Aegon Voluntary Pension Fund. We take care of your pension savings today to guarantee peace of mind in the future

Transcription

1 Aegon Voluntary Pension Fund We take care of your pension savings today to guarantee peace of mind in the future

2 Why is it important to take care of your own pension? There is a solution: voluntary pension fund savings Average age is increasing steadily all over the world, we live longer. This is good news, as we can expect to live even years as a pensioner. 1 Governments are paying pensions from the contributions of active workers. The problem is that fewer children are being born and more young people are leaving the country. What does it mean? Less and less active workers have to provide for more and more retirees. 2 Average pension amounts to HUF 118,439 3 yet more than 1 million retirees live on HUF 50,000-90,000 in Hungary. 4 Are you prepared to live almost a quarter of your life by narrow means? You may use your voluntary pension fund savings to complement your future government pension to look forward to a financially secure retirement. The government sponsors your pension fund savings There is a 20% tax reimbursement on your own contributions! What does it mean? The government will add 200 forints tax reimbursement on every 1000 forints you pay to your individual pension account. Flexible pension savings You may pay your membership contribution yourself or using your annual Cafeteria limit; You decide when and how much you want to pay. 6 You may pay your contribution monthly or quarterly, and can top-up your assets by additional payments. Population prediction retirees (65+ yrs) active workers (20-54 yrs) children (0-19 yrs) % Exempt from capital return tax Return credited on your savings is exempt from capital return tax and social security contributions. One of the most inexpensive pension savings 7 Average industry charges are below 1%. Inheritable You can name a beneficiary for your savings so you can take care of your loved ones. If no beneficiaries are named, your heirs will be entitled to your savings. million Central Statistical Office 2 Central Statistical Office: Population calculation and predictions 3 hvg.hu - Map: Is your pension higher than the average? Jan 29, December, data pertaining to old age pension (Source: Central Administration of National Pension Insurance) 5 You are entitled to 20% tax refund based on your individual payments and company contributions up to the amount of your personal income tax in relation to the aggregate tax base paid in any given year, but up to HUF 150,000 a year. You are entitled to tax refund in relation to other savings. In this case pay attention to these rules: - Maximum HUF 150,000 of tax refund is available to you a year in respect of your voluntary pension fund, health fund and voluntary mutual aid fund payments. - Maximum HUF 280,000 of tax refund is available to you a year in respect of your voluntary fund, pension savings and pension insurance payments. 6 Pursuant to the Regulations the minimum membership fee to be paid by every member is 5000 forints a month or 15,000 forints a quarter in Hungarian National Bank: Cost charges of pension fund members ( ).

3 Why choose Aegon Voluntary Pension Fund? Safety If it s pension, choose Aegon 1 out of every 6 people in the world is paid their pension by Aegon Group. In more than 20 markets millions have chosen Aegon and its products. The group s size and expertise means considerable safety to its clients. The Pension Fund s asset manager and operational service provider is the member of the worldwide Group originally established in the Netherlands FOUND MANAGER OF THE YEAR 2017 FOUND MANAGER OF THE YEAR Professional financial expertise The portfolios of Aegon Voluntary Pension Fund are managed by Aegon Hungary Investment Fund Manager. We are proud that our fund manager was chosen Fund Manager of the Year in 2015 and You don t need any investment experience, your retirement savings will be managed by experts.

4 Gradually decreasing cost deduction Costs decrease gradually as the amount invested grows. It means that cost deduction for the operation of the fund is lower from the part of your annual payment which falls within the upper limits. It is only 1% above the highest limit. 8 Above inflation returns 2017 Infláció feletti Classic Portfolio (asset hozamok ratio: 8%) net returns and inflation Balanced Portfolio (asset ratio: 64%) Growth Portfolio (asset ratio: 14%) 3,18% 6,77% 7,77% Expert Absolute Yield Portfolio (asset ratio: 11% ) 5,07% Limits based on annual membership fees received Reserve fund (individual account) Operating fund Liquidity fund Climate Change Portfolio (asset ratio: 3%) Inflation (Dec/Dec) 2,10% 4,78% membership fee between HUF 0 10,000 90% 10% 0% membership fee between HUF 10, ,000 94% 6% 0% membership fee between HUF 120, ,000 96% 4% 0% membership fee between HUF 240, ,000 98% 2% 0% 10-year average net return rate and inflation ( ) Classic Portfolio Balanced Portfolio Growth Portfolio 6,03% 6,37% 5,99% membership fee above HUF 500,001 99% 1% 0% Expert Absolute Yield Portfolio* 7,83% Climate Change Portfolio* 9,21% Inflation (Dec/Dec) 2,70% For example: If you pay the minimum monthly membership fee, i.e. your annual contribution is HUF 60,000, HUF 4000, i.e. 6.6% will be deducted. If you pay HUF 300,000 a year: 10% (HUF 1000) up to the first HUF 10,000, 6% (HUF 6,600) up to HUF 120,000, 4% (HUF 4,800) up to HUF 240,000, 2% (HUF 1,200) above HUF 240,001 will be deducted, i.e. HUF 13,600 in total, which is 4.5% of your total contribution. 15-year average net return rate and inflation ( ) Classic Portfolio Balanced Portfolio Growth Portfolio Expert Absolute Yield Portfolio* Climate Change Portfolio* Inflation (Dec/Dec) 3,68% 6,15% 7,19% 8,52% 7,83% ,21% 8 The first payment of HUF 4000 after becoming a member will be transferred to the operating fund. Any further payments will be affected by the limits and amounts indicated in the table. Source: pension fund returns and inflation disclosed by the Central Statistical Office. Past performance shall not guarantee future returns. * The Expert Absolute Yield Portfolio and the Climate Change Portfolio was set up in February 2008, so we do not have the annual returns for 10 and 15 years. We included the average returns of the period between 2009 and 2017 pursuant to legal stipulations. Average inflation for the 9-year period between was 2,61%.

5 When and how much should I save? What happens if someone saves up 20,000 forints a month 10, 20 or 30 years before retirement? 9 Age at the beginning of the savings period 55 years old 45 years old 35 years old Savings duration 10 years 20 years 30 years Total savings HUF HUF HUF Tax return HUF HUF HUF Expected return HUF HUF HUF Accumulated assets HUF HUF HUF It is worth starting to save regularly as early as possible, even at the age of 35, because you may get almost twice the amount of your savings when you retire due to tax refund and returns. The impact of compound interest will be achieved in the long term 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 71% 62% 55% 10 years 20 years 30 years Expected return Tax return Payment 9 Parameters for calculation: All calculations were made using Aegon s voluntary pension fund calculator. 2% membership fee growth and 1% real return were taken into account (HUF 0 starting savings). We have calculated the current level of tax return for the total duration of membership. All amounts were rounded off to the closest number dividable by 500. We have applied gradually decreasing cost deductions on membership fees effective as of January 1st Calculations are based on estimates and are not intended as an offer. When calculating present and future values the inflation forecast by the Ministry of National Economy were taken into consideration. The results cannot be guaranteed in the future. What is indexation? Let s suppose you started to save 5000 forints a month eight years ago. You could buy 20 kgs of bread from this amount in 2010, but only 18 kgs in 2017, because pursuant to the Central Statistical Office the price of bread has gone up by 14,3% in the past 8-year period. In other words, in order for your monthly savings to keep their value you should be paying at least 5715 forints as compared to the original 5000 forints. If you choose indexation you will have the opportunity to increase your membership contribution each year, and you decide if you want to keep up with the inflation: indexation is the annual consumer price index from the previous year as published by the Central Statistical Office + 2%.

6 When and how can I use my savings? After you retire: you can withdraw a part or all of your savings in a lump-sum amount, you can be paid a regular annuity for a period of 5-25 years, you can withdraw a part of your savings in a lump-sum amount and be paid the rest as an annuity. 10 Before you retire: You can withdraw a part or all of your savings on your personal account after minimum 10 years of uninterrupted membership. You will be obliged to pay tax on the capital pursuant to the law, but the return will be exempt from tax. What portfolios may I choose from? Classic Your savings are invested by our experts so your pension fund assets will grow by the returns on your investment in addition to the 20% tax return¹¹. Pension fund members may choose from 5 investment portfolios. Each portfolio is different so the risks involved and the expected returns are different too. The less stocks a portfolio has, the safer it is, but expected returns are likely to be more moderate, too. One may achieve higher returns in riskier portfolios consisting of more stocks on the longer term depending on market conditions, but results may be volatile in the shorter term. Target ratios of the portfolios available at Aegon Voluntary Pension Fund Balanced 100% 77,5% 20% 2,5% Expert Absolute Yield 100% Growth 51,5% 45% 3,5% Climate change 50% 50% Bonds and Money Market Assets Other: Real Estate Fund and Absolute Return Fund Stocks The asset manager is free to decide within the limits set out by law and the fund management policy, there is no predetermined strategic asset allocation. The objective is to achieve absolute return. 10 Details in the Rules and regulations. ¹¹ You are entitled to 20% tax refund based on your individual payments and company contributions up to the amount of your personal income tax in relation to the aggregate tax base paid in any given year, but up to HUF 150,000 a year. You are entitled to tax refund in relation to other savings. In this case pay attention to these rules: - Maximum HUF 150,000 of tax refund is available to you a year in respect of your voluntary pension fund, health fund and voluntary mutual aid fund payments. - Maximum HUF 280,000 of tax refund is available to you a year in respect of your voluntary fund, pension savings and pension insurance payments.

7 Which portfolio should I choose? When choosing a portfolio we recommend that you take into consideration the duration of your savings, your personal risk profile and the return you expect to increase the amount of your future pension with. Portfolio Classic Recommended duration of investment (time to retirement) 1-5 years 5-10 years years 15+ years Balanced Expert Absolute Yield Growth Climate Change Portfolio Classic Risk classification (1 = low, 5 = high) Balanced Expert Absolute Yield Growth Climate Change

8 Know all about our portfolios The Expert Absolute Yield Portfolio is for clients who want to rely on the asset manager s expertise in choosing the composition of the portfolio. So there is no need to monitor the changes in the investment market all the time, because our experts will choose the appropriate ratio of stocks and bonds instead of you at the right time. This medium risk portfolio has no constant ratio of stocks and bonds. By changing the composition of the portfolio in a dynamic manner the asset manager will achieve higher returns than risk-free investments in the medium term. The low risk Classic Portfolio The high-risk Growth Portfolio is for clients who have five or less years until retirement and for whom security is a priority. By choosing safer securities the portfolio will help you preserve the value of your savings while achieving above inflation return. Therefore the portfolio almost exclusively consists of government securities and the value of your pension savings will grow evenly depending on market circumstances, but without high volatility. is for clients who have at least 15 years until retirement. The objective is to achieve high returns in the long term (15-20 years). The portfolio is mainly composed of shares belonging to the biggest Hungarian and international listed companies with solid capital or promising growth potential, which exposes high price risk. The medium risk Balanced Portfolio The Climate Change Portfolio is for clients who have 5-15 years until retirement. Invested assets will have high return in the medium and the long term while mitigating investment risks, so the portfolio consists of government securities for the most part. Hungarian and international stocks constituting the lesser part of the portfolio may significantly improve the performance of your investment, however they will increase risk accordingly. This is the Basic Portfolio in which we place the investment of members who do not choose a portfolio. is for clients who are willing to take high risk hoping high returns by investing in an industry which will be one of the most dynamically growing areas in the coming decades by fighting against climate change. By choosing this portfolio you will contribute to the protection of the environment. The objective is to achieve high returns in the long run by investing primarily in the shares of companies whose income mainly comes from utilizing business opportunities deriving from global climate change and alternative resources such as renewable energy as well as agriculture.

9 Client Service at Aegon Voluntary Pension Fund How to Become a Member Join Aegon Voluntary Pension Fund by completing the Membership Application Form which you will find in the Downloadable documents folder at Just hand over the completed application form to your advisor or send it by post to 1399 Budapest, Pf Portfolio switch Possible risks of a portfolio switch As pension fund savings are investments for the long term, switching between portfolios may have considerable risks. A portfolio switch performed at the wrong time may result in realizing losses. Losses and returns will compensate each other with time. Of course you have to make such decisions. What is the cost of a portfolio switch? Choosing a portfolio upon becoming a member is free of charge. The cost of switching between portfolios subsequently is 0.1% of the current value of your invested assets denominated in forints, but maximum 2000 forints. E.g. if you want to switch your assets amounting to HUF 1,000,000 to another portfolio, it will cost 1000 forints, while it will be 2000 forints if your assets amount to HUF 5,000,000. It is important to know that you can only choose one portfolio for your pension fund savings. How to Pay Membership Fees You may pay your membership fee by bank transfer, direct debit, by bank card through our website ( or by postal cheque. Telephone and Online Call Centres Register at and handle any issues related to your savings from the comfort of your home. You may access your current balance or change your personal data any time. If you have any questions, contact our Call Centre. E-post service You may request to receive information from us in . Request the comfortable and quick e-post service through your online client service account. How will you be informed of the result of your investment? Pursuant to the law we will send you an annual investment report by February 28th of each year, which will list your payments from the previous year as well as the returns achieved and your current balance. The current prices of our portfolios are updated every day and are accessible through

10 Aegon Baba-Mama Program életbiztosítás Start to prepare now! If you are interested or would like to know more about Aegon Voluntary Pension Fund, contact our professional advisors who will help you in your financial decisions with recommendations tailored to your needs. Contact information: Call Centre: Website: nypugyfel@aegon.hu Online Client Service:

11 NYP-0139v5_eng February 13 th 2018 Your Aegon contact: Aegon Magyarország Pénztárszolgáltató Zrt Budapest, Pf Call Centre: