico Life Insurance Company Societe Anonyme

2

Greece’s Aging Population 2010 - 2050

1) U.S. Census Bureau, “International Programs - Population Pyramid Graph” <http://www.census.gov/population/international/data/> - accessed on June 17, 2013

Greece 2010100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

PopulationOver 65

Working AgePopulation

Greece Population by Age Group & Gender (In Thousands)

Age Dependency Ratio at 29%1 to 3.4

Age Dependency Ratio at 59%1 to 1.7

Age Dependency Ratio at 29%1 to 3.4

Greece 2050100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

Greece 2010100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

3

Greece’s Aging Population 2010 - 2050

1) U.S. Census Bureau, “International Programs - Population Pyramid Graph” <http://www.census.gov/population/international/data/> - accessed on June 17, 2013

PopulationOver 65

Working AgePopulation

Greece Population by Age Group & Gender (In Thousands)

4

Implications of an Aging Population

Demographic Drivers● Increasing Longevity ● Decreasing Birth Rates

Governments must address unsustainable entitlement programs● Pensions ● Long-Term Care ● Health Care ● Unemployment Benefits

Greece 2010

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

Greece 2050

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

Age Dependency Ratio at 29%1 to 3.4

Age Dependency Ratio at 59%1 to 1.7

1) U.S. Census Bureau, “International Programs - Population Pyramid Graph” <http://www.census.gov/population/international/data/> - accessed on June 17, 2013

5

Pressure on Public Finances

1st PillarState, Mandatory

What Options Do Governments Have?• Raise Taxes

• Raise Retirement Ages

• Decrease Entitlement Benefits

• Shift Towards Mandatory or Voluntary Funded Pension Savings– Individual Pensions

– Occupational Pensions

2nd Pillar Private, Mandatory

3rd Pillar Private, Voluntary

– 2nd or 3rd Pillar System

6

What System is Best?

There is no single best pensions system for all countries1

• Countries have Established Structures for addressing goals

• Economic Constraints impact administrative capabilities

• Political Processes affect what is politically feasible

• Policy Makers attach different relative weights to their objectives

• History influences politics and the overall propensity for change

1) Adapted from Barr, Nicholas and Diamond, Peter, “Pension Reform in China: Issues, Options and Recommendations” - February 2010

Trend of transitioning away from a heavy reliance on PAYG systems in favor of

Multi-Pillar Frameworks with a Funded Element

7

Comparison of Funded Pensions

1) OECD, “Pension Markets in Focus: Global Pension Statistics” - September 2012

Funded Pensions AUM Relative to Economy Size (as % of GDP, 2011)1

Netherlandsat 138.2%

United Statesat 70.5%

Chile at 58.5%

Greeceat 0.0%

8

Structural Overview - Netherlands (Quasi-Mandatory)1

Funded voluntary occupational system

Participation is generally not mandatory

Administered by a Pension Fund or Insurance Company

Highly developed occupational schemes

Collective risk sharing

Transferable value

Operates independently from sponsor

“Soft promise” benefits

Benefits adjusted with life expectancy

Funded Pension Assets at 138% of GDP (2011)2

Net Replacement Rate at 103% (2011)3

Structure CapabilitiesReforms

Potential - Recent

1) Adapted from the Dutch Pension Fund Organization, “The Dutch Pension System: An Overview of the Key Aspects” - October 20102) OECD, “Pension Markets In Focus: Table of Pension Fund’s Total Investment by Country” - September 20123) OECD, “Pensions at a Glance 2011: Retirement - Income Systems in OECD and G20 Counties” - 2011 (Net Replacement Rate respective to median earner)

Level of Success

9

Structural Overview - U.S. 401(k) (Voluntary)1

Funded voluntary occupational system

For employees at qualified companies

Tax-deferred with matching

Multiple regulatory agencies

Portability between employers

“Catch-Up” Contributions

Range of investment options

Lifecycle Funds

Structure CapabilitiesReforms

Potential - Recent

Auto-Enrollment

Fee disclosures

Default investment options

Funded Pension Assets at 71% of GDP (2011)2

Net Replacement Rate at 53% (2011)3

1) Adapted from ING Global Retirement Services, “Country Pension Models Around The World” - 20062) OECD, “Pension Markets In Focus: Table of Pension Fund’s Total Investment by Country” - September 20123) OECD, “Pensions at a Glance 2011: Retirement - Income Systems in OECD and G20 Counties” - 2011 (Net Replacement Rate respective to median earner)

Level of Success

10

Structural Overview - Chile (Mandatory)1

1) Adapted from ING Global Retirement Services, “Country Pension Models Around The World” - 20062) OECD, “Pension Markets In Focus: Table of Pension Fund’s Total Investment by Country” - September 20123) OECD, “Pensions at a Glance 2011: Retirement - Income Systems in OECD and G20 Counties” - 2011 (Net Replacement Rate respective to median earner)

Structure CapabilitiesReforms

Potential - Recent

Funded mandatory individual system

Replaced public PAYG system

Providers (AFPs) compete on price, service, and performance

Freedom & flexibility

Diversified investment options

Benefits based on contributions and fund yields

Retirement and disability coverage

Increase investment options

Mandatory contributions for self-employed

Funded Pension Assets at 59% of GDP (2011)2

Net Replacement Rate at 66% (2011)3

Level of Success

11

Transition from Pay-As-You-Go to Funded Systems

• Gradual Transition

• Voluntary Contributions

• Limited Participation

• Lower Contribution %

• Partial Adequacy Coverage

• Blended Financing (e.g. Taxes and External Capital)

• Immediate Transition

• Mandatory Contributions

• 100% Participation

• Higher Contribution %

• Fixed Adequacy Coverage

• Tax or Debt Issuance Financing

Aggressive Transition Moderated Transition

• Full service & bundled solutions• Single business partner with

longstanding experience

• Professional asset management• Diversified low-cost institutional

investment options

• Life cycle investment strategies • Risk adjusted asset allocations

• Annuitization during payout phase • Protects against longevity risk

• Established distribution and sales channels • Extensive sales network coverage

• Sales and employee enrollment campaigns • Supports plan setup and participation

• Communication and education for associations, employers, and employees

• Promotes financial literacy and convenient account access

12

Role of Insurance Companies1

1) Adapted from the OECD, “OECD Pensions Outlook 2012” - 2012

Meaningful BenefitsServices Provided

13

Pension Design Considerations

Mandatory Funded Scheme -Sponsored at Employer Level

Defined Contribution (DC)

Ring-Fenced Pension Assets

Contribution Rate Achieving Adequate Replacement Benefit

Benefits Paid as Programmed Withdrawals and / or Annuities

Tax-Based Incentives

Existing Insurance Company Licenses Extended into New Roles

14

This material does not constitute legal or tax advice. For such advice please consult with your own legal and tax advisors.www.metlife.com/multinationalMetLife Alico Life Insurance Company Societe Anonyme is an affiliate of MetLife, Inc.Copyright 2013 MetLife, Inc.L0913340736 [exp0214][All States]

Thank You