What is important to know for Rajesh?

In the current pension system, younger pension accruors contribute to the pension accrual of their older colleagues. In the new pension scheme, the same premium is available for every pension accruor. Middle-aged pensioners are too young to have benefited maximally from young people contributing part of their pension accrual in the current system and too old to benefit from the equal contribution for everyone in the new system.

That is why members who are now in the middle age bracket and are still accruing a pension with Philips Pensioenfonds might find themselves in a less favourable situation when the new pensionrules are adopted. 

In short, the compensation comes down to the following:

• This compensation applies to all active members (including disabled participants who have premium-free pension accrual) who are between 40 and 68 years old at the transition moment.
• The intended compensation scheme ensures that the transition effects for active members aged 40 to 68 are more equalised with the surrounding age groups. The compensation scheme is therefore necessary to give a balanced form to the transition to the new pension scheme for all participants.

How much compensation you will receive is impossible to calculate until we switch to the new pension plan. We will send you personalised information near the end of 2026. The transition plan includes a diagram that gives an idea of how much your compensation will be; however, it is not definite yet whether we can carry out the compensation system as described in the transition plan. We have to wait for the Dutch central bank (DNB), as our supervisory authority, to approve the arrangements that have been made (see ‘Is the compensation system final?’). 

The transition plan drawn up by the employers and the unions describes how the compensation system will be given shape. The Board of Trustees of Philips Pensioenfonds has reviewed the compensation system, and agrees with the employers and the unions that it will help to ensure a balanced transition. Even so, it is not final yet. Ultimately, the Dutch central bank (DNB), as our supervisory authority, has to give us approval to convert the accrued pensions to the new pension plan. The compensation system is part of the arrangements to make sure that the conversion is balanced. We have to submit a large number of documents (including the implementation plan and a conversion template), which that supervisory authority will study before deciding whether it can give us approval. Reviewing all those documents, a process that is referred to in practice as ‘reviewing the conversion request’, is labour-intensive, and we are working on the assumption that it will be 2026 before we know whether or not we have DNB’s approval. Only when the supervisory authority has given its approval will we know whether we can carry out the compensation system in its contemplated form.

That is correct. Under the new system, you will have a personal pension capital that is invested. The value of your pension capital will fluctuate over time. You will be able to see how much pension capital you have at a particular moment. You will also be able to see what developments have affected it, either increasing its value (contributions and investment gains, for example) or decreasing its value (such as benefits that you have drawn or investment losses). 

How much pension you can draw from your pension capital after you retire will not be predetermined: instead, it will depend on factors such as future investment yields and the interest rates when you retire. Those yields will depend on your age: while you are young, more of your pension capital will be invested in equities (shares) and its value will fluctuate more strongly than when you are older and it is invested more conservatively.

When the new system is introduced, your pension will also be affected more strongly by economic fluctuations: it will be more likely to go up in times of prosperity, but also more likely to go down when the economy is struggling. We will try to prevent a decrease in pension benefits as much as possible. 

With regard to the increase in your pension: in the current pension system, this is always done through indexation. In new pension system your pension will not be indexed in the way that it is now. Whether your pension goes up depends on the amount of your personal pension assets. And also besides the investment return, the projection return will be determining the yearly adjustment of the benefit. More information about the projection return can be found on our Question and Answers page under the question: 'Is the calculation interest rate in the new pension system no longer important at all?'. 

This depends on the plan chosen by employers. If the solidarity contribution plan is chosen, you will not be making your own investment decisions. You may have your own pension fund, but this pension fund will remain collectively invested, just like now. This means, the total pension capital of all collective members is invested by the pension fund. You do not have your own choices with regard to investments.

If the flexible contribution plan is chosen, you will have the opportunity to make your own investment decisions. For example, you could decide within certain limits how to spread your pension savings across several investment funds such as an equity fund or a bond fund.