In the coming months, the Board will again consider the extent to which your pension can be increased as of 1 April 2024. Until the transition to the new pension system, the Board annually assesses which pension increase (indexation) is responsible. This is because 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 until the moment of transition. As a result, the amount of indexation depends not only on the financial situation at the time of indexation, but also on the expected and desired financial situation at the time of transition to the new pension system. In this news item we once again outline what this means and you can read when you will receive more information about the pension increase as of 1 April 2024.
Special circumstances require administrative consideration between providing indexation and protecting a financial buffer
How does the Board make a decision about indexation?
- Every year, until the new pension scheme comes into effect, the Board determines the maximum responsible amount 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.
- 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 can the Board make a decision?
In March 2024, the Board will make a decision on the pension increase on 1 April 2024. At that time, CBS will announce the final figure for (derived) price inflation between January 2023 and January 2024. That figure is the ambition for the pension increase of pension recipients and non-contributory policyholders. For pension builders, the collective scale adjustment at Philips (also called wage inflation) is the basis for the indexation decision. This also applies to the employees of Signify and Versuni.
When will you hear more about this?
The fixed indexation moment at Philips Pension Fund is 1 April. Each participant will receive a personal message about the pension increase before 1 April. You can expect this message at the end of March, because the final data on price inflation will only be known in the second week of March.