This is the abbreviation of ‘actuarial and business-technical note’ (actuariële en bedrijfstechnische nota), a document published by the board of trustees of a pension fund that sets out the pension fund’s financing, indexation and investment policies.

Accrual percentage
This is the percentage used for calculating your annual pension accrual. The maximum under the flex pension plan is 1.85%. This accrual percentage is not a fixed value: if circumstances dictate, the percentage may be lowered, meaning that you accrue less pension over a particular period.

Actuarial factors
These factors (actuarial rules) are used for calculating your pension if you bring forward or push back your retirement, or if you wish to exchange survivor’s pension for additional retirement pension, for example. These actuarial factors may change as new data about life expectancy in the Netherlands becomes available or if another actuarial interest rate is applied.

This is the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten). The AFM’s duties include overseeing how pension administrators provide information. This is laid down in the Dutch Pensions Act (Pensioenwet).

The survivor’s benefits under the Dutch Surviving Dependants Benefits Act (Algemene nabestaandenwet, or Anw) represent financial aid that you receive from the Dutch government after your partner’s death.

Anw shortfall insurance
If you die, Philips Pensioenfonds will automatically pay your partner a survivor’s pension. On top of that pension, he or she might also be entitled to Anw benefits from the Dutch government: benefits under the Dutch Surviving Dependants Benefits Act (Algemene nabestaandenwet, or Anw). We offer you the option of taking out Anw shortfall insurance for your partner. This can be useful if your partner is not entitled, or does not have a full entitlement, to Anw benefits.

The Dutch Old Age Pensions Act (Algemene Ouderdomswet, or AOW) is a basic amount to which you are entitled by law as soon as you reach the statutory retirement age. You build up a full AOW entitlement by spending 50 years living and/or working in the Netherlands before you reach the statutory retirement age. However, in principle 2% will be deducted from the full AOW entitlement for each year that you lived and/or worked outside the Netherlands during that period.

AOW guarantee for expats
Did you work abroad as an expat before 1 January 2015? In that case it is possible that your employer may have arranged an AOW (Dutch state pension) guarantee for you. This guarantee was intended to compensate for the loss of AOW pension. This is because during your stay abroad you did not accrue Dutch state pension. You have an AOW guarantee if you have satisfied a number of conditions. The AOW guarantee is executed by Philips Pensioenfonds.

Average pay plan
With this type of pension plan, the value of your projected retirement pension is based on your average income during your membership of Philips Pensioenfonds.

Bridging pension/payment
You receive this pension if you retire before reaching the statutory retirement age. It will be paid from the date of your retirement until you reach the statutory retirement age, as compensation for not receiving any pension yet under the AOW. To find out at what age you are entitled to a pension under the AOW, visit the website of the Dutch Social Insurance Bank (Sociale Verzekeringsbank, SVB) at

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Client profile
You have the option of actively handling how your pre-retirement capital is invested. You fill out a questionnaire to map out your financial position, your goals and your understanding of and experience in investing. This results in your client profile.

Collective defined-contribution plan
With this type of pension plan, the employer supplies a fixed percentage of the total salaries each year as its contribution to the pension fund, to finance the pension plan accrual. If the total value of this contribution is insufficient, the percentage for future accruals may be lowered on a temporary basis.

Collective salary scale adjustments
These adjustments are collective increases in the salary scales that have been agreed during the collective employment agreement negotiations between the employer and the unions.

Contribution agreement
This is a type of pension agreement between yourself and your employer, under which the capital that you have saved is used to purchase a pension on your retirement date. As such, the value of the pension is not fixed until your retirement.

Defined-benefit agreement
This is a type of pension agreement between yourself and your employer, under which the value of your pension benefits is in principle established in advance.

Derived consumer price index (CPI)
The consumer price index published by Statistics Netherlands (Centraal Bureau voor de Statistiek) is used for measuring movements in the average prices of a parcel of goods and services that households purchase for consumption. This parcel does not include the amounts spent on basic medical insurance, income tax or social security contributions. The derived consumer price index is the same as the consumer price index, but without the effects of changes in the rates of product-specific taxes (for example VAT and duties on alcohol and tobacco) and subsidies. Pension funds commonly use the derived consumer price index to measure increases in consumer prices.

Disability pension
This is a pension to which you are entitled if your employment contract is terminated on grounds of disability. The disability pension serves to supplement the benefits under the WIA.

Disability pension base
The disability pension base is used for the calculation of your disability pension. The disability pension is a supplement to the WIA benefit you get from the Dutch state in case your contract of employment is terminated due to disability. The salary to be used for the calculation of your disability pension consists of your gross annual salary including any structural allowances and your personal budget. The disability pension base will not be maximized to € 105,075. In the event of disability’. If you work part-time, your part-time percentage is taken into account in the calculation of your disability pension.

Divorce agreement
When they divorce, spouses sign a divorce agreement to settle such matters as how the pension rights will be shared.

Divorce conversion
If your relationship ends, your former partner is entitled to part of the retirement pension that you built up while you were married and/or had a registered partnership. Conversion turns the portion to which your former partner is entitled into an independent retirement pension entitlement, to be paid out once your former partner reaches retirement age under the pension plan rules. If you opt for conversion, your prenuptial agreement or divorce agreement must include an arrangement to that effect.

This is the name of the Dutch central bank (De Nederlandsche Bank). Among other duties, DNB supervises pension funds. DNB is responsible for monitoring the financial situation of pension administrators (prudential supervision) and overseeing how the pension administrators conduct their businesses (material supervision). For example, DNB monitors whether directors are sufficiently knowledgeable and reliable.

Duty of care

The pension fund has a statutory obligation to warn participants with active investments of the risks. Philips Pensioenfonds also determines every year whether the risks that you are taking match your client profile.

Extraordinary survivor’s pension
The value of the survivor’s pension that you had accrued until the moment at which your relationship ended will be paid to your former partner in the event of your death. Where applicable, this amount is deducted from the value of your new partner’s survivor’s pension.

Factor A
This represents the pension accrual during a given calendar year. Factor A can be used for calculating the tax allowance that you need for supplementing your pension, for example with annuities.

Financial crisis plan
The financial crisis plan describes what the Board of Trustees will do if a financial crisis hits or threatens the pension fund. DNB has made it mandatory for all pension funds to draw up a financial crisis plan.

Fulltime offset
See Offset.

Fulltime pension base
See Pension base.

Funding ratio
The funding ratio shows a pension fund’s financial position. The funding ratio represents how the pension fund’s capital on the one hand relates to the pension commitments (all pensions payable now and in the future) on the other.

In het herstelplan worden de (korte- en langetermijn-)maatregelen beschreven die een pensioenfonds kan nemen om de financiële situatie weer op orde te krijgen.

High-low scheme
Under this arrangement, a participant receives more pension up to a particular age, and less pension during the period beyond that age.

This is a percentage by which active pensions (i.e. after retirement) and/or non-contributory pension entitlements (before retirement) are increased.

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Membership period
This is the period that you are employed by Philips or Signify and participate in Philips Pensioenfonds.

Minimum required funding ratio
Pursuant to the Dutch Pensions Act (Pensioenwet), pension funds are obliged to maintain a minimum level of funding. Each pension fund calculates its minimum funding ratio using actuarial rules that are laid down in the Financial Assessment Framework (Financiële Toetsingskader). Minimum required funding ratios vary between 104% and 105%, depending on the size of the individual pension fund. Philips Pensioenfonds has a minimum required funding ratio of 104%. If the pension fund’s funding ratio falls below the minimum required funding ratio, it has a funding deficit.

Non-contributory pension entitlements
These are pension entitlements without any further accrual and for which no further contributions are paid. These pension entitlements are adjusted in accordance with the indexation policy for non-contributory policyholders. You will start receiving them after your retirement date.

This is the portion of your income on which you do not accrue pension, because you receive a pension under the AOW. To allow for the AOW, this offset is deducted from your pensionable salary in the additional accrual of your pension.

Orphan’s pension
This is a temporary pension that your children will receive in the event of your death.

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Your partner is the person to whom you are married, with whom you have entered into a legally registered partnership or with whom you live together without being married. The definition used is the same as in the Dutch Surviving Dependants Benefits Act (Algemene nabestaandenwet), which requires that you ‘care for each other’ and ‘conduct a joint household’. Your partner must also be registered with Philips Pensioenfonds.

Part-time percentage
This percentage represents the number of hours that you work relative to the number of hours based on full-time employment. An example: Someone is working 24 hours a week and full-time employment is 40 hours. Then the part-time percentage is 60%.

Part-time retirement
In this situation, you work fewer hours in anticipation of full retirement and receive a partial pension. You continue to accrue pension rights proportionate to the percentage of hours that you still work.

Payroll tax credit
This is an amount that is deducted from the payroll tax that you pay. Every taxpayer is entitled to this deduction.

Pension base
This is your pensionable salary less the offset. If applicable, the resulting amount is multiplied by your part-time percentage.

Pension capital
This is the total value of a pension fund’s assets (investments). The capital is established using the market value of the pension fund’s investments.

Pension commitments
This represents the total value of all pensions payable, now and in the future. The value of the pension commitments is based on a series of estimates, for example about future interest rates, life expectancy and in some cases future price increases. This is governed by statutory rules, which are laid down in the Financial Assessment Framework (Financieel toetsingskader).

Pensionable salary, final-pay plan
This is the income on which your pension is based: twelve times your gross monthly salary + 10%.

Pensionable salary, flex pension
This is the income on which your pension is based: your gross annual salary (twelve times your gross monthly salary, including any structural allowances, for example for shift work or regular overtime) plus your personal budget. Variable income components are settled once annually (on 1 April) for the previous year. Withdrawals from your personal budget are then deducted at the same time.

Pensions Act
The Dutch Pensions Act (Pensioenwet, sometimes abbreviated as ‘PW’) describes what duties and responsibilities the employer, the employee and the pension administrator have with regard to the pensions. The Pensions Act, which entered into force on 1 January 2007, is aimed at safeguarding the pension fund’s pension commitments in respect of employees.

Pre-retirement plan
If you worked for Philips or Signify before 2006, you had the option of saving extra capital under the pre-retirement plan. Your pre-retirement capital is invested, and that portion of your pension is therefore linked to investment yields.

Price inflation
This represents the increase in prices measured using the derived consumer price index published by Statistics Netherlands (Centraal Bureau voor de Statistiek). Philips Pensioenfonds seeks to adjust the accrued and active pensions in accordance with price inflation.

Projected retirement pension
This represents the value of your retirement pension if your employment with Philips continues until your retirement date.

Recovery plan
The recovery plan describes what measures (for both the short term and the long term) a pension fund may take to remedy a poor financial situation.

Reference retirement age
This is the age on which your pension plan is based. For the Philips flex pension, the reference retirement age is 68.

Required funding ratio
The funding ratios that pension funds must maintain are dictated by law. These required funding ratios vary from one pension fund to the next, depending on several factors including the risks that the pension fund accepts in its investment policy. More risks mean a higher required funding ratio. The required funding ratio is calculated using a model that is prescribed by law. That model considers a series of ‘risks’ to which each pension fund is exposed and calculates how much additional capital the fund must have to cover that risk with a high degree of certainty. A pension fund whose funding ratio falls below the required level has a reserve deficit.

Retirement pension
This is the pension that you receive upon reaching retirement age.

If your relationship has ended, your former partner is entitled to part of the retirement pension that you accrued during your marriage and/or registered partnership. This is called sharing: that retirement pension is paid to your former partner as soon as you reach the retirement age under the pension plan rules. If you choose to share your pension based on the standard division (50%-50%) no further arrangements are needed. If you prefer a non-standard division this must be recorded in your prenuptial agreement or the divorce agreement.

Start of employment
This is the date that you started working at Philips or Signify.

Start of pension accrual
This is the date on which you started to accrue a pension with Philips Pensioenfonds. The date of employment and the date of joining the Pension Fund may not be the same. This occurs for instance if you did not start employment on the first day of the month. A difference also occurs if you were not yet 25 years old when you started working. In the past, that was the minimum age for participation in the pension scheme. Before the age of 25 you could possibly participate voluntarily in the pension scheme. If you were working abroad as an expatriate then the employment date may also be the date of your return to the Netherlands.

Statutory retirement age
This is the age at which you become entitled to the statutory pension under the AOW.

Supplementary allowance
This allowance is an extra and conditional pension benefit. Every year that you are employed, subject to a maximum of 15 years calculated from 1 January 2006 forward, the supplementary allowance loses part of its conditional nature and is added to your accrued entitlement. The supplementary allowance is only available to participants in the flex pension who were working on 31 December 2005 and who were 25 or older on that date.

Survivor’s pension
This is a pension that your partner receives after you die. Your partner may be entitled to this pension if you are married, if you have a registered partnership or if you live together without being married but have registered your partner with Philips Pensioenfonds.

Uniform Pension Overview (UPO)
As a participant in a pension plan, you receive a pension overview every year. That overview shows what benefits you will receive when you retire or if you become disabled, as well as the benefits that your partner and/or children will receive in the event of your death. All pension funds and insurance companies in the Netherlands use the same overview, to make it easier for you to understand what your pension situation is. It also makes financial planning simpler.

The Dutch Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen) is responsible for the records and administration of employee insurances such as the Dutch Sickness Benefits Act (Ziektewet, ZW), the Dutch Unemployment Insurance Act (Werkloosheidswet, WW) and the Dutch Work and Income (Capacity for Labour) Act (Werk en Inkomen naar Arbeidsvermogen, WIA).

Value transfer
This reflects the possibility to transfer pension rights that you accrued at your former employer or employers to your current pension administrator.

Variable salary components
Variable salary components are debited/credited in the full-time income that counts towards your pension plan once a year. On 1 April the balance of the extras, such as an incidental overtime allowance or variable remuneration, and/or the withdrawals from your personal budget, for instance for purchased days, is ascertained. Additional contributions are then added or an adjustment of your pension takes place if the balance is negative.

Wage inflation
This represents the amount by which wages increase as a result of the collective salary scale adjustments. Philips Pensioenfonds seeks to adjust the pensions that are still being built up by the same factor as the wage inflation.

The Dutch Disability Insurance Act (Wet op de Arbeidsongeschiktheidsverzekering).

The Dutch Work and Income (Capacity for Labour) Act (Wet Werk en Inkomen naar Arbeidsvermogen).

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Gecontroleerd op: 09-01-2019