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Start Early to Retire Happy

Start Early to Retire Happy. Structure. Need for retirement planning Aviva’s Retirement solutions Group Superannuation Scheme Six-Steps – towards prudent retirement planning. The Context. Indian population is ageing

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Start Early to Retire Happy

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  1. Start Early to Retire Happy

  2. Structure • Need for retirement planning • Aviva’s Retirement solutions • Group Superannuation Scheme • Six-Steps – towards prudent retirement planning

  3. The Context • Indian population is ageing • Share of people aged 60 or more would increase from 7.4% in 2001 to 13.3% by 2026, resulting in higher economically inactive population • People will live longer • Life expectation at age 60 increased from 14.5 years in 1991 to 17 years in 2001…..would further increase • Retirement age declining, joint families breaking up: people need to save for longer time • Very low coverage for old age • Only 12.3% of total workforce has some post-retirement coverage. • Need gap for 353 million people - more than total population of US & UK combined These people need to save NOW for their old age

  4. Need for retirement planning Non-working years Longer than before Increased Medical Expenses Not financiallyindependent Typical Retirement Concerns Uncertainty No support from government Interest rate fluctuations Larger Gap In required funds and EPF funds.

  5. Consumer Attitudes to Savings Growing concern and worry about retirement is leading to action amongst the pre-retired % agreeing Global 100 India 89 90 % agreeing 80 69 50 70 …yet… …therefore… 57 58 42 53 60 51 40 50 Global 35 40 India 30 30 20 18 18 20 10 15 15 0 10 10 And a majority believe that savings regularly in a disciplined manner is the best way to accumulate wealth for comfortable retirement It is the responsibility of the government to provide for the elderly I think I am going to have to work beyond the normal retirement date to fund my retirement I am taking steps now to ensure that I have an adequate level of income during my retirement 10 0 Save or invest Save or invest Invest in property Improve skills / get money regularly a better paid job whatever money I each month can when I can

  6. Key to success: Start early Retirement corpus more than halves for every 10 years of delay for same annual investment (till age 60) Annual investment more than doubles for every 10 years of delay for same retirement corpus (of Rs 1 crore at age 60). Small but regular investment made early will grow significantly (power of compounding) to sustain a happy life post retirement. Assuming gross investment return of 10% p.a.

  7. Group Superannuation Scheme

  8. Aviva Group Superannuation Scheme Unique Features • Security • Capital guarantee on three of the five fund options • More Value • Higher initial fund allocation 102% • Risk protection at a very low cost • Group Term Rider • Group Double Accidental Death Benefit Rider (available if Group Term rider is opted)

  9. Aviva Group Superannuation Scheme Unique Features • Flexibility • Option to decide the level of contribution. • Option to choose from a range of investment funds • Option to switch amongst the five fund options – 2 free switches • Option of open market annuity purchase • Transparency • Fund NAV declaration on a daily basis • On-line membership tracking • Quarterly disclosure of asset portfolio • No hidden costs - Explicit charge structure • Choice of investment portfolios • 5 investment fund options to choose from on basis of risk / return objective

  10. Aviva Group Superannuation Scheme Unique Features • Auto-Redirection of Funds • Pre-fixed percentage of funds would automatically move into less volatile investment (Cash, Debt and Secure) options on attaining an age of 50 years. Benefits • On retirement • Accumulated value of the fund. • 1/3rd of the FV can be taken as a lump sum. Open market option for annuity • On Resignation / Termination • The FV is available for transferring, withdrawal or parking with the existent trust • On Death • The fund value shall be made available to the nominee

  11. Web Superannuation – Account Information Membership detail Contribution summary Cont…

  12. Web Superannuation – Member Login GRS1087618 ************* Enter Member User ID and Password Get new password

  13. Fund Management at Aviva • Asset allocation- debt, equity, cash • Laid out by the product mandates and Investment committee • Security selection- debt and equity • Aided by the research team • Diversification of risk • 15-20 stocks in each fund • Caps for individual securities and industry allocation • Investment decisions based on analysis and research • Not based on hunches, gut feel or speculation • Entry and exit • Buying at reasonable valuations • Not getting married to the security- timely exit equally important

  14. Fund Management Philosophy- Equity “Preservation of capital” and “Consistent returns” over the long term • Invest funds in good established businesses with Proven Managements • Capture the long term business cycles while investing in securities • Disciplined research can identify such trends early • Buy at at reasonable valuations • Stock prices track the company’s real earnings growth in the long term

  15. Fund Management Philosophy- Fixed Income “Preservation of capital” and “Consistent returns” over the long term • Invest in only top quality bonds – Sovereign Bonds and highest rating of AAA • Anticipate interest rate changes and adjust portfolio duration • Evaluate independently the ability of the company to pay interest before investing

  16. Fund Performance- Group Funds As on Jan 24, 2008 Group Cash Group Debt Group Secure Absolute returns are presented for period less than one year

  17. Fund Performance- Group Funds As on Jan 24, 2008 Group Growth Group Balanced Absolute returns are presented for period less than one year Assets Under Management In Group Funds: Rs. 43.25 crs.

  18. Fund Performance- Pension Funds As on Jan 24, 2008 Pension-Growth Pension-Balanced Pension-Secure Assets Under Management In Pension Funds: Rs.360.85 crs.

  19. Why Aviva? Superlative fund performance In-house fund management team Different Fund options for Organizations to choose from From a complete debt to 60% equity component The Aviva advantage Exceptional Service TAT Claim settlement within 7 working days Information at your fingertips Get daily/weekly updates on NAV through email and SMS Complete transparency We invest only in Sovereign rated guilds and AAA rated bonds Dedicated Relationship Manager We provide a dedicated Relationship Manager who will take care of all your requirements

  20. Leveraging Key strengths • Over 300 years of global experience • Managing assets worth $ 730 billion worldwide • In-house fund management in India since inception • Significant investment in infrastructure and people • Investment based philosophy • Research driven investments • Low risk investing style for long term wealth accumulation 23

  21. Leveraging Key Strengths • Paid –up Capital of Rs1004.3cr • Solvency margin close to 200% of regulatory requirements • Decentralized processing centers in Mumbai, Delhi ,Chennai & Kolkatta • Bancassurance-focused company-brings to the forefront the “partner centricity”

  22. Launching Six Steps • One stop, independent site on retirement planning • Community Initiative • Help people make informed financial decisions about their retirement

  23. The Six Steps Step 1: Take control - make a plan for your future Step 2: Know yourself – how do you feel about money and taking risks Step 3: Save little and often – put some money aside every month Step 4: Invest for the future – build up your long term savings Step 5: Protect yourself – look after yourself and your money Step 6: Get advice – speak to a financial adviser

  24. Benefit to Individuals Understanding the need to plan for retirement • Retirement calculator • Independent, unbiased advice • Seek advice and interact with well known independent financial analysts • Amar Pandit • Narayan Krishnamurthy • Simplifying financial planning • Case studies based on Six Steps • Links to important sites on financial planning • Aiding financial literacy • Glossary • Know your risk profile • Quiz on Financial Personality

  25. Worldwide Presence Serving 40 million customers in over 25 countries Fortune Global 28 Company 5th largest Insurance group Oldest Insurance Group in the world Assets under management of GBP 377 billion (June 30, 2007) GBP 41.5 billion premium income (Dec 31, 2006) Focused on Life and long term savings- 72% of premiums 35

  26. 8,850 5,950 1,800 125 3130 13,000 Continental Europe 16,725 370 13,200 North America 3,500 9,850 2699 550 UK 36,600 325 10 Asia-Pacific 3034 60000 Employees serving 40 mn Customers in over 25 countries Fund Mgt Life GI Other ** * Including 10,000 for RAC **Other : includes non insurance operations, RAC, NUCS and Corporate Office A truly international company … 36

  27. Worldwide Business Mix Long Term Savings (73%) Rest of the World 4% General Insurance (27%) Continental Europe 6% UK 17% UK 32% Rest of the World 4% Continental Europe 37% 37

  28. Aviva… where exceeding expectations through innovative solutions is “our” way of life

  29. Thank –YouFor Details please contact:Lata Varma lata.varma@avivaindia.com+91 9811111330bhavna.banerjee@avivaindia.com

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