No indexation for 2021

ING CDC Pensioenfonds tries to increase the pensions of ING’s current and former employees and pensioners on an annual basis, in order to stay in line with the consumer price index. The pension fund takes its policy funding ratio on 30 September as the reference point.

We were expecting this and you might have read about it in our Summer Special. Unfortunately, ING CDC Pensioenfonds will not be able to increase your pension for 2021.

Policy funding ratio as a reference
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 122%. If its policy funding ratio is between 110% and 122%, the pension fund is allowed to grant partial indexation.

Given that the policy funding ratio on 30 September 2021 was 106.2%, indexation for the year 2021 is not permitted by law.

Omitted indexation will be recorded
The omitted indexation will be recorded in the pension fund's accounts. If at some point in the future the fund’s policy funding ratio rises to an adequate level, the pension fund will consider granting the omitted indexation. However, this is currently not the case.

Important note: In anticipation of the enactment of the new Pension Act on 1 January 2023, a motion has been submitted to the Dutch Lower House of Parliament. The motion would allow indexation when a pension fund's policy funding ratio is 105% instead of the currently required 110%. It is expected that the Lower House will handle the proposal next year. This new development did not have any effect on the indexation decision for 2021.

Further information
Would you like to have more details on indexation by ING CDC Pensioenfonds? Click here for background information. In early 2022, you will receive a letter explaining the decision to cancel indexation for 2021. To read the letters you received in the past regarding indexation, please click here.