Is your pension set to grow or decline?

ING CDC Pensioenfonds looks ahead at pension increases for 2021 and pension accrual in 2022. So you know what to expect.

Will your pension keep up with rising prices?
Whether your pension rises to keep up with inflation in a given year depends on Dutch laws and regulations. The most important factor is the pension fund's policy funding ratio, which is equivalent to its average funding ratio for the preceding 12 months. Only if the pension fund’s policy funding ratio is higher than 110% will the pension fund be able to increase your pension to ensure your purchasing power is retained despite inflation and rising prices.

Every year, Statistics Netherlands (CBS) measures the percentage by which consumer prices rise in the Netherlands. If ING CDC Pensioenfonds can increase your pension, it will apply CBS's percentage.

Full or partial increase?
The pension fund is only allowed to increase your pension by the full percentage if its policy funding ratio exceeds the level required by law. At present, the required level is around 125%. If its policy funding ratio is between 110% and 125%, the pension fund is allowed to grant partial indexation.

Click here for an overview of the pension fund's increases in recent years.

When will I be informed?
Based on the fund's policy funding ratio as at 30 September 2021, the board will decide whether any indexation will be granted. As at 31 May, the fund’s policy funding ratio was 102%. At present, we do not yet know whether we will be able to increase your pension for 2021 (indexation). ING CDC Pensioenfonds will inform you by the end of 2021.

Will my pension accrue at the maximum possible rate in 2022?
ING and the trade unions aim for pension accrual at the maximum rate allowed under Dutch tax law. The accrual rate is recalculated every year. In 2021 the percentage is 1.784%. In 2020 the percentage was 1.780%.

Every year, the pension fund assesses whether the fixed pension contributions are sufficient to build up your pension at the maximum level allowed for that year. If the contributions are insufficient, the pension accrual rate is reduced. Unfortunately, this has been the case in 2021 and 2020.

How much am I contributing?
Your monthly salary slip specifies how much pension contribution you are paying. It does not show the total amount that is being contributed on your behalf. In 2021, the total contribution was 31.5% of your pension base (i.e. your pensionable salary net of the state pension offset (franchise)). Your part of the contribution is 7.5%. The total contribution for 2022 and 2023 is 30.5%. Your part of the contribution will be 7.5% in those years as well.

When will I be informed?
Interest rates at 30 September 2021 will determine how much pension ING CDC Pensioenfonds will be able to accrue on your behalf in 2022.

• If interest rates have recovered sufficiently, the pension fund will be able to fund the maximum accrual rate from the fixed contribution of 30.5%.
• If interest rates stay as low as they have been over the past two years, the pension fund will apply a lower accrual rate for your pension in 2022. The fixed contribution of 30,5% will in that case be insufficient to fund the targeted accrual rate.