ING CDC Pension Allocation | Indexation Of Pension
Pension supplementation
Maintaining spending power
Indexation of pension is important for you, because it ensures that the spending power of your pension is kept at the same level. Once a year, ING CDC Pensioenfonds determines whether or not it will be able to grant indexation, based on the consumer price index from October to October. The pension fund makes sure its decision to grant indexation is in line with legislatory and regulatory requirements, as well as with the agreements made by the social partners as part of the CDC pension plan.
Key to determining whether or not a pension fund may grant indexation and at what rate is the pension fund’s policy funding ratio, which is equal to the 12-month-average funding ratio.
If a pension fund’s policy funding ratio falls below 110%, the pension fund is not allowed to grant indexation. If a pension fund’s policy funding ratio is above 110%, the pension fund is allowed to grant indexation, subject to the condition that the fund will be able to continue granting its participants this indexation in the long term. This is referred to as ‘future-proof indexation’. The idea behind this rule is that indexation of pension will be spread evenly across generations as a result.
Moreover, the ability to grant indexation may also be restricted if the pension fund has a recovery plan stating that indexation would hinder the recovery of the pension fund’s funding ratio.
Policy funding ratio as at 30 September is reference
ING CDC Pensioenfonds’ policy funding ratio as at 30 September 2015 serves as the reference for calculating the maximum rate of indexation that the pension fund would be allowed to grant. The board then decides what rate of indexation of pension would be future proof. This is expressed as a percentage that is multiplied by the price inflation rate, which in our case is the consumer price index published by Statistics Netherlands (CBS).
Inflation-proof pension
ING CDC Pensioenfonds tries to raise the level of your pension every year, in order to keep up with consumer prices. This is referred to as indexation. The level of future indexation depends on the pension fund’s financial means. The fund does not have a reserve for indexations.
As a measure of price inflation, our fund uses the Central Bureau of Statistics (CBS) price index. The price index at the end of October 2022 was 128.98. The price index at the end of October 2023 was 127%.
Since its started date (1 January 2014), your pension fund has provided the following indexation:
- 0.00% over the year 2023, when consumer prices dropped with 1.98%
- 4.58% over the year 2022, when consumer prices rose with 16.93%
- 0.00% over the year 2021, when consumer prices rose with 3.28%
- 0.00% over the year 2020, when consumer prices rose with 1.12%
- 0.00% over the year 2019, when consumer prices rose with 1.73%
- 0.87% over the year 2018, when consumer prices rose with 1.68%
- 0.07% over the year 2017, when consumer prices rose with 1.34%
- 0.00% over the year 2016, when consumer prices rose with 0.36%
- 0.19% over the year 2015, when consumer prices rose with 0.44%
- 0.00% over the year 2014, when consumer prices rose with 0.75%
We expect that we will not or not fully be able to increase your pension over the next few years.
Frequently asked questions
For more information, click on the questions below.
What is the difference between the indexation policies of ING CDC Pensioenfonds and Pensioenfonds ING?
ING CDC Pensioenfonds bases its pension increases (indexation of pension) for employees, former employees and pensioners on inflation rates (i.e. rising prices).
Pensioenfonds ING bases its pension increases for employees (as well as a group of pensioners and former participants) on wage increases agreed under the Collective Labour Agreement (CLA).
Who determines the pension increases?
The employer and the trade unions (together referred to as the social partners) decide whether pension increases will be based on rising prices or CLA wage increases. The pension fund boards then decide whether or not the pension increases will be granted and at what rate.
I work at ING and have accrued part of my pension in Pensioenfonds ING. Which pension increases are relevant to me?
ING CDC Pensioenfonds:
When this pension plan started in 2014, the employer and the trade unions decided that everyone would be entitled to receiving pension increases in line with inflation rates (i.e. rising prices).
Pensioenfonds ING:
Employees of ING Bank are entitled to receiving pension increases in line with wage increases under the CLA for ING Bank and employees of NN are entitled to pension increases in line with wage increases under the CLA for NN Group.
I no longer work at ING / am a pensioner and have accrued part of my pension in Pensioenfonds ING. Which pension increases are relevant to me?
ING CDC Pensioenfonds:
Since 1 January 2014, former employees and pensioners have been granted pension increases in line with rising prices.
Pensioenfonds ING:
Most pensioners and former employees are granted pension increases in line with rising prices. There is also a group of pensioners and former employees who are granted pension increases in line with wage increases under the CLA.
How does the pension fund determine the rate of pension increases?
ING CDC Pensioenfonds:
This pension fund takes its policy funding ratio as at 30 September as a reference for calculating the maximum pension increase for that year. The pension funds comply with the regulatory requirements of the new Financial Assessment Framework. This means a calculation is made to determine at what rate pension increases will be affordable in future years (future-proof indexation). This is expressed as a percentage that is multiplied by the price inflation figure, which in our case is the “overall consumer price index for households in the Netherlands” as published by Statistics Netherlands (CBS).
Pensioenfonds ING:
Since 2015, pension increases granted by this pension fund have been dependent on the pension fund's average real funding ratio instead of on funds made available by the employer (or former employer). When making decisions on pension increases, the pension fund uses a progressive scale as a reference. If the pension fund's average real funding ratio reaches 89% in 2018, it will be able to grant the maximum pension increase allowed by law.
When do the pension funds publish their decisions on pension increases?
ING CDC Pensioenfonds:
The pension fund publishes its decision regarding a pension increase on its website in December.
Pensioenfonds ING:
For those who are entitled to receiving pension increases in line with rising prices, the pension fund publishes its decision regarding a pension increase on its website in December. Decisions regarding pension increases based on wage increases under the CLA are published in the month preceding the wage increase.