There are several key drivers for merging pension funds into a single Pan-European pension fund. This includes reducing operational risks through more centralized oversight and control, achieving efficiency gains from economies of scale, and lowering costs through a single European entity with a unified governance structure and lower regulatory burden. A single pension fund could also allow for funding flexibility, tax optimization, and cost transparency while easing multinational corporate transactions and workforce mobility across borders. Overall, a Pan-European approach has the potential to simplify administration and risk management for multinational companies while improving the sustainability of pension systems across the EU.

1. 1 Convergence in European Pension Markets What are the main drivers to merge pension funds into a single Pan European Pension Fund? Philip Neyt, Chairman Belgian Pension Fund Association Belgian Pension Fund Association - T : +32 2 706 85 45 - E : info@pensionfunds.be - www.pensionfunds.be

2. Pressure on EU Pension Systems EU Citizens’ feelings about future pensions (Eurobarometer 2010) Pension will not change Lower pension benefits 27% 27% 73% 26% 20% Pension will change Save more Retire later 2

3. Pressure on EU Pension Systems EU Citizens’ feelings about future pensions (Eurobarometer 2010) Pension wil be adequate 53% 47% Fairly or very worried of pension income 3

4. Pressure on EU Pension Systems Remedies AFFORDABILITY AND SUSTAINABILITY OF STATE PENSION= life expectancy at effective retirement age ADEQUACY OF STATE PENSIONS= average state pension compared to average wage OCCUPATIONAL PENSIONS: CLOSING THE GAP?= Assets/Liabilities ratio EU = 18,5 YRS Work longer, Later/flexible Retirement EU = 42 % Need of occupational pensions Annual Growth Rate (Liabilities-Assets) 2000-2010: 3% More gripon pension (funding) risk (f.ex.Pan-European pension fund ….) 4

5. Pension Risk at the Corporate Agenda “Since 2009 pensions belong to the top 10 concerns of CFO’s” (CFO.com) “Deficit in US States’ employee retirement funds grows to$ 1.3 trillion of 11.000 $ for each American” (Pew Center, 4/2011) “FTSE 350 companies face a pension deficit of £177 bn or 78% of their earnings” (Hymans & Robertson, 3/2010) “One third of FTSE100 companies can now not pay off deficits in any realistic timeframe from discretionary cash flow” (KPMG, 2010) “A pension promise can be easy to make but expensive to keep. The immediate cash cost is only part of the problem; the longer-term calculation also involves the value of future pension promises. (The Economist, 4/2011)” 5

6. Multinational Pension Asset Pooling Company MNC UK Pension Plans Company MNC GermanPension Plans Company MNC FrenchPension Plans Company MNC GermanPension Fund Company MNC FrenchPension Fund Company MNC UK Pension Fund PooledAssetVehicle Manager A Manager B Manager C Investments 6

7. Multinational Pension Fund Pooling Company MNC UK Pension Plans Company MNC GermanPension Plans Company MNC FrenchPension Plans Single Pension Fund Entity Manager A Manager B Manager C Investments 7

9. Pooling of “know how” (deeper expertise)

10. Leaner admin and fewer providers and interfaces

12. Tax optimization

13. Lower regulatory burden (single supervisor)

14. Solidarity between subsidiaries or ring-fencing

15. Better cost transparency and lower operating costs8