What risks are there?
The accrual and the payment of a pension cover a very long period. It can be as much as 80 years from the beginning of pension accrual to the last pension payment. In such a period the world changes, and so risks can arise which represent a threat to your pension. The risks may result in a deficit.
Interest rates affect the value of pensions. Pension administrators make an estimate of the money that they will need to be able to pay the pensions. The lower the interest rate, the more funds Philips Pensioenfonds must have in order to be able to pay all future pensions. If the interest rate remains low for a long time, that will make the pensions more expensive.
Philips Pensioenfonds uses the total pension premium (contribution), minus costs, for financing your annual pension accrual rate of 1.85%. If the annual pension premium payment is not sufficient to finance the accrual rate of 1.85%, the accrual rate for that year is lowered and for that year you accrue less pension.
The accrual rate of 1.85% is therefore not fixed.