The Board aims to increase your pension by wage inflation (if you are accruing pension) or by price inflation (if you are pension recipients or holder of a paid-up policy). This ambition is laid down in the indexation policy. Part of the indexation policy is also the so-called indexation table, which is the starting point for determining the indexation that is actually awarded each year. We expressly speak of the starting point. On the one hand because the Board can deviate from the indexation table (see below, among other things, how the Board considers which increase is justified. on the other hand because more indexation can never be granted than is legally permitted.
The indexation table indicates the policy funding ratio at which the pensions can be fully or partially increased or must be reduced. The indexation table is adjusted periodically, in particular because no more indexation can be awarded than is legally permitted. The current indexation table is shown below.
It is good to report the following. Until the end of 2021, full indexation was possible with a policy funding ratio of around 123%. In 2022, this limit for the policy funding ratio has risen sharply, to 138.6% on 31 December 2022. This is because interest rate developments and inflation also influence this. The higher the interest rate and/or inflation, the higher the legal limit for full indexation. The indexation decision for 2023 was based on the situation as at 31 December 2022. The indexation table has now been updated to the situation as of 1 September 2023. Compared to the previous quarter, the mentioned limit has increased to 141.9%. This increase is mainly due to the new legal parameters that apply from 1 September 2023, namely the higher assumed wage and price inflation in the future and the lower prescribed return with which future indexations must be valued.
In addition, it is good to know that due to a recent decision of the Board, in addition to the indexation scale, a maximum to be determined annually also determines the level of the indexation. You can read more about this below.
The Board annually determines the maximum indexation that is justified
From 2023 onwards, the Board will annually determine the maximum percentage that is justified 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 how much other pension funds increase the pensions. The Board maximizes indexation to protect the financial buffer. This buffer will soon be used to a large extent for the participants' personal pension pots, so that all participants can make a good start in the new pension system. This is important because pensions in the new pension system, more than now, will move along with the waves of the economy. You can read more about this news item.
|Level of the policy funding ratio||Can pensions be increased in full or in part or should they be reduced?
Attention! In addition to the level of the funding ratio, the maximum indexation the Board deems responsible is decisive. This is decided annually.
|<100%||A reduction of your pension is applicable|
|100% - 110%||Your pension cannot be increased|
|110% - 141.9%||Your pension can be partially increased|
|>141.9%||Your pension can be increased in full, compensation indexation is possible|
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Whether your pension can be increased, and if so by how much, depends, among other things, on the financial health of Philips Pensioenfonds. What is the pension fund’s current situation?Go to financial position