Principles of Pension Planner
Checked on: 7 December 2023
The information available on Philips Pensioenfonds’s public website and in your personal MijnPPF environment has been put together with the utmost care. However, despite our best efforts some of the information presented there might be incorrect or incomplete. Philips Pensioenfonds does not accept any liability for such errors or omissions. Rights can only be derived from the pension plan rules and the applicable laws and regulations.
The Pension Planner is a pension calculation tool, which you can use to find out how specific situations and specific choices will affect your pension. The Pension Planner is intended to give you an idea of your pension situation. You can ask Philips Pensioenfonds to finalise your pension based on the choices that you have selected in the Pension Planner. You do this by printing out the appropriate form, adding the missing details and signing the form. If you have a partner, he or she must also sign it. You can send the form either through MijnPPF or by post. You cannot derive any rights from the information presented on the form; rights can only be derived from the finalised values when your pension is granted.
Assumptions
The calculations in the Pension Planner are based on a number of assumptions. However, the actual situation might be different, and the values that apply when your pension is finalised will not necessarily be the same as the values shown in the Pension Planner today.
Such differences result from the following factors:
- The Pension Planner makes calculations based on the current pension scheme. The future introduction of a new pension system in The Netherlands is therefore not yet taken into account.
- The information shown in the Pension Planner is based on the actuarial factors that apply on the date when you make the calculation. When your pension is finalised, those actuarial factors could have changed, and as a result your finalised pension might be higher or lower than the calculations shown in the Pension Planner. The actuarial factors change once a year on 1 April. You can see below the graph on which calculation rules the calculations in the Pension Planner are based.
What are actuarial factors?
With the actuarial factors we calculate your pension based on the choices you make. Choices you can make include advancement of your retirement age, exchange survivor’s pension for a higher old age pension or vice versa, or first a higher pension then a lower pension. With the actuarial factors we calculate the value of your accrued pension. In this way we ensure that the value of your pension does not change due to choices that you make. In other words, when you make choices with your pension, we increase or decrease the pension amounts, but the value remains the same as it was before processing your choices.
Why do we adjust the actuarial factors every year?
We calculate your pension based on a number of assumptions including the interest rates that we use and the life expectancy. For instance, has the interest rate increased? Then advancing your retirement age yields a lower pension than with a low interest rate.
To reflect the most recent developments of these factors, we adjust the actuarial factors every year per 1 April, based on the situation on 31 December. Did you make a calculation that is further in the future? In that case, we make the calculation with estimated actuarial factors based on more recent interest rates. You can see below the graph in the Pension Planner which actuarial factors are used for the calculations in the Pension Planner.
- Your pension accrual under the flex pension plan is based on a maximum accrual rate of 1.85%. However, that accrual rate is not guaranteed: in some situations it may be lowered, and as a result you will accrue less pension for a particular period. Every year at 1 January, Philips Pensioenfonds establishes the accrual rate for that year. The Pension Planner applies the following rules:
- your previously accrued pension values and the pension values that you accrue during that contribution year (i.e. from 1 January to 1 January) are based on the actual accrual rates realised. In concrete terms, this means that in 2022 a reduced accrual percentage of 1.65% is used in the calculations;
- for your future pension accruals, the accrual rate is assumed to be the maximum rate of 1.85%.
- Calculations of future values are based on your current data (salary information, marital status, etc.) as registered in Philips Pensioenfonds’s records. Your actual data could be different and/or might change in the future.
- Your net income is based on the current calculation rules applied by the Tax and Customs Administration. This means that it makes allowance for the contributions that we are obliged to withhold under the Dutch Healthcare Insurance Act (Zvw) and reflects the current tax brackets and tax rates. The Pension Planner also makes allowance for your tax credit.
To calculate your net pension income, the Pension Planner adds your company pension and your state pension (AOW) and then works out how much tax you will have to pay. However, when paying your pension, Philips Pensioenfonds can only calculate the tax on the pension benefits that you receive from Philips Pensioenfonds. If you also receive pension benefits from other benefits agencies, they will do the same for their payments to you. This could therefore mean that you are not remitting enough tax. If so, you will need to settle the difference when you file your personal income tax return. The net values in the Pension Planner provide information about your net income from Philips Pensioenfonds and your state pension after you have filed your tax return. To see your total income, including pension rights that you have accrued with other employers, visit www.mijnpensioenoverzicht.nl.
- The Pension Planner also shows your state pension (AOW), for your information. The choices that you select in the Pension Planner will not affect that state pension. Our calculations are based on a full state pension for a single person or a person who is married or living with another adult, according to how your marital status is registered in our records. Not everyone will receive the same state pension benefits: the precise amount also depends on the number of years that you lived and/or worked in the Netherlands during the 50 years before you reach state retirement age. Visit www.svb.nl/aow to find out more about how much state pension you will receive. The AOW pension age will gradually rise to 67 years until 2023 and will then remain the same as 67 years up to and including 2027. From 1 January 2028, the state pension age will be 67 years and 3 months. From 2029 onwards, the state pension age will be linked to life expectancy and can therefore be further increased step by step.
Final remarks
The Pension Planner has been prepared with the utmost care and is based on the information currently available to us as well as the pension plan rules applicable to you. Rights can only be derived from the pension plan rules. The pension plan rules are available for download at www.philipspensioenfonds.nl.