The Board determines annually how much indexation is justified
Special circumstances require administrative considerations between granting indexation and protecting the financial buffer
Within a few years, pensions in the Netherlands will look different if the Future Pensions Act (Wet Toekomst Pensioenen) is adopted. The Board wants every participant in this new pension system to be able to make a good start and that, until the moment of transition to the new system, the differences between participant groups are limited, fair and explainable. In 2022, the Board considered the question of what the new pension system and the current special circumstances, such as high inflation and the situation on the financial markets, mean for the increase in pensions in the coming years. The outcome is that from 2023 onwards, the Board will annually determine the maximum that is justified when it comes to increasing your pension. This news item explains what this means.
Roel Wijmenga, chairman of the Board of Philips Pensioenfonds:
“The Board wants every participant to be able to make a good start in the new pension system and that the differences between participant groups are limited, fair and explainable.”
Indexation from 2023
- From 2023 onwards, the Board will annually determine the maximum that is justified when it comes to increasing your pension.
- In doing so, the Board looks at a large number of relevant facts and circumstances, such as the financial situation, the level of inflation, the situation on the financial markets, differences between participant groups, the remaining period until the transition to a new pension system and the increasing of pension at other pension funds.
- The maximum is the same for all participant groups, i.e. for active members as well as for pension recipients and non-contributory policyholders. It goes without saying that more indexation can never be granted than is legally permitted. This may ensure that it will remain possible in the coming years for active members to be allocated a different indexation percentage than to pension recipients and non-contributory policyholders. But the maximum limits the differences between the participant groups in any case and thus contributes to our starting point that such differences must be limited, fair and explainable.
- The Board maximizes indexation to protect the financial buffer. This buffer can soon be used to a large extent for the participants' personal pension capitals, so that all participants can make a good start in the new pension system.
- This is important because pensions in the new pension system, more than now, will move along with the waves of the economy.
- The Fund's ambition will not change as a result of the above: the aim remains to allocate the largest possible share of our indexation ambition to all participants. But we do take into account our wish to enable all participants to make the best possible start in the new pension system.
- With partial indexation, the extent of missed indexation will increase. We take this into account when distributing the buffer over the participants' personal pension pots.
When will the participants hear more about this?
The fixed indexation moment at Philips Pensioenfonds is 1 April. This means that the Board decides in the first quarter of each year whether and, if so, by what percentage the pensions can be increased. Each participant will receive a personal message about the pension increase prior to 1 April.