Column 'Pension questions: do you know the answer?' - Gener@ties July 2021

22 July 2021

This column has been written for participants who have not yet received a pension.

“Your pension contributions – does Philips Pensioenfonds earmark them for you personally, or do they go towards the current pension beneficiaries?” “When can you start drawing the pension that you have accrued with Philips Pensioenfonds?” “Does Philips Pensioenfonds offer the possibility of taking out insurance for your surviving dependants?” We presented these questions to a large group of members last April, to find out your thoughts about pensions, and what you know about them. Misunderstandings can lead to misconceptions about what to expect when you retire. We use the information that we gather from our surveys to improve our communications. If you were one of the members who answered our questions, I imagine that you want to know the results. Read on to find out more about these questions.

A pension for you!

54% of our members believe that the pensions of the current pension beneficiaries are paid by the people now working. Although this is in fact how it works with the state pension from the government, the same does not apply to the pension that you accrue through Philips or Signify as your employer. Your pension contributions are used to purchase your own pension. The amount that is needed to pay your pension from when you first start drawing it until you die is earmarked for you and you alone. The pension reserves that Philips Pensioenfonds holds – more than €22 billion – are actually some 100,000 reserves: one for every member of the pension fund, plus a buffer. To keep our costs low and spread the risk, however, we invest those amounts collectively for all our members. This saves you money, and allows us to offer you more certainty than if we handled your pension individually. In short, therefore, you can be certain that you will have a pension when you retire!

Decide for yourself when to retire

Another question in our survey was when the pension that you have accrued with Philips Pensioenfonds will start paying. 45% answered correctly: when you want it to. Although we use a retirement reference age of 68 when you accrue your pension, we only use that age as the basis for calculating your pension. The actual decision is yours to make: whether before or after you reach state pension age. Once you turn 60, under our flex pension plan you can start choosing your own retirement age. Watch our animated video ‘Choose your retirement age’ to find out precisely how this works and how you can use the Pension Planner to calculate your pension.

Extra insurance in the event of your death

Almost half our members are aware that Philips Pensioenfonds offers additional insurance for your surviving dependants. While that is good news, it also means that half our members do not know this. Say you die, and your partner does not satisfy the legal requirements for a full survivor’s pension under the Anw.  Your partner will then have an Anw shortfall: not having a full a survivor’s pension means less income.  You can compensate for that shortfall by taking out Anw shortfall insurance. To find out more, read the information on our website.

We will be highlighting these topics during the period ahead, so you can look forward to reading more about them in the months to come – and that is all thanks to your input. ?

Jasper Kemme

Managing Director