Indexation ambition

Checked on 24 March 2021

Indexation ambition

The Board of Trustees does everything in its power to grant indexation to raise your future pension. However, as the events in recent years show, the pension fund is very much subject to external developments, and unfortunately we cannot give any guarantees. Nevertheless, the Board of Trustees seeks to offer you a pension that will retain its purchasing power over time – it is important to the Board to be able to index your pension. The ‘ambition’ is the target that the Board of Trustees sets for Philips Pensioenfonds pensions. Read on to find out what the ambition means in concrete terms for retired members and active members.

Indexation table

The indexation table shows precisely when we can grant you indexation.

More about indexation table
Ambition for retired members

The ambition of Philips Pensioenfonds is to increase your pension annually by the same rate as price inflation, expressed in the derived consumer price index established by Statistics Netherlands (CBS). Unlike the ‘standard’ consumer price index, the derived consumer price index does not reflect changes in the rates for product-linked taxes (such as VAT and duties on alcohol and tobacco), municipal taxes and subsidies – essentially, price increases resulting from government measures.

The Board of Trustees of Philips Pensioenfonds does not consider it to be the pension fund’s duty to compensate the effects of government measures. As a result, the rate by which your pension with Philips Pensioenfonds increases (based on the ambition) consistently deviates (though mostly only slightly) from the price increases according to the ‘standard’ consumer price index. Philips Pensioenfonds is not alone in this: the overwhelming majority of pension funds use the derived consumer price index.

Ambition for active members

The ambition of Philips Pensioenfonds is to raise your accrued pension rights every year by the same rate as wage inflation, expressed in the collective salary scale adjustments under Philips’s collective labour agreement (including for Signify employees). Whenever the Board of Trustees passes a decision to raise the accrued pension rights for members participating in the flex pension plan, that rise takes effect on the same date every year: 1 April.

We expect to grant partial indexation on your pension during the years ahead

Despite the significant social and economic concerns that marked 2020, the financial markets made an unexpected recovery from the fall in prices at the start of the year. This caused our actual funding ratio to rise to 119.9% by the end of February. In light of that actual funding ratio, we expect that our policy funding ratio will be sufficient during the years ahead for us to grant partial indexation on your pension. It is important to bear in mind, however, that market developments are unpredictable, and it is uncertain whether that will in fact be possible. Lastly, we consider it unlikely that we will be forced to lower your pension during the coming years: only if the funding ratio drops sharply will we have to consider whether we need to lower your pension.

The new pension system could also affect the future indexations

In the near future, the Dutch pension system will undergo a major change. The government should shortly share information about the rules for the new pension system, and about the rules leading up to the transition. The new pension law could affect our possibilities for increasing your pension by indexation. Once the new rules are clear, we will consider how they might affect your pension indexation and will inform you accordingly.

Related information

You might also be interested in the following information.

News overview

Visit our news page to find out the latest news, including information about increases in your pension through indexation.

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Financiele positie

Financial position

Whether your pension can be increased, and if so by how much, depends on the financial health of Philips Pensioenfonds. What is the pension fund’s current situation?

Go to financial position