Switch to new pension plan scheduled for 1 January 2027
In about two years, all our members (active members, pension beneficiaries and members with a non-contributory policy) will switch to a new pension plan that aligns with the new legal rules for pensions. We recently decided on the scheduled date for the switch to the new pension plan: 1 January 2027. Earlier we discussed the possibility of setting a date in 2026. However, we have now decided not to make the switch in 2026: our conclusion at this time is that we need to push back the date to 1 January 2027. Read on to find out why.
More information
On this web page you will find more information about the new rules for pensions.
More about new rules for pensionsMore assurance about the value of the assets if we switch on 1 January
If we make the switch on 1 January of a particular year, we can value the Pension Fund’s total assets using the valuations of our investments that are established in our annual report. Those values are audited, with an unqualified opinion from the Pension Fund’s auditor. That opinion offers comfort about the correct valuation of the assets not only for our own use, but also for the Dutch central bank (DNB). We investigated whether that same comfort could be obtained if we switched to the new pension plan during the course of the year, for example on 1 July. We learned, however, that our external auditor can only issue a qualified opinion then, in connection with investments that are not publicly traded.
Without an unqualified opinion from our auditor, we run the risk that DNB will not approve the transition, arguing that we lack the necessary comfort about the value of the assets at the transition date. That comfort about the value is of course also important to us as well, in order to properly convert the existing pensions. For these reasons, we have now scheduled the switch for 1 January 2027.
Valuing the assets key to proper conversion of the existing pensions
Under the present system, the Pension Fund’s assets are all held collectively, to finance the pensions of all our members. Under the new pension plan, each member will have a ‘personal pension capital’: your personal pension savings that Philips Pensioenfonds uses to pay you your pension every month.
When we switch to the new pension plan, the Pension Fund’s collective assets will need to be divided over each member’s personal pension capital. Part of the collective assets will also be set aside to form various reserves (some of them required by law) and to fund the compensation system that has been agreed.
It goes without saying that all those amounts need to be calculated properly, and with due care. One of the first steps is that the value of the Pension Fund’s collective assets must be established properly. This is why it is so important to obtain an unqualified opinion on that value from the Pension Fund’s external auditor. Of course, all the calculations that are needed to establish that value will be subject to checks and assurances to make sure that they are accurate.