Pension Seminar Defined Contribution (DC)

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Pension Seminar Defined Contribution (DC)
Defined Contribution (DC)
                            Pension Seminar
                                Intermediate Course

                                               May 2022

      Information provided here is for informational purposes only for making investment decisions and does not
      intend to solicit investment. While Sompo Japan DC Securities Inc. has prepared this document based on
      data which were deemed to be reliable, Sompo Japan DC Securities Inc. does not guarantee its integrity or
      accuracy. Furthermore, past performance results do not guarantee future performance. These slides have
      been planned and prepared by Sompo Japan DC Securities Inc. for the purpose of using in your company’s
      DC pension plan education seminar. Copyrights belong to Sompo Japan DC Securities Inc. Please do not
      release, rent or provide these slides outside of your company.
                                                                           .
Copyright Sompo Japan DC Securities Inc
Pension Seminar Defined Contribution (DC)
DC Plan
The purpose of a DC plan is to “prepare money
for post-work life”.

                                                       65

       ・Benefit amount depends on investment results.
       ・The amount will be kept invested until benefit payments are completed.
       ・In principle, early withdrawal from the DC plan and early withdrawal of
       your assets are not allowed.

Copyright Sompo Japan DC Securities Inc                                           2
Pension Seminar Defined Contribution (DC)
Main Amendments to the DC Law in 2022
Enforcement                        Amended items                             Outline
                                                         The upper age limit to claim
               (1) Expansion of claim period
    April 2022                                           retirement benefits will be raised
               for retirement benefits
                                                         to age 75.
                                          ①For           In principle, participation will be
              (2) Raising                 corporate-     allowed until age 70.
     May 2022 participant                 type DC plan   *Participant eligibility age differs by company.

              eligibility age                            Participation will be allowed until
                                          ②For iDeCo
                                                         age 65.
              (3) Relaxation of requirements             Improvement of early withdrawals
              for early lump-sum payments                (early lump-sum payments) under
     May 2022
              when a foreign national returns            DC plans for foreign national
              to home country                            employees
                                                         Rollover of assets in corporate-
     May 2022 (4) Expansion of portability               type DC plan to Pension Fund
                                                         Association upon retirement
       Oct. (5) Relaxation of requirements               Elimination of DC plan document
2022(Schdul for iDeCo participation of                   requirements to prescribe
         e) corporate-type DC participants               simultaneous participation in iDeCo
Copyright Sompo Japan DC Securities Inc                                                                     3
Pension Seminar Defined Contribution (DC)
Outline

    1. Market Environment and Investment Results
    2. Reviewing Investments
    3. Procedures & Deadlines

Copyright Sompo Japan DC Securities Inc        4
Pension Seminar Defined Contribution (DC)
1 Market Environment and
               Investment Results

                                          .
Copyright Sompo Japan DC Securities Inc
Pension Seminar Defined Contribution (DC)
Price movements of major assets over the past
decade
                                          Record date: end of February 2022

Copyright Sompo Japan DC Securities Inc                                       6
Pension Seminar Defined Contribution (DC)
Risk/Return of Investment Trusts

     <Risk/Return by asset class>
                          Pursuit of a higher return is accompanied by higher risk.

                                      If the risk is minimized, a higher return cannot be expected.

     *In addition to the above, there are investment trusts which invest in asset classes other than equities and bonds (real
     estate investment trusts (REIT), etc.).

Copyright Sompo Japan DC Securities Inc                                                                                         7
Pension Seminar Defined Contribution (DC)
Stock Price Index
(Past 10 years from March-end 2012 to March-end 2022)
            TOPIX       (JP)              S&P500 (USA)                  FTSE100 (U.K)                   DAX30 (DE)
   400

   350
                                                                                                             321.7
   300

   250
                                                                                                             227.8
   200                                                                                                       207.5

   150
                                                                                                             130.3
   100

      50

        0
            '12/3              '14/3               '16/3              '18/3               '20/3           '22/3
The above chart shows movements of stock price indices until the end of March, 2022,
using the price at the end of March 2012 as 100
This information is provided as an informational and referential purposes only and is not intended as

                                                                                                                     8
a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc
Pension Seminar Defined Contribution (DC)
Price Fluctuations of Investment Products(Japanese
Equities)
                                     DIAM Japanese Equity Index Fund
                                     Sumitomo Mitsui Value Equity Pension Fund
                                     Fidelity Japan Growth Fund
            220

            190

            160

            130

            100

              70
                    '17/08 '18/02 '18/08 '19/02 '19/08 '20/02 '20/08 '21/02 '21/08 '22/2
The above chart shows price fluctuations until the end of Mar. 2022, using the price at the end of Aug. 2017 as 100.

This information is provided as an informational and referential purposes only and is not intended as

                                                                                                                       9
a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc                                                   As of End of March, 2022
Pension Seminar Defined Contribution (DC)
Price Fluctuations of Investment Products(Foreign
Equities)
                            Index International Equity               Asahi Nvest Global Value

            220

            190

            160

            130

            100

              70
                    '17/08 '18/02 '18/08 '19/02 '19/08 '20/02 '20/08 '21/02 '21/08 '22/2
                                                                                  As of End of March, 2022
The above chart shows price fluctuations until the end of Mar. 2022, using the price at the end of Aug. 2017 as 100.

This information is provided as an informational and referential purposes only and is not intended as

                                                                                                                  10
a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc
Foreign Exchange
(Past 10 years from March-end 2012 to March-end 2022)

                                                   USD           Euro
             Yen
   160
                                                                                                            Weaker
   140                                                                                                       Yen
                                                                                                        136.70

   120 109.8                                                                                            122.39

   100
          82.19
     80

                                                                                                            Stronger
     60
           '12/3              '14/3               '16/3               '18/3               '20/3          '22/3 Yen
The above chart shows movements of foreign exchange rates from the end of March 2012 to the end of March 2022.

This information is provided as an informational and referential purposes only and is not intended as

                                                                                                                 11
a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc
Long-term Interest Rate
(Past 10 years from March-end 2012 to March-end 2022)
                                                JP         U.S.A           Germany
        3.5%
        3.0%
        2.5% 2.210%                                                                                        2.338%
        2.0%
        1.5% 1.790%
        1.0%
                                                                                                           0.548%
        0.5% 0.990%
        0.0%                                                                                               0.220%
       -0.5%
       -1.0%
                  '12/3               '14/3               '16/3                '18/3               '20/3     '22/3

The above chart shows movements of long-term interest rates from the end of March 2012 to the end of March 2022.

 This information is provided as an informational and referential purposes only and is not intended as

                                                                                                                     12
 a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc
Price Fluctuations of Investment Products(Foreign Bonds)

                                                  Index International Fixed Income

          220

          190

          160

          130

          100

            70
                  '17/8     '18/2         '18/8    '19/2     '19/8      '20/2      '20/8      '21/2     '21/8   '22/2
The above chart shows price fluctuations until the end of Mar. 2022, using the price at the end of Aug. 2017 as 100.

This information is provided as an informational and referential purposes only and is not intended as

                                                                                                                        13
a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc                                              As of End of March, 2022
Price Fluctuations of Investment Products(J-REIT,
Foreign REIT)

                MHAM J-REIT Index                        Nomura J-REIT                     Nomura World REIT

       220

       190

       160

       130

       100

         70
              '17/8     '18/2      '18/8     '19/2      '19/8      '20/2      '20/8      '21/2      '21/8   '22/2

The above chart shows price fluctuations until the end of Mar. 2022, using the price at the end of Aug. 2017 as 100.

This information is provided as an informational and referential purposes only and is not intended as

                                                                                                                    14
a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc                                                 As of End of March, 2022
Price Fluctuations of Investment Products(Balanced)

                          DC Index Balance80                                         DC Index Balance60
                          DC Index Balance40                                         DC Index Balance20
       220

       190

       160

       130

       100

         70
              '17/8      '18/2      '18/8      '19/2       '19/8       '20/2      '20/8       '21/2     '21/8

The above chart shows price fluctuations until the end of Mar. 2022, using the price at the end of Aug. 2017 as 100.

This information is provided as an informational and referential purposes only and is not intended as

                                                                                          As of End of March, 2022 15
a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc
Changes of Interest Rates in Principal Guaranteed Products
(Past 10 Years)

         DC Guaranteed Principal plus                     Seven Bank DC Deposit 3 Year Fixed
         Accident Insurance
 0.180%
                       0.170%
 0.160%
 0.140%
 0.120%
                0.091%
 0.100%
 0.080%
 0.060%
 0.040%
 0.020%                                                                                               0.011%
                                                                                                      0.010%
 0.000%
               '12/3     '13/3    '14/3   '15/3   '16/3    '17/3   '18/3   '19/3   '20/3   '21/3   '22/3

  The above chart shows the changes of interest rates from March-end, 2012 to March-end, 2022.
Copyright Sompo Japan DC Securities Inc                                                                    16
Investing ¥10,000/month
Assumption: Invest ¥10,000 every month in each product at month-end price
  Last 10 years                                                                Since plan implementation
 (cumulative contributions: ¥1,200,000)                                          (cumulative contributions : ¥560,000)
   Period: Apr. 2011 – Mar. 2022                                                 Period: Aug. 2017 – Mar. 2022
   DC Guaranteed Principal plus Accident…                       120.0                                    56.0
     Seven Bank DC Deposit 3 Year Fixed                         120.3                                    56.0
                       DC Index Balance80                            189.3                                  69.4
                       DC Index Balance60                           170.8                                  65.9
                       DC Index Balance40                         154.2                                   62.5
                       DC Index Balance20                        138.0                                   59.0
                      DIAM JP Equity Index                           187.6                                 67.2
                     SumitomoMitsui Value                           173.9                                  65.8
                          Fidelity JP Growth                          194.8                                67.4
                 Index International Equity                                    266.0                           88.3
                  Asahi Nvest Global Value                                 212.3                             78.5
         Index International Fixed Income                         141.3                                   60.5
                        MHAM J-REIT Index                           173.0                                  65.5
                             Nomura J-REIT                           189.2                                 67.1
                       Nomura World REIT                               209.3                                  80.4
 This information is provided as an informational and referential purposes only and is not intended as
 a solicitation for investment. Past performance is no guarantee of future results.
Copyright Sompo Japan DC Securities Inc                                                                           17
Ref. Investment Performance by Product
                                          Period ending March, 2022

Copyright Sompo Japan DC Securities Inc                               18
Ref. Investment Performance by Product
                                          Period ending March, 2022

Copyright Sompo Japan DC Securities Inc                               19
AnswerNet Product Lineup

                               Product Lineup
                                                   ・Investment Product
                                                    Lineup
                                                   ・Performance Sheet
                                                   ・Market Commentary

                     Click on the product name to access the detailed information
Copyright Sompo Japan DC Securities Inc                                      20
AnswerNet Investment trusts
                                                          ・Investment
                                                           Product Guide
                                                          ・Data Sheet
                                                          ・Monthly Returns
                                                          ・Prospectus
                                                          ・Fund reports, etc.

                  21,453                  -169   21,622

Copyright Sompo Japan DC Securities Inc                                    21
AnswerNet Investment trusts
        【Data Sheet】                      (Only in Japanese)

                                                               Comparing the performance of
                                                               funds and their benchmarks

Copyright Sompo Japan DC Securities Inc                                                       22
2.Reviewing Investments

                                          .
Copyright Sompo Japan DC Securities Inc
Investing through DC Plan
     Make investments based on the cycle below:
                                                     Determine investment
                                                     strategy (asset
                                                     allocation)
         Changing contribution
                                              Planning                    Making instructions
         allocation/Switching
                                                                          to allocate your
                                                                          contributions among
                                                                          the products
                                                                Start
                                 Reviewing                    investing

                                                                      Monthly contributions
                    Rebalancing
                    Reallocation               Checking
                                             current status

                                      AnswerNet/AnswerCenter
                          “Personal Financial Statement” mailed every July

Copyright Sompo Japan DC Securities Inc                                                         24
Reviewing Investments
    Check your investment performance and asset allocation status even after you
    start investing.

                                                   <Notice of Temporary Change in
                                                   Operating Hours at AnswerCenter>
                                                    Weekdays 16:00-18:00
                                                    Weekends/Holidays Closed
            Issued annually in July

Copyright Sompo Japan DC Securities Inc                                               25
Items to Check

      Current asset allocation status

      【Asset Allocation Worksheet】             【AnswerNet】
      Initial asset allocation            Current asset allocation

                                          Compare

     The asset allocation status
     may have changed due to the
     price fluctuation of each asset.

Copyright Sompo Japan DC Securities Inc                              26
Change of Asset Allocation Due to Market Conditions

    Generally, the asset allocation status changes due to price
    fluctuations of equities.
                         * Illustrative image
        Price                         JP Equities
    fluctuations                      JP Bonds
                                      Foreign Equities
                                      Foreign Bonds

  Asset                                                                                   Percentage                             Percentage
                                                                                          of equities                            of equities
  balance                                                                                    larger                               smaller
                                                                Bonds
                     Bonds       Equities
                      50         50                                                                           Bonds   Equities
                                                                             Equities

      This information is provided as an informational and referential purposes only and is not intended as
      a solicitation for investment. Past performance is no guarantee of future results.

Copyright Sompo Japan DC Securities Inc                                                                                                        27
Points When Reviewing Investments
     (1)Check the current asset allocation status.
     (2)Check if there has been any change in your investment strategy
      itself.
      *Pie charts represent illustrative image of asset value (%)

                                                                    (1)

                                            (2)

Copyright Sompo Japan DC Securities Inc                                   28
Reviewing Investments (1) Rebalancing
     Rebalancing means adjusting your asset allocation back to its
     original state based on your initial investment strategy.
      * Pie charts represent illustrative
      image of asset value (%)                       Bonds Equities
                                                   Initial Allocation
               Rise in stock prices                 A:50       B:50%           Decline in stock prices
               →% in total asset value
               increased
                                                     %                         →% in total asset value
                                                                               decreased
                 → Higher Risk                                                  → Lower Risk

                 A:40%                                                                          B:40%
                               B:60%                                                A:60%

           Rebalancing has the effect of adjusting changes in the risk derived from changes in asset allocation.

Copyright Sompo Japan DC Securities Inc                                                                            29
Reviewing Investments (2) Reallocation
     Reallocation means changing your asset allocation by taking
     into consideration the changes in your investment strategy
     resulting from age, etc.
            20’s             30’s         40’s   50’s   60’s

         e.g.) Asset allocation may be changed due to the following
         reasons:
         • Aging (shorter time horizon to invest)
         • Life changes
         •       (marriage, birth of child, home purchase, etc.)
         • Experience in investing
         • Market conditions
         Returns (gains) and risk tolerance should be reviewed.

Copyright Sompo Japan DC Securities Inc                               30
3.Procedures & Deadlines

                                          .
Copyright Sompo Japan DC Securities Inc
Two Ways to Change Products
Target is different between the two procedures.
If you wish to change asset allocation and product(s), you need to
take both procedures.
                                          1. Asset allocation
                                             change
                                                                    2. Switching

                                              Future               Currently held
              Target
                                            contributions            products

                                                                 Partial redemption
                Fee                              N/A                   charge
                                                                 (Only one product)
                                           Day before
           Deadline                  monthly contribution date   Each business day

        Realization
                                                                     Upon selling
        of gain/loss
Copyright Sompo Japan DC Securities Inc                                               32
Contact Information

                                           <Notice of Temporary Change in Operating Hours at
                                           AnswerCenter>
                                           Weekdays 16:00-18:00 Weekends/Holidays Closed
   3. Tsumitate Navi
   (Smartphone app)
            *Only in Japanese

                                          QR code for the AnswerNet of
                                           Sompo Japan DC Securities

Copyright Sompo Japan DC Securities Inc                                                        33
AnswerNet Login Step
    DC Securities                         Go

                                                                          “Notice of Opening an Account”

                                                                         ID・Password

                              Click to log in
                                                                                    Enter

                                                                    Reissue password

* If you forgot or lost your ID, please contact the AnswerCenter. If you forgot or lost only password,
 please click “Reissue password” on the AnswerNet main page. A new password will be issued.
Copyright Sompo Japan DC Securities Inc                                                              34
Confirming ID on Account Statement

                             0123456789

                                          Mailed every July
Copyright Sompo Japan DC Securities Inc                       35
AnswerNet - Main Page -

                                          【Menu bar】

          【When you are lost】
          Click here when you need to
          know how to use the website.

Copyright Sompo Japan DC Securities Inc                36
Changing Contribution Instructions

                                                Contribution Instructions

                                          Change investment products to be
                                          purchased with future contributions
                                          and their allocations.
                                          Deadline falls on the day before the
                                          next contribution date.

Copyright Sompo Japan DC Securities Inc                                          37
Changing Contribution Instructions

                                          2. Set asset allocations for
                                             investment products you
                                             desire to purchase by 1%.
                                             They need to be totaled to
              1. Confirm current             100% at all times.
                 asset allocation.

                                                     3. Click [Confirm]
                                                        button below when
                                                        finished entering.
                                                     ↓

Copyright Sompo Japan DC Securities Inc                                   38
Switching

       Sell currently held products       Switching
       and purchase other products
       with the sales proceeds.

                                           As for the number of days
                                           required for switching (number
                                           of days from selling to
                                           purchasing), please see here.

Copyright Sompo Japan DC Securities Inc                                     39
Switching

                                          Switching
                                                                        Accepted on every
                                                                        business day

                                               Step1. Selecting a product to sell

                                               Step2. Determining the number
                                               of units to sell or the amount in
                                               yen
                                           ※The selling amount and the type of sale differ depending on the product.

                                               Step3. Selecting a product to buy

Copyright Sompo Japan DC Securities Inc                                                                                40
Switching
                                                  Select a product(s) to purchase
                                                  with the sales proceeds.

                                                              Purchase

                  You can select multiple products to
                  purchase at one time.
                  In the “Share” column, enter the percentage by
                  1% increments with the total amount
                  representing 100%.
                  Ex.) For 1 product, enter 100
                  Ex.) For 2 products, enter 50,50, etc.

Copyright Sompo Japan DC Securities Inc                                             41
Switching

                                          View History: Confirm
                                            transaction details

                                                         Date selling
                                                         price determined

                                                          Date purchasing
                                                          price determined

                          取引内容を確認をして
                          実行ボタンを押します                              Submit
Copyright Sompo Japan DC Securities Inc                                42
Application for Participant Contributions

                                          Application for Participant
                                          Contributions

                                                       ・New application
                                                       ・Amount change

                                                     ・Suspension of
                                                     Contribution
Copyright Sompo Japan DC Securities Inc                                   43
Merits of Voluntary Employee Contributions
The full amount of participant contributions is subject to income
deduction, so tax burden is reduced.
     【Taxation merit related to taxable income and participant contributions】
                  Reduced tax amount=(Total tax rate of income tax and residential tax) x (annual amount of participant contributions)

                                                                                                Reduced tax amount
                                                            Total tax rate of                        (annual)
            Taxable income (annual)
                                                            income tax and
                                                                              Participant Contribution Amount
                                                             residential tax
                                                                               (in case of 10k yen/month)
      1950k yen or less                                              15%                                 18k yen
      More than 1950k yen – 3300k yen or less                        20%                                 24k yen
      More than 3300k yen – 6950k yen or less                        30%                                 36k yen
      More than 6950k yen – 9000k yen or less                        33%                                 39k yen
      More than 9000k yen – 18000k yen or less                       43%                                 51k yen
      More than 18000k yen – 40000k yen or less                      50%                                 60k yen
      More than 40000k yen                                           55%                                 66k yen
     ※The total rate of income tax and residential tax as of Jan 2022. The special income tax for reconstruction is not
     considered.

                                                                                                                                         44
     ※ Taxable income = Salary income – Amount of employment income exemption – Other income exemptions
Copyright Sompo Japan
     ※ Fractions       DC Securities
                 less than  1,000 yenIncare rounded down.
Image of Using Tsumitate Navi (Only in Japanese)

        ・“Risk tolerance level” of each participant can be assessed by a robo-advisor.
        ・Based on the recommendation of investment products which suit your risk tolerance
        level, you can execute and complete the procedures to change products.
                                                                STEP2
                    STEP1                                                                                                STEP3
                                                             Assessment・
                 Confirmation                              Recommendation
                                                                                                                        Execution
         Participants can confirm asset balance,   By using a robo-advisor, participants can get           Based on assessment results, participants can
         monthly contributions, approximate        an assessment of asset allocation and                   take procedures to change investment
         cumulative contributions, etc.            investment products suitable for their needs.           products, etc.

                                                                    ※ Screen images above are for illustrative purposes only and are subject to change.

Copyright Sompo Japan DC Securities Inc                                                                                                                    45
Downloading and Registration of Tsumitate Navi
  (Only in Japanese)

       Have these three ready!

 ・AnswerNet Login ID
       10-digit “Participant Code”
                                          App Store is a trademark of Apple Inc.
                                          iOS is the name of the operating system of Apple Inc. iOS is a

 ・AnswerNet Password
                                          trademark of Cisco Systems Inc. and is used under license. Android,
                                          Google Play and Google Play logo are trademarks of Google LLC.

       A temporary password needs to be changed.
                                          Click here to download the app.
 ・Email address
     Please set up to receive
     messages from the domain
     @tsumi-navi.sjdc.co.jp.

 Once you register, you don't need to enter the above information
 for a certain period of time from the next login!
Copyright Sompo Japan DC Securities Inc                                                                  46
Thank you !

Copyright Sompo Japan DC Securities Inc                 47
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