FIM 2017 Retirement Symposium

FINANCIAL INFORMATION MONTH 2017

RETIREMENT SYMPOSIUM Wednesday, 25 October 2017 - Sir Cecil Jacobs Auditorium, ECCB Headquarters

Tasha Hendrickson St Christopher and Nevis Social Security Board

INTRODUCTION

Zahnela Claxton Director, Youth Affairs Depart., Nevis Island Administration

PRAYER

Trevor Brathwaite Deputy Governor, Eastern Caribbean Central Bank

WELCOME REMARKS

SESSION 1

FROM WORK TO RETIREMENT Preparing for a Smooth Transition Dr Robertine Chaderton , Financial Consultant/Educator Discussant: • Latoya Matthew-Duncan, Nutrition Surveillance Coordinator, Health Promotion Unit, Ministry of Health

DISCUSSION

SESSION 2

FINANCIAL PLANNING Creating, Growing and Protecting Your Wealth Percival Hanley , General Manager - Brimstone Hill Fortress National Park Society Discussants: • Donovan Herbert , Manager, Statistics and Research Department - St Christopher and Nevis Social Security Board • Tarlie Francis , Senior Manager, Market Operations Division - Eastern Caribbean Securities Exchange

DISCUSSION

SESSION 3

WILLS AND ESTATE PLANNING Protecting Your Loved Ones and Your Inheritance Delano Bart QC , Attorney at Law

DISCUSSION

About Financial Information Month

ECCU Member Countries

Financial Information Month (FIM) is a regional financial, economic, business and entrepreneurial education campaign executed in the Eastern Caribbean Currency Union (ECCU) since 2002. It is a collaborative effort of the Eastern Caribbean Central Bank (ECCB), ECCU member governments, financial and academic institutions, the media, other private and public sector institutions and community based groups. FIM forms part of an ECCU financial and economic education programme coordinated by the ECCB. The programme incorporates a series of initiatives designed to support the attainment of the goal of “a financially developed and vibrant ECCU region that fosters strong and sustainable economic growth and the improved well-being of the citizenry.”

FIM 2017 Theme and Logo

Retirement Planning: Making Your Golden Years Golden

The theme is geared towards sensitising the public on the realities of retirement for current and future generations of retirees and providing information on the actions they need to take now to help ensure a good quality of life during their “golden years”. This message is depicted in the logo which shows human figures of increasing sizes walking along a colourful

pathway that ends with a pot of golden eggs. The human figures convey the message that retirement planning should start from the first day of employment and continue throughout one’s income earning years. The colourful pathway is an artistic interpretation of a rainbow and plays on the adage that at the end of a rainbow there is a pot of gold. The pot of golden eggs signifies that there are rewards to be gained from planning for retirement.

Sponsors

The Bank of Nevis Ltd

FROM WORK TO RETIREMENT Preparing for a Smooth Transition ECCB Forum 2017 Financial Information Month Robertine Chaderton PhD,FCCA, CFE

Caribbean Consulting Group

Issues to be considered

FINANCIAL Well -being

PHYSICAL Well -being

EMOTIONAL Well being

Caribbean Consulting Group

FINANCIAL WELL-BEING

• Lifestyle during working years • Saving and spending habits • Growth of your nest-egg (wealth planning) • Family arrangements • Health • Preparation for retirement

Caribbean Consulting Group

INCOME ( Salary /wages, pension, social security, interest, dividends, other- rental income) Less EXPENSES (Food, clothing, housing, transportation, utilities, entertainment, travel)

Caribbean Consulting Group

DO YOU KNOW HOW MUCH IT COST YOU TO LIVE TODAY?

Caribbean Consulting Group

DO YOU REALISE HOW YOUR INCOME AND EXPENSES WILL CHANGE IN RETIREMENT?

Many persons have to live on less than 2/3 of their salary

Caribbean Consulting Group

WHAT ARE YOU WORTH? Assets Minus Liabilities

Caribbean Consulting Group

ASSETS What do you own?

LIABILITIES What do you owe?

Caribbean Consulting Group

THINK!

THINK!

HOWMUCH WILL I NEED?

HOWMUCH SHOULD I SET ASIDE ?

HOW LONG WILL MY MONEY LAST?

Caribbean Consulting Group

WHEN DO YOU START THINKING ABOUT

RETIREMENT?

WHEN YOU GET YOUR FIRST JOB

Caribbean Consulting Group

PHYSICAL WELL-BEING

• Retirement is sometimes brought on by ill health • Health is the joker in the pack – ill health often gives no warning • When, how and what do you eat? • How much rest and relaxation ( freedom from stress) do you get? • Do you have medical insurance from your job?

Caribbean Consulting Group

EMOTIONAL WELL-BEING

What is your definition of ‘retirement’?

“ Sitting in an armchair waiting to die”

“ A time to do things you never had time for while working”

“ Start of a new career ”

Caribbean Consulting Group

THE RETIREMENT PROCESS

• 1 Year to Relax and make some decisions

• 10 - 15 years actively doing a new activity – window of opportunity

• 6 - 10 years slowing down

• 3 – 5 years assisted living ( at your home or in a seniors’ home)

Caribbean Consulting Group

THE PHASES OF RETIREMENT

• ACKNOWLEDGEMENT

• ACCEPTANCE

• DISENGAGEMENT

• REDEFINITION

Caribbean Consulting Group

ACKNOWLEDGEMENT

• Retirement age of your organisation • Honestly assess your career. How satisfying is the work you are doing? • Estimate your benefits from the organisation – pension, medical insurance, car, housing • Determine what you want out of life, write down your goals; be sure to involve others who might be affected • Visit with friends who have recently retired

Caribbean Consulting Group

ACCEPTANCE

• Your retirement date • Career prospects • Family responsibility • Financial status • Health • Time management – if you have no plan or alternative activities to replace work, you end up hanging out at pensioners bar ( avoid the alcohol)

Caribbean Consulting Group

DISENGAGEMENT

• Handing over • Completing a project • Tapering off • Announcement your Retirement • Clearing out your work space • Your last day at work • Your retirement function - a celebration

Caribbean Consulting Group

REDEFINITION

Transition at home

Who is at home?

Your inner circle

Should I move?

Where will you live?

Should I stay?

What will I do with my time?

Develop other interests

Good listener? The art of conversation

What kind of person am I ?

Caribbean Consulting Group

Negative Emotions of Retirement

• GRIEF • REJECTION – Professional, Personal, Internal • FEAR - Of the Unknown, Loss of Identity and Power, Financial Need, Aging & Mortality • ANGER • GUILT

Caribbean Consulting Group

HOW TO MAKE A SMOOTH TRANSITION TO RETIREMENT • Attend a retirement planning seminar where you work on your personal situation • Join the soon to be launched St Kitts Nevis Association of Retired Persons (SKNARP) • For information on above - Contact: Dr Robertine Chaderton Caribbean Consulting Group Tel: 869-465-1011/869-662-4230 Email: drchad13@gmail.com www.http//robertinechaderton.com

Caribbean Consulting Group

Caribbean Consulting Group

HEALTH AND WELLNESS By Latoya Matthew – Duncan Nutritionist

WHO DEFINITION OF HEALTH (1948)

Health is a state of complete physical, mental and social wellbeing and not merely absence of disease or infirmity .

AVERAGE LIFE EXPECTANCY

Thanks to public health

for the extra

25 years of life!

NEW PHILOSOPHY OF HEALTH

In recent years we acquired new philosophy of health • Health is a fundamental human right • Health is intersectoral • Health is an integral part of development • Health is central to the concept of quality of life • Health involves individuals, state and international responsibility • Health is the essence of productive life, and not the result of ever increasing expenditure on medical care • Health and its maintenance is a major social investment

WELLNESS DEFINITION

• "The extent to which an individual or group is able to realize aspirations and satisfy needs, and to change or cope with the environment. Health is a resource for everyday life, not the objective of living; it is a positive concept, emphasizing social and personal resources, as well as physical capacities."

( Health promotion: a discussion document . Copenhagen, WHO, 1984.)

BEHAVIORS THAT CONTRIBUTE TO WELLNESS

• Be physically active • Choose a healthy diet • Maintain a healthy body weight • Manage stress effectively • Avoid tobacco and drug use and limit alcohol consumption • Protect yourself from disease and injury

REACHING WELLNESS THROUGH LIFESTYLE MANAGEMENT

• Getting started: • Examine your current health habits • Choose a target behavior • Obtain information about your target behavior • Find outside help if needed

BUILDING MOTIVATION TO CHANGE

• Examining the pros and cons of change • Boosting self-efficacy—the belief in one’s ability to take action • Locus of control: internal versus external

• Visualization and self-talk • Role models and buddies • Identifying and overcoming key barriers to change

PUTTING YOUR PLAN INTO ACTION

• Commitment • Strategies from behavior change plan

• Belief that you are the “boss” • Change-friendly environment

• Support • Rewards • Congratulate yourself

STAYING WITH IT

• Social influences • Levels of motivation and commitment • Choice of techniques and level of effort • Stress barrier • Procrastinating, rationalizing, and blaming

BEING FIT AND WELL FOR LIFE

• First attempts may only involve the planning stage • Need to develop certain skills • Do not expect to master everything quickly and with ease

INDIVIDUAL RESPONSIBILITY

• Although health is now recognized as a fundamental human right, it is essentially an individual responsibility. It is to be earned and maintained by the individual himself/herself • Self care – all activities individuals undertake in promoting own health, preventing their own disease, limiting their illness and restoring their own health

• Self care activities relating to diet, sleep, exercise, weight, smoking, drugs

99

P LANNING FOR R ETIREMENT NOW!

Percival Hanley October 25, 2017

What is Retirement?

• The point where a person stops employment completely • May come by way of age – 55, 60, 62, 65 • Or forced early through physical disability • Some may semi-retire by reducing working hours or engaging is less stressful work • For financial reasons (eg. No pension or Social Security) many people continue working until death in order to sustain themselves. • Greater wealth leads to earlier retirement

How do people sustain themselves during Retirement? • State pensions (Gov’t) • Occupational Pensions (Companies) • Private Savings and Investment • Donations (eg. By children) • Social Benefits such as a Social Security Scheme/National Insurance Scheme • Income from Rent, Dividends, Investments, Business

When does an individual begin saving/planning for Retirement?

• As soon as he/she begins to work!! • The earlier you begin to plan/save/invest the better off you would be at retirement • And the less stressful the process would be than if you started late • If you Have not yet started, the best time to do so is NOW! • Make it a priority!!

What is your Retirement Plan?

 NONE – something must work out!  Have lots of children – they will support me!  Rely on Social Security Benefits only  Keep on working till I drop down  Save & Invest now and continuously to ensure an adequate to comfortable source of income throughout retirement

How Long is Retirement?

 Depends on when one retires  Depends on one’s state of health  Depends on longevity prospects

 May range from 15 to 30 years (or more!)

 Of course, it is better to be safe than sorry, so plan for the maximum time! You can’t go wrong.

So, How does one Plan for Retirement? • SAVINGS

- Start early - Don’t stop!

- Minimum of 10% of Gross salary/wage - Invest in as high yielding an account as possible - The miracle of compounding - Make it as “untouchable” as you can - Convert savings occasionally to even better investments - ensure the yield is greater than the rate of inflation

Savings Calculator

Monthly Deposit with Monthly Interest payment

Int. Rate:

3.00%

Monthly Deposit

500.00

Month

Deposit

Interest

Balance

12 60

500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00

15.21 80.81

6,098.40 Year 1

32,404.17 Year 5 Amt Deposited so far : 70,045.40 Year 10 Amt Deposited so far : 113,770.06 Year 15 Amt Deposited so far : 164,561.38 Year 20 Amt Deposited so far : 223,561.43 Year 25 Amt Deposited so far : 292,096.84 Year 30 Amt Deposited so far : 371,708.76 Year 35 Amt Deposited so far : 464,187.26 Year 40 Amt Deposited so far :

30,000.00 60,000.00 90,000.00 120,000.00 150,000.00 180,000.00 210,000.00 240,000.00

120 180 240 300 360 420 480

174.68 283.72 410.38 557.51 728.42 926.95

1,157.57

So, How does one Plan for Retirement?

• Investment

- Term Deposits - Stocks & shares - Treasury Bills - Bonds - Real Estate - Business Consider the risks of each carefully

So, How does one Plan for Retirement? • Maintain good credit rating during your career years • Plan to have major debts paid off by retirement eg. Mortgages, Cr. Cards, Education loans • Ensure you have a good Medical Insurance Scheme • Term Life Insurance maturing around Rtmt Date • Turn your talents, skills, hobbies into income earning business • Make use of pension plans by your employer • Plan to have children early

How much is enough?

• One Rule of Thumb is to have enough to give you at least 65 -70% of your pre-retirement annual income to live comfortably • Another Rule of thumb is to ensure you have sufficient to allow about 4% withdrawal per annum from your retirement savings • You can use online retirement savings calculators to give you an idea of what suits your lifestyle

When You Retire

• Do plan to enjoy retirement! • Some people do things they didn’t have the time or money to do before, like travel • You may need to reduce your expenses once you retire depending on lifestyle • Don’t forget to plan re health issues • Manage your retirement funds wisely

BUDGET COMPARISON

LAST INCOME PRIOR TO RETIREMENT INCOME AFTER RETIREMENT

Salary

5,000.00

Social Security

3,000.00

1,500.00 ? 800.00 ?

Less SS/SL

400.00

Pension?

Rent Income?

Net

4,600.00

EXPENSES

EXPENSES

Rent/Mortgage

1,500.00

1,500.00

Loans

800.00 500.00

800.00 500.00

Insurance

Food & Gen. Shopping

1,000.00

1,000.00

500.00

Utilities

500.00

Total Expenses

4,300.00

Net

300.00

Q UESTIONS ?

THANK YOU!

Calculating Your SSB Age Pension

You did the hard part already…

KEY ELEMENTS of the SSB Age Pension

• Three (3) Best Years • 3 best contribution years from the last 15 years

• Average Annual Wages [3 Best Years]

• Replacement Rate

SSB Sample Earnings Profile

ANANSI SPIDERMAN

Contribution Weeks

Contribution Weeks

Year(s)

Wages

Year(s)

Wages

1994 - 2001

347

$225,550.00

2010

52

$60,960.00

2002

52

$49,980.31

2011

52

$60,960.00

2003

52

$50,246.84

2012

53

$68,014.99

2004

52

$52,050.56

2013

48

$47,640.77

2005

52

$54,396.37

2014

50

$52,140.91

2006

52

$56,014.07

2015

51

$52,140.34

2007

53

$59,874.33

2016

52

$61,920.00

2008

52

$61,020.00

2017

52

$61,920.00

2009

52

$60,270.41

---

---

---

Career Earnings

Best Years

$1,135,099.90

2012, 2016, 2017

Contribution Weeks

Total Wages [Best Years]

1,174

$191,854.99

Replacement Rate

Avg. Best Years

???

$63,951.66

SSB Sample Pension Calculation

D.O.B 22-October-1955 62 nd Birthday 22-October-2017

ANANSI SPIDERMAN

Total Contributions 1,174 Rate of Pension 48%

Contributions Replacement Rate Contributions Replacement Rate 500 - 549 30% of wages 1,150 - 1,199 48% of wages

Three Best Years

550 - 599

32% of wages

1,200 - 1,249

49% of wages

2012 [53 Weeks]

$68,014.99

600 - 649

34% of wages

1,250 - 1,299

50% of wages

2016 [52 Weeks]

$61,920.00

650 - 699

36% of wages

1,300 - 1,349

51% of wages

2017 [52 Weeks]

$61,920.00

700 - 749

38% of wages

1,350 - 1,399

52% of wages

Total Wages $191,854.99

=

750 - 799

40% of wages

1,400 - 1,449

53% of wages

800 - 849

41% of wages

1,450 - 1,499

54% of wages

= $191,854.99 ÷ 3

Avg. Annual Wage

850 - 899

42% of wages

1,500 - 1,549

55% of wages

= $63,951.66

900 - 949

43% of wages

1,550 - 1,599

56% of wages

950 - 999

44% of wages

1,600 - 1,649

57% of wages

= $63,951.66 x 48%

Annual Pension

1,000 - 1,049

45% of wages

1,650 - 1,699

58% of wages

= $30,696.80

1,050 - 1,099

46% of wages

1,700 - 1,749

59% of wages

1,100 - 1,149

47% of wages

1,750 - 1,799

60% of wages

= $30,696.80 ÷ 12 = $2,558.07

Monthly Pension

We keep looking up for your benefit…

Thank You!

ECSE EC-Share Index Jan 1 2005 to Present

170.00

160.00

150.00

140.00

130.00

120.00

110.00

100.00

Retirement Planning

Investment Opportunities on the ECSE

The views expressed herein are those of the presenter and do not necessarily reflect the views of the ECSE or of the presenters’ colleagues upon the staff of the ECSE

Snr Manager, Market Operations Division Tarlie Francis

#1

Retirement Planning

Investment opportunities available on the ECSE

Investing

Saving? Investing?



 Investing is putting $$$ into things

 that earn income or increase in value

 Aim is for a positive return, greater than the rate of inflation

Investing involves risk



 Risk is also about volatility

Eastern Caribbean Securities Exchange

 Regional Market: through all ECCU territories.

 Financial assets .

Diverse:

 Shares - - - - -------13 companies, across 6 countries.

 Bonds - - - --------- 1 company; 6 Governments

 Notes - - - ---------- 3 Governments

 Treasury-bills –----- 5 Governments

 Commercial Paper – 1 Company

Shares – St Kitts & Nevis

 The Bank of Nevis Ltd ……………………... $4.25

 Cable & Wireless St Kitts & Nevis Ltd …….. $3.75

 St Kitts Nevis Anguilla National Bank Ltd …. $2.50

 S. L. Horsford & Company Ltd …………….. $2.00

 TDC Ltd ……………………………………. $2.00

Shares – Other countries

Banks & Financial services sector companies

 Bank of St Vincent and the Grenadines Ltd ……. $8.50

 East Caribbean Financial Holding Company Ltd .. $4.64

 Bank of Saint Lucia Ltd

 Republic Bank (Grenada) Ltd ………………….. $45.00

 Grenada Co-operative Bank Ltd …( reference price) …... $8.80

Shares – Other countries

Utilities - energy sector companies

 Dominica Electricity Services Ltd ……… $4.00

 Grenada Electricity Services Ltd …….. $10.00

 St Lucia Electricity Services Ltd ………. $18.00

Shares – Other countries

Other companies

 Grenreal Property Corporation Ltd …….. $5.40

Grenada



 FirstCaribbean International Bank Ltd …... $4.25

Barbados



Fixed Income Securities

 Debt instruments – listed on the ECSE

ISSUER

St Vincent & the Grenadines

ECHMB

Total

Antigua & Barbuda

ISSUES

Saint Lucia

St Kitts & Nevis

Dominica

Grenada

Bonds

15

5

1

39

2

8

70

Notes

5

-

-

13

-

3

21

Treasury Bills

6

1

5

4

-

2

18

Commercial Paper

8

08

26

6

6

56

2

13

8

117

Retirement Planning

#2

Highlight the importance of investment as a viable option for building one’s “nest egg”.

Invested funds can grow and therefore match or beat inflation to preserve or increase value over time!

Why Invest for Retirement?

Importance of investment

 The Principal $$$ is working

Due to inflation,

Producing income



$1.00 today

 Interest ; dividend; capital gains

Can buy less things in the future,

 The rate of return can be positive

It is worth less.

 Preserves the value of the principal over time

Investment returns = maintaining

 Exceeds inflation > increased value

value or growing wealth

 Be mindful of the risk --

 seek professional advice

Rates of return – Fixed Income

Rates (%)

Fixed Income Instruments

2015 2016 2017

91-day Treasury bill 180-day Treasury bill 365-day Treasury bill

3.54 4.32 5.53 4.95 6.50 6.78 7.25

3.88 3.84 4.76

2.68 3.25 4.30 6.50

2-year Note 3-year Note 5-year Note 6-year Bond 7-year Bond 10-year Bond

6.50

7.00

7.00

7.00

7.50

Retirement Planning: investment as a viable option Dividend Yield - selected recent performance

Average Dividend Yield

Issuer

Year

Dividend yield

BON

2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017

1.78% 3.53% 2.00% 2.44% 0.00% 2.67%

2.65%

BOSV CWKN

2.00%

1.70%

DES

9.76%

10.00%

7.50%

9.09%

GESL

5.20%

35.20%

3.90%

14.77%

Retirement Planning: investment as a viable option

Dividend Yield - selected recent performance

Average Dividend Yield

Issuer

Year

Dividend yield

SLES

2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 2016 2017

6.00% 3.25% 3.11% 2.22% 0.00% 0.00% 9.44% 7.78% 4.50% 3.33% 3.45% 3.00%

4.12%

RBGL

0.74%

SLH

7.24%

TDC

3.26%

 Establish an account with a licensed broker-dealer - SKNANB; BON  provide a government issued photo ID and  complete the required forms. Getting Started  Discuss with the broker:  Your financial situation  Retirement goals  Available shares / debt instruments

LICENSED BROKER DEALERS

GRENADA Grenada Cooperative Bank Limited

FEDERATION OF ST KITTS AND NEVIS - St Kitts Nevis Anguilla National Bank Ltd. - The Bank of Nevis Ltd. ST LUCIA - Bank of St Lucia Ltd. - First Citizens Investment Services Limited

ST VINCENT AND THE GRENADINES Bank of St Vincent and the Grenadines Ltd.

Information & Daily Market news

www.ecseonline.com

Investments in Securities: Should be a portion only of your retirement assets. Meet your broker/ advisor soon, and discuss including some ECSE listed securities in your retirement portfolio Thank You

Thank You

MEMBER INTERMEDIARIES

INSTITUTION

CONTACT INFORMATION

ASSOCIATED PERSONS

Grenada Grenada Co- operative Bank Limited

No. 8 Church Street St. George’s

Principal Aaron Logie

Tel: 473 440 2111 Fax: 473 440 6600 Email: info@grenadaco-opbank.com

Representatives Carla Sylvester Keisha Greenidge Kishel Francis

St Kitts and Nevis St Kitts Nevis Anguilla National Bank Ltd

P O Box 343 Central Street Basseterre

Principals Anthony Galloway

Representatives Petronella Edmeade-Crooke

Tel: 869 465 2204 Fax: 869 465 1050 Email: national_bank@sknanb.com

Angelica Lewis Marlene Nisbett

The Bank of Nevis Ltd

P O Box 450 Main Street Charlestown

Principals Brian Carey Monique Williams

Tel: 869 469 5564 / 5796 Fax: 869 469 5798 E mail: info@thebankofnevis.com

Representatives Judy Claxton

St Lucia Bank of Saint Lucia

5 th Floor, Financial Centre Building 1 Bridge Street Castries

Principals Medford Francis Lawrence Jean Representatives Deesha Lewis Cedric Charles

Tel: 758 456 6826 / 457 7233 Fax: 758 456 6733

INSTITUTION

CONTACT INFORMATION

ASSOCIATED PERSONS

First Citizens Investment Services Limited

P.O. Box 1294 John Compton Highway Sans Souci Castries

Principals Norlann Gabriel Arletta Huntley-Wells

Representative Samuel Agiste Shaka St Ange

Tel: 758 450 2662 Fax: 758 451 7984

Website: www.firstcitizenstt.com/fcis E-mail : invest@firstcitizensslu.com

St Vincent and the Grenadines Bank of St

P O Box 880 Cnr. Bedford and Grenville Streets Kingstown

Principal Monifa Latham

Vincent and the Grenadines Ltd

Tel: 784 457 1844 Fax: 784 456 2612/ 451 2589 Email: info@bosvg.com

Representatives Patricia John Laurent Hadley Chez Quow