361

GOVERNMENT DECREE

of 17 October 2012

on the disclosure of key information for participants in supplementary pension savings and retirement savings

The Government decrees, pursuant to Section 170(2) of Act No. 427/2011 Coll., on supplementary pension savings, and pursuant to Section 110(3) of Act No. 426/2011 Coll., on retirement savings:

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§ 1

Subject matter

This Decree regulates a) the details, structure, format, and requirements for the linguistic expression of the disclosure of key information for participants in supplementary pension savings and the disclosure of key information for participants in retirement savings (hereinafter referred to as the "disclosure"), and b) the conditions and method of continuous updating of the disclosure and the deadlines for its publication.

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§ 2

Content of the disclosure

The disclosure contains only data and information specified or permitted by this Decree.

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§ 3

Structure of the disclosure

(1) The disclosure shall be titled "Key Information for the Participatory Fund" for the participatory fund and "Key Information for the Retirement Fund" for the retirement fund.

(2) The disclosure shall be divided into 9 parts containing the following data: a) basic data concerning the disclosure, the participatory or retirement fund, and data concerning the pension company managing the participatory or retirement fund, b) a basic description of supplementary pension savings or retirement savings, c) a description of the investment objectives and the method of investing in the participatory or retirement fund, d) the risk profile of the participatory or retirement fund, e) information on remuneration and fees relating to the participatory or retirement fund, f) information on the historical performance of the participatory or retirement fund, g) information on the depositary and other supplementary information about the participatory or retirement fund, h) information on the authorization for the activity of the pension company and on the authorization for the establishment of the participatory or retirement fund, and i) the date of publication of the disclosure.

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§ 4

Linguistic expression and display of the disclosure

(1) The disclosure must be a) prepared legibly, particularly regarding the size of the font used, and b) expressed in a manner that does not hinder the participant's understanding of its content, whereby its language must be clear and comprehensible, jargon must not be used, and technical terms must, if possible, be replaced by commonly known expressions of comparable meaning.

(2) The use of colors must not limit the legibility, clarity, and comprehensibility of the content of the disclosure after it has been captured on paper.

(3) The graphic design of the logo must not distract the participant or interested party from the content of the disclosure, nor overlay the content of the disclosure.

(4) The title of the disclosure, as well as the trade name of the pension company and the name of the participatory or retirement fund, must be presented in a significantly larger font size than the rest of the text of the disclosure.

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§ 5

Paper format of the disclosure

After the disclosure has been captured on paper, the disclosure shall have the dimensions of two sides of one sheet of A4 paper, either vertically or horizontally, and shall be bordered by a margin at least 3 mm wide, on which no text is printed.

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§ 6

Basic data

The title of the first part of the disclosure shall be: "Basic Data". This part of the disclosure contains a) for the participatory fund, the following introductory provision: "In this disclosure, the participant or interested party will find key information about the participatory fund and about supplementary pension savings. This is not a promotional disclosure; the provision of this information is required by law. The purpose is for the participant or interested party to better understand the method of investing in this participatory fund and the risks associated with it. For an informed decision on whether to choose this participatory fund, participants and interested parties are advised to familiarize themselves with this disclosure.", b) for the retirement fund, the following introductory provision: "In this disclosure, the participant or interested party will find key information about the retirement fund and about retirement savings. This is not a promotional disclosure; the provision of this information is required by law. The purpose is for the participant or interested party to better understand the method of investing in this retirement fund and the risks associated with it. For an informed decision on whether to choose this retirement fund, participants and interested parties are advised to familiarize themselves with this disclosure.", c) the name of the participatory or retirement fund, d) in the case that it is a participatory fund other than the mandatory conservative fund, a statement of its type in terms of the type of assets into which it primarily invests, e) the trade name and identification number of the pension company managing the participatory or retirement fund, and possibly also the name of the consolidation unit to which the pension company belongs, or the logo of this pension company.

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§ 7

Basic description of supplementary pension savings or retirement savings

(1) The title of the second part of the disclosure for the participatory fund shall be: "Basic Description of Supplementary Pension Savings". This part of the disclosure contains a brief description of supplementary pension savings, particularly information on entitlement to state contributions, tax benefits, and the consequences of early termination of supplementary pension savings.

(2) The title of the second part of the disclosure for the retirement fund shall be: "Basic Description of Retirement Savings". This part of the disclosure contains a brief description of retirement savings, particularly information on a) the conditions for becoming a participant in retirement savings and that a registered retirement savings contract cannot be terminated or rescinded, b) the obligation to pay insurance premiums for retirement savings to the authorities of the Financial Administration of the Czech Republic, the amount thereof, and the obligation to notify the employer of participation in retirement savings or to file an insurance tax return, c) the impact of participation in retirement savings on entitlement to pensions from retirement insurance.

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§ 8

Investment objectives and method of investing in the participatory or retirement fund

(1) The title of the third part of the disclosure shall be: "Investment Objectives and Method of Investing". This part of the disclosure contains information on a) the main types of assets into which the participatory or retirement fund invests or intends to invest; if it invests or intends to invest in bonds, it also contains the type of these bonds according to their issuer and their rating, b) a specific sector of the national economy or a part thereof, a specific geographical area, or a specific part of the financial market, in which the participatory or retirement fund intends to concentrate or concentrates its investments, or a specific type of asset or a specific issuer, into which the participatory or retirement fund intends to concentrate or concentrates its investments, c) whether the participatory or retirement fund intends to track or tracks a specific index or indicator (benchmark); this information must indicate which index or indicator is involved and how or to what extent the participatory or retirement fund tracks it, d) whether the participatory or retirement fund replicates a specific index; this data must indicate which index is involved and to what extent the participatory or retirement fund replicates it, e) the use of financial derivatives or other techniques for hedging or for fulfilling the investment objectives of the participatory or retirement fund, f) the approximate period during which it is appropriate to remain in the participatory or retirement fund for the participant to achieve the expected return, and a warning that this fund may not be suitable for a participant who intends to change the savings strategy, claim a benefit, or exercise the right to transfer funds in a period shorter than the approximate period during which they should remain in the fund.

(2) The third part of the disclosure may also contain other data and information if they are important for the correct understanding of the investment objectives and method of investing in the participatory or retirement fund by the participant.

(3) The information stated in the third part of the disclosure must clearly distinguish between individual investments if otherwise the information on the investment objectives and method of investing in the participatory or retirement fund could be misleading or deceptive.

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§ 9

Risk profile of the participatory or retirement fund

The title of the fourth part of the disclosure shall be: "Risk Profile". This part of the disclosure contains a) a display of the scale for a synthetic indicator based on the volatility of the historical performance of the participatory or retirement fund and constructed using the procedure set out in Annex No. 1 to this Decree, a brief justification for the classification of the participatory or retirement fund into the relevant group according to this indicator, and a warning that

1. the value of the participant's assets may decrease or increase and that the return of the participant's assets is not guaranteed,
2. the classification of the participatory fund into the relevant group may change, and
3. the classification of the participatory or retirement fund into the least risky group does not mean an investment without risk, b) depending on the chosen method of investing, a description of risks associated with the chosen method of investing and which the participant may encounter in connection with investing assets in the participatory or retirement fund, namely
4. credit risk consisting in the issuer or counterparty failing to fulfill its obligation,
5. insufficient liquidity risk consisting in the fact that certain assets of the participatory or retirement fund will not be liquidated in time at a reasonable price and that the participatory or retirement fund will not be able to meet its obligations for this reason,
6. settlement risk associated with the fact that the transaction settlement does not proceed as expected because the counterparty does not pay or deliver the investment instruments within the specified period,
7. market risk arising from the influence of changes in the overall market development on the prices and values of individual types of assets in the assets of the participatory or retirement fund,
8. risk of loss due to deficiencies or failures in internal processes or human factors or due to external events (operational risk) and risk of loss of assets entrusted to custody or other safekeeping, which may be caused particularly by insolvency, negligence, or intentional action of the person who has the assets of the participatory or retirement fund in custody or other safekeeping, and
9. risk related to the investment focus of the participatory or retirement fund on a specific sector of the national economy or a part thereof, a specific geographical area, a specific part of the financial market, a specific type of asset, or a specific issuer.

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§ 10

Remuneration and fees of the participatory or retirement fund

(1) The title of the fifth part of the disclosure shall be: "Remuneration and Fees". This part of the disclosure contains a) information on the amount of remuneration for managing assets in the participatory or retirement fund, which includes all costs of managing assets except for fees according to letter c), b) information on the amount and conditions of entitlement to remuneration for the appreciation of assets in the participatory or retirement fund, and c) a description of all other fees and the conditions under which the pension company may charge them to the participant.

(2) The amount of remuneration for managing assets and remuneration for the appreciation of assets shall be stated in percentage terms together with the basis from which the calculation is derived.

(3) The remuneration of the pension company shall be stated for the previous accounting period.

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(4) The fifth part of the disclosure further contains information that no other remuneration and fees may be charged to participants.

§ 11 Historical performance

(1) The title of the sixth part of the disclosure shall be: "Historical Performance". This part of the disclosure contains a) a warning that the data used concern the past and that past performance is not a reliable indicator of future returns, b) information on the impact of remuneration on the performance of the participatory or retirement fund, c) historical performance in the form of a bar chart showing annual returns after tax for at least the last 10 consecutive years, displayed in accordance with the criteria set out in Annex No. 2 to this Decree, d) a comparison of historical performance according to letter c) with the development of an index or indicator in the case that the participatory or retirement fund tracks a specific index or indicator.

(2) In the case that the participatory or retirement fund has existed for less than 10 years, but for more than 1 year, annual returns and comparisons according to paragraph 1 letter d) shall be stated for all years of its existence. If data are not available for any period, the date without performance record shall be marked in the corresponding part of the bar chart. If less than 1 year has passed since the establishment or creation of the participatory or retirement fund, a warning shall be stated regarding the lack of data that could provide information about the historical performance of the participatory or retirement fund.

(3) Data on historical performance must be supplemented with an explanation that the calculation of the historical performance of the participatory or retirement fund is based on the value of the fund's equity capital of the participatory or retirement fund after deducting remuneration for management and remuneration for the appreciation of assets in the participatory or retirement fund.

(4) The bar chart must be displayed legibly and must not exceed the dimensions of length and width of one side of A5 paper after the disclosure has been captured on paper; the bar chart shall be supplemented with a warning on a) its limited predictive power regarding the future performance of the participatory or retirement fund, b) the year from which the participatory or retirement fund has existed, c) the currency in which the historical performance of the fund is calculated.

(5) The disclosure must not contain data on the performance of the participatory or retirement fund for the year in which the disclosure is published or is to be published.

(6) If a significant change in the investment objectives or method of investing in the participatory or retirement fund occurred during the period displayed in the bar chart, which affected its performance, the period preceding this change shall also be stated in the bar chart. The data relating to this period shall be supplemented with an explanation that the given performance was achieved under different circumstances.

§ 12 Information on the depositary and other information

The title of the seventh part of the disclosure shall be: "Supplementary Information". This part of the disclosure contains a) the name of the depositary of the participatory or retirement fund, b) information on the right to receive free of charge the statute of the participatory or retirement fund and its annual and semi-annual reports, c) data on the contact point where additional information can be obtained if necessary, including the address, telephone, e-mail address, and internet address of this contact point, and d) information that the pension company is responsible for the accuracy and completeness of the data stated in this disclosure if they are unclear, untrue, misleading or deceptive, or if they are not in accordance with the information stated in the statute of the participatory or retirement fund.

§ 13 Information on authorization

The eighth part of the disclosure is untitled and contains, in the case of a) a participatory fund, text of this wording: "The authorization for the establishment of this participatory fund was issued in the Czech Republic. The pension company managing this participatory fund is subject to the supervision of the Czech National Bank." and b) a retirement fund, text of this wording: "The authorization for the establishment of this retirement fund was issued in the Czech Republic. The pension company managing

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this retirement fund is subject to the supervision of the Czech National Bank."

§ 14 Data on publication

The ninth part of the disclosure is untitled and contains the date of publication of the disclosure, preceded by text of this wording: "This disclosure of key information was prepared as of".

§ 15 Continuous updating of the disclosure

(1) The pension company managing the participatory or retirement fund continuously verifies the currency of the disclosure and updates it without undue delay. In the bar chart depicting historical performance, the performance of the participatory or retirement fund in the preceding year shall always be taken into account.

(2) The currency of the disclosure is always verified in connection with the approved change of the statute of the participatory or retirement fund.

§ 16 Publication of the updated disclosure

(1) If the disclosure has been updated, the pension company shall publish the updated disclosure without undue delay.

(2) If the disclosure has been updated in connection with a change in the statute of the participatory or retirement fund, the updated disclosure shall always be published before the day on which the change in the statute of the participatory or retirement fund takes effect.

(3) The disclosure containing the consideration of the performance of the participatory or retirement fund in the calendar year shall be published no later than the 35th working day of the following calendar year.

§ 17 Effectiveness

This Decree shall take effect on 1 January 2013.

Chairman of the Government: RNDr. Nečas in his own hand

Minister of Finance: Ing. Kalousek in his own hand