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Pension Plan Proposal Issued March 2002 1 © 2002 moneyoptimal GmbH Content 1. Alternatives and legal requirements 2. Your company‘s requirements 3. Our recommendation 4. Facts and figures 5. Benefits for you and your employees 6. For further information 2 © 2002 moneyoptimal GmbH 1. Alternatives and legal requirements Pension promises Employee claims ... Payed by ... Limit ... Relief Fund „Unterstützungskasse“ Direct Insurance Pension Pool „Pensionskasse“ (under legal control) Pension Fund „Pensionsfond“ direct to employer via relief fund to employer to insurance to pension pool to agency handling the „Pensionsfond“ employer: reserve for pending claims or reinsurance necessary employer and/ or employee employer or employee employer and/ or employee employer and/ or employee unlimited claim up to 256.000 € or 25.800 € annual pension max. 1.752 € p.a. or 2.150 € if based on average max. 1.752 € p.a. or 2.150 € if based on average tax deductible operating expenses if payed by employer, flat-rate tax if payed by employee tax deductible operating expenses Taxation employer ... neutral if reinsured, otherwise tax reduction tax deductible operating expenses Taxation employee ... only subject to tax during pension period only subject to tax during pension period Issues for employer ... • huge amount of work concerning balance • full responsibility • complicated for HR • tax savings possible Issues for employee ... • tax reduction by shifting salary to pension period flat-rate tax during saving period, payment free of tax if payoff all at once, partly free of tax if paid as annuity • risk transfer • easy to handle • risk transfer • very easy to handle • risk transfer • very easy to handle • tax reduction by shifting • low flat-rate tax • only annuity possible salary to pension period • saving of social • low yield insurence contribution • high yields possible 3 to 4% of base salary tax deductible operating expenses free of tax but only according to „ Riesterrente“ • risk transfer • very easy to handle • flexible investment • higher yield possible © 2002 moneyoptimal GmbH Content 1. Alternatives and legal requirements 2. Your company‘s requirements 3. Our recommendation 4. Facts and figures 5. Benefits for you and your employees 6. For further information 4 © 2002 moneyoptimal GmbH 2. Your company‘s requirements Both employer and employee should be allowed to contribute to the Pension Plan Employer‘s payments should be tax deductible The risk/return ratio needs to be well balanced „Provider“ should offer a variety of appropriate solutions in order to attract all employees Easy handling for HR – avoid additional workload Service for the employees should be covered by external financial advisor What else is important for you? Just let us know... 5 © 2002 moneyoptimal GmbH Content 1. Alternatives and legal requirements 2. Your company‘s requirements 3. Our recommendation 4. Facts and figures 5. Benefits for you and your employees 6. For further information 6 © 2002 moneyoptimal GmbH 3. Our recommendation: The Relief Fund „Unterstützungskasse“ Pro‘s for the you as an employer: • • • • • Very flexible Almost unlimited Different options within this system possible Easy handling for HR Meets all needs Pro‘s for your employees: • • • • High yield Well balanced risk/return ratio No limit Tax saving 7 © 2002 moneyoptimal GmbH How does the Relief Fund „Unterstützungskasse“ work? Employer Employee Contributions Supply Insurance Company 8 Employee defines individual pension plan within a given framework © 2002 moneyoptimal GmbH Relief Fund – financed by employer and employee Relief Fund Employer financed Employee financed • different partners possible • different options possible • high flexibility: - annuity / payoff • employer provides determined pension plan • employee can enlarge it by own contributions - live / rent insurance, investment Very attractive Pension Plan Direct insurance employee financed 9 © 2002 moneyoptimal GmbH The two pillars – Why should they be combined Relief Fund „Unterstützungskasse“ Direct Insurance Taxation Supplements Advantages Suitable ... • 20 % flat tax rate • Only subject to tax during pension period • No contributions in case of disability • Disability annuity • No contribution in case of disability • Payment in case of death • Payment in case of death • Widower insurance • Tax free even during pension period • Flat tax rate during contribution period • Good profits • High profits possible, yield on gross salary • Tax reduction by shifting salary to pension period • As supplement to direct insurance • For tax saving reasons • As basic insurance • To add supplements • For employees with high salaries 10 © 2002 moneyoptimal GmbH Benefits of combining Relief fund with Direct Insurance Direct insurance Relief Fund mainly responsible for: • old age pension • tax saving • high profits mainly responsible for: • disability insurance (stand alone or in combination with life / pension insurance) • risk life insurance Attractive Pension Plan Advantage of the combination: • annuity / payoff for disability insurance is partly or fully tax free via direct insurance • higher contributions possible in total • high flexibility concerning benefits (payment in case of death, disability, early retirement) 11 © 2002 moneyoptimal GmbH Select from our „menue“ What is it? Life / Pension insurance Investment Pension Regular life / pension insurance Combination of life / pension insurence and investment • no risk • high reliability What´s the benefit? • stable return on investment • appropriate profit • stability of return on investment • good diversity based on different fonds or asset management • low risk • high yield based on efficient asset management • best fonds / shares of leading fond companies • payment in case of death possible • disability insurance including annuity can be integrated • payment in case of death possible • disability insurance can be integrated 12 „Konzepttarif“ Portfolio Portfolio • 70% REX • 30% stocks (managed) • stability of return on investment due to mixture of REX and shares • low risk through REX • high yield based on professional stock management • very high profits possible • disability insurance can be integrated © 2002 moneyoptimal GmbH Content 1. Alternatives and legal requirements 2. Your company‘s requirements 3. Our recommendation 4. Facts and figures 5. Benefits for you and your employees 6. For further information 13 © 2002 moneyoptimal GmbH 4. Facts and figures: annual contribution 2.250 € Male; age 35 years; duration 30 years Equivalent to an employer‘s contribution of 4% and annual gross salary of 45.000 € Life / Pension insurance Investment Pension Konzepttarif guaranteed payment 107.000 € 105.000 € 83.000 € total payment (incl. profit) 251.000 € 230.000 € to 310.000 € 277.000 € 90.000 € + profit available balance available balance guaranteed annuity 579 € 536 € 435 € total annuity 1.964 € 1.780 € to 2.120 € 2.235 € payment in case of death contribution 67.500 € payment 251.000 € contribution 67.500 € contribution 67.500 € payment 278.000 € 14 payment 285.000 € all total payments are calculated and not guaranteed © 2002 moneyoptimal GmbH Content 1. Alternatives and legal requirements 2. Your company‘s requirements 3. Our recommendation 4. Facts and figures 5. Benefits for you and your employees 6. For further information 15 © 2002 moneyoptimal GmbH 5. Benefits for you and your employees Advantages for you as an employee Advantages for your employees No additional cost for the pension plan (our commission is paid by the insurance) Every employee will find an option fitting him perfectly Individual information about pension plan We make your life easier by handling the pension plan advising your employees monitoring the legal requirements We are the direct contact person – every day Full-service regarding all questions concerning the pension plan We support your HR department (proactive information about legal changes, know-how transfer how to put it into practice) We help you increase your attractiveness for your employees by offering a special pension plan 16 © 2002 moneyoptimal GmbH Content 1. Alternatives and legal requirements 2. Your company‘s requirements 3. Our recommendation 4. Facts and figures 5. Benefits for you and your employees 6. For further information 17 © 2002 moneyoptimal GmbH 6. For further information ...or visit our website Please contact... http://www.moneyoptimal.de/ Richard Aigner and/or Jürgen Held moneyoptimal GmbH Bajuwarenstrasse 43 81825 München Tel: 089 / 427 207 - 00 Fax - 01 [email protected] 18 © 2002 moneyoptimal GmbH