Retirement Savings Plans

Investment in a retirement savings plan, whether on the form of a fund (FPR) or an insurance (PPR), is intended to prepare your future, in particular your retirement. It is also a saving that allows you to set up a financial reserve to deal with a serious and unforeseen situation such has long-term unemployment, permanent incapaciy to work or a serious illness.

At the same time, retirement savings plans enjoy a more favorable tax environment than most savings and investment products, either by deducting part of the investment from IRS collection or by having a more reduced retention rate of income tax.

The retirement savings plans are still an instrument of succession planning of your estate inheritance.

PPR can only be refunded, totally or partially redeemed, at the request of the Insured Person or Participant.

The PPR refund can be made when the Insured Person or Participant is in one of the following situations:

• Retirement for old age of the Insured Person or Participant.
• From the 60 years of the Insured Person or Participant.
• Long-term unemployment of the Insured Person, Participant or any member of their household.
• Permanent incapacity to work of the Insured Person, Participant or any member of their household, whatever the cause.
• Serious illness of the Insured Person, Particpant or any member of their household.
• Use for payment of installments of credit agreements secured by mortgage of property destined to own and permanent housing of the Insured Person or Participant.

Refund under these conditions can only be verified for deliveries / subscriptions for which 5 years have elapsed since the date of payment. However, after a period of 5 years from the first delivery's date of payment, you may only request reimbursement of your contract if, in the first half of the contract, at least 35% of the deliveries have been paid.

In situations in which the PPR is a common property under the property regime of the couple, it refers to the personal situation of either spouse, reimbursement being allowed when the Spouse retires for old age or reaches the age of 60, provided that it is five years after payment of the respective deliveries. In situations where at least 35% of the premiums were paid during the first half of the contract, reimbursement may be requested after 5 years have elapsed from the date of the first delivery.

Outside of the legally established situations previously identified, a full or partial repayment of the PPR is allowed. However, this has fiscal implications as defined in Article 21 (4) and (5) of the Estatuto dos Benefícios Fiscais, which may imply the refund of the tax benefits by deduction of collection enjoyed, plus a penalty for each year elapsed, and application of a withholding tax rate on capital income at the highest IRS. Thus, as the possibility of the refund is subject to a ransom or redemption charge.

The GNB PR Aforro Seguro is intended in particular for non-professional investors with the following characteristics:

The balance of the policy is invested in the Fundo Autónomo de Investimento "PPR Fund". The constitution of the assets of the fund is framed in the legislation in force, in accordance with management guiding principles that focus on profitability and security, being that the main features of the fund's financial management are as follows:

• Investments will primarily be directed to the European market and to euro-denominated applications in instruments that provide stable income, such as fixed or floating rate bonds, real estate or when advisable money market instruments.
• Variable-income assets may not exceed 40% of the net value of the autonomous fund.
• The limit for securities which are not admitted to trading on a stock exchange or another regulated market of a Member State of the European Union or on an analogue market of a European Union country or on an analogue market of OECD countries is set at 10% of the cash value of the autonomous fund.
• Whenever the investments are made in a currency other than the euro, the hedge of the currency risk may be done.
• The possibility of using derivative financial instruments and report and lending operations of securities is permitted, whenever such operations are appropriate to the objectives of the Autonomous Fund.

The Insured Person may use the Autonomous Fund in other PPR than the GNB PPR Aforro Seguro.

Investments in PPR are tax deductible by 20% for the unmarried tax payer or by each married tax payer not legally separated. Tax deduction limits are:

Additionally, the sum of the tax benefits that are taxable cannot exceed the limits established for each taxable income ranking, as per the following:

Investments made after retirement are non-deductible, nor are payments by third parties payments, except when by employers on behalf of employees (no. 8, article 21 of the Portuguese Tax Incentives Statute).

Taxation on income

Income is subject to IRS at the moment of its payment, under the following conditions:

• On payments foreseen by law (including in the event of death) the income is taxed at the minimum rate of 8% (if payed in capital), or according to category H (Pensions) rules (if payed periodically).
• On reimbursements not foreseen by law, income is taxed at 8.6% (if it occurs after the eighth year) or 17.2% if between the fifth and the eighth year, provided at least 35% of the investment was done in the first half of the contract. Otherwise, tax is of 21.5% if the reimbursement occurs up to the fifth year. Taxation on income depends on the date that the reimbursed investments were made, same conditions from the subscription applied.
• In the event of a partial reimbursement, first investments are the first to be paid.