This is a presentation delivered to the Investment Network on Measuring the Effectiveness of DC Pensions. The premise is that you can\'t begin to judge the efficacy of plans without understanding and comparing actual individual member outcomes.

1. “In God we trust – all others bring data” Measuring the Effectiveness of DC 02 July 2010 – The Investment Network Nigel Aston

2. Measuring the effectiveness of DC The only game in town Play the market Playing safe The winner takes it all A level playing field

4. Evolving market

5. Outcomes are what counts

6. The one with the most money wins

7. It’s a team game

8. The journey as well as the destination

10. Trustee/governance board

11. Sponsor

12. Consultants

13. Providers

14. How do they play?

16. It’s not just the address – it’s the number of houses and hotels too PARTICIPANT A (‘Tim’) These significant differences are not captured in current processes PARTICIPANT B (‘Tom’) Good investment products do not make a good service, measuring outcomes is critical

17. Francois Huber

19. Even within the same type, behaviour varies based on other factors, e.g. demographics, environment.8

20. 2 years risk / return by member There is significant dispersion in the outcomes achieved by members, including those relying on the default strategy. 2 Years Annualised Return Median Risk = 22% 2 Years Annualised Risk (Volatility) Median Return = -16% SOURCE: PensionDCisions 9

21. Personal performance benchmarking

22. Measuring the effectiveness of DC The only game in town Play the market Playing safe The winner takes it all A level playing field

23. It’s not about herding – but think about the outliers

24. Who are your outliers? Median Risk RETURN Median Return RISK FTSE PensionDCisions DC Index - Growth

25. Cloud watching

26. Cloud watching

27. Measuring the effectiveness of DC The only game in town Play the market Playing safe The winner takes it all A level playing field

29. 1.7m members

31. 630,000 members

33. Measuring effects of asset allocation Proportion of Customised (White Labelled) Solutions UK vs. US

34. Measuring the effectiveness of DC The only game in town Play the market Playing safe The winner takes it all A level playing field

36. Objective measure of asset allocation and glide path

37. A target date maturity approach

38. Shows risk and return throughout the lifecycle

39. A new level of transparency

40. FTSE PensionDCisions Growth Index Saving for retirement

41. FTSE PensionDCisions 2020 Index

42. FTSE PensionDCisions 2015 Index Approaching retirement

43. FTSE PensionDCisions 2010 Index

44. FTSE PensionDCisions At-Retirement Index At retirementAsset class weightings obtained from PensionDCisions “Sponsor Default Survey” Contains all asset classes with more than 1% aggregate weighting across the sample

46. A yardstick for stakeholders to calibrate decisions

47. An independent platform against which consultants and asset managers can demonstrate value added

48. Develops over time to incorporate other asset classes

49. Reflects various points in the life cycle

51. Express opinion about what is right

52. Encourage herding:

53. Diversity is set to increase

54. Monitoring risk alongside return is critical

56. Measuring the effectiveness of DC The only game in town Play the market Playing safe The winner takes it all A level playing field

57. Index Series Historical Graph