Lump sum

It is not yet clear from when you can make the choice for 'lump sum'. The earliest possible commencement date is 1 July 2024. It is also uncertain whether the possibility will be offered to postpone payment of the lump sum until after the AOW date.

Have you already retired when the scheme comes into effect? Then you can no longer use the option 'lump sum'. Are you on a part-time pension at that time? In that case, you can withdraw a maximum of 10% of the pension that has not yet been paid out in one go. You decide about six months before you retire (fully) whether you want to make use of the 'one-off amount'. You will then receive information about the choices you can make and we invite you to go to the Pension Planner to calculate your choices.

Are you retiring soon and would you like to know what this choice can mean for you personally? Or are you even considering postponing your retirement? Then make an appointment for video calling.

In principle, you will receive the lump sum at the same time as your first pension payment. You may be allowed to defer payment of the lump sum if the commencement of your pension coincides with the month in which you reach your state pension age. You will receive the lump sum in the following January. You then pay less tax on the amount, because as an AOW recipient you usually fall under a more favorable tax rate. It is therefore not yet certain whether it is possible to postpone the payment within the scheme.

The following legal conditions apply to making use of a lump sum:

• You may have a maximum of 10% of the value of your retirement pension paid out in one lump sum, less is also allowed.
• After the lump sum amount, your pension must be higher than the statutory commutation limit. In 2022, this limit will be € 520.35 gross per year.
• You may not combine an option for lump sum with two other options that affect your lifelong pension: the high-low scheme or the purchase of a bridging pension.

You may not combine a choice for lump sum with two other pension options that affect your lifelong pension. That is why it is not possible to opt for lump sum in combination with the high-low scheme (first a higher pension and then a lower pension) and also not in combination with the purchase of bridging pension (temporary pension if you retire earlier than the state pension). age retires).

The 'Belastingdienst' sees the lump sum as income on which you have to pay tax. That can have various consequences. For example, you may fall into a higher tax bracket. In that case, you pay a higher tax rate on the lump sum than on your monthly pension. You will probably also have to pay a premium for the Health Insurance Act on the lump sum. Do you receive allowances, such as rent and/or health care allowance? In that case, the surcharge can be reduced or even expired. This also applies to other means-tested schemes that you may make use of. The lump sum can therefore be tax disadvantageous. That is why it is always wise to discuss your personal situation with a financial advisor.

In short, amount suddenly means 'more money now, but less later'. Your total pension has a certain value. If you have 10% of the value of your retirement pension paid out in one go, there will also be 10% less value left for your monthly pension income. Your monthly pension income will therefore be lower. Even if you have opted for a lump sum, you will receive that lower pension income for as long as you live.

If you opt for lump sum, you will receive an amount that can be freely spent. You can, for example, pay off (part of) your mortgage, pay for a renovation, make a nice trip or make another major purchase. The advantage is that you can tailor your pension to your personal situation and future wishes. This flexibility does come at a price, because your lifelong monthly retirement income will be correspondingly lower. A financial advisor can determine for you whether the lump sum amount is appropriate for your situation.

Your total pension represents a certain value. This depends on the average life expectancy, the interest rate and your age at the time you make the choice. To give you an idea: suppose your accrued pension on an annual basis is € 10,000 (gross). If you opt for the maximum percentage of 10% for the 'lump sum' at the age of 68, you will be paid an amount of € 14,506 (gross) in a lump sum at that time. Your lifelong pension will be 10% lower as a result: € 9,000 gross per year.

Would you like to calculate this yourself? In the Pension Planner you can calculate how high your expected pension is at your desired retirement age. In Appendix 1 of the Pension Plan Rules under Downloads you will find the table 'Surrender of retirement pension'. There you can see for your desired retirement age how much you can receive as a 'surrender value' per € 1,000 retirement pension. Multiply the surrender value by your accrued pension divided by €1,000. You can receive a maximum of 10% of this amount at once with the option 'lump sum'.

For example: you want your pension to start at the age of 65 and you have calculated in the Pension Planner that your expected retirement pension at that age is € 15,000. If you opt for a lump sum of 10%, you can read in the table how much you can receive for € 1,500 (10% of € 15,000) of retirement pension. The table states that per € 1,000 you can get an amount of € 13,312, so for € 1,500 you get 1.5 x € 13,312 = € 19,968. You can also calculate other percentages between 1% and 10%.

No, the survivor's pension for your partner does not change due to a lump sum. We always ask you first to choose whether you want to keep your survivor's pension or exchange it for a higher retirement pension. Do you choose the latter? In that case, your survivor's pension will be lower or will lapse as a result of that choice. In that case, the lump sum is calculated on the basis of the higher retirement pension.

In the new pension system you will receive a personal pension pot from which your pension is paid. If you now opt for a lump sum, your lifelong retirement pension will be lower and with it the value of the pension pot that you will receive later. Does Philips Pensioenfonds have a funding ratio that is higher than 100% at the time of the transition to the new pension system? Then a buffer is available. This buffer will then probably largely belong to the personal pension pots of participants. If you have opted for a lump sum, the share that you will receive from the buffer is lower. After all, you have a lower pension than if you had not opted for a lump sum.