The actuarial and technical business report issued by the pension fund’s Managing Board, specifying the actuarial and technical business plan applied by the fund.

Dutch Authority for the Financial Markets.
The AFM is responsible for supervising the operation of the financial markets.

ALM is the abbreviation of Asset Liability Management. An ALM review analyses how a pension fund manages the risk of imbalance between its assets and liabilities. The review aims to reveal the interdependencies and the relation between changes in the pension fund’s rights and commitments. The ALM should result in the definition of a strategic investment policy.

The Dutch Surviving Dependants Benefits Act

The Dutch General Old Age Pensions Act. With effect from the day you reach your retirement age, the Dutch government will pay you an old age pension (AOW). This is in fact your base income, and the amount is dependent on your personal circumstances. If you ever lived abroad, your AOW pension might be lower. AOW pension is administered, on behalf of the government, by the Dutch Social Insurance Bank (SVB).

Decrease of your pension accrual because the fixed contribution is not sufficient to fund the maximum pension accrual allowable.

As a pension plan participant, you accrue pension for every year that you participate. The rate of your pension accrual is expressed as a percentage of your pension base.

The actuary provides an analysis of the effects of differences between the actuarial principles applied and the actual developments.

The maximum interest rate (the return) pension funds are allowed to apply when calculating the value of their future commitments.

An actuary applies actuarial principles to calculate the present value of a series of future pension commitments. Examples of actuarial principles: actuarial interest rates, probability rates (e.g. mortality rates, occupational disability and revalidation rates, marriage rates, future salary trends or indexation policies) and surcharge rates (e.g. for administrative and/or payment charges).

A person who calculates the probability rates of future risks.

An agreement between the employer and the pension fund regarding the administration and funding of the pension plan by the administrator.

The Appeals Board for Pensions is an independent institution that handles disputes regarding the administration or interpretation of pension regulations.

Classification of assets such as equities, fixed income (bonds), real estate and cash.

The combination of different asset classes.

The Committee reviews the Managing Board’s performance once a year. Its members are appointed by the Managing Board upon binding nomination by the Supervisory Organ. The Committee’s duty is to review the Managing Board’s policies and the general state of affairs in the pension fund. The Committee comprises three independent individuals.

A pension system under which a person’s old age pension benefits are based on his/her average salary level throughout his/her career.

The Dutch Municipal Personal Records Database

A predetermined, objective benchmark for the assessment of the performance of an investment portfolio or pension fund. Example: a stock exchange index.

The board bureau provides the managing board with support in preparing and executing policies.

A debt instrument for a loan issued by a company or government institution, which is traded on the exchange or over the counter (o.t.c.).

CDC stands for Collective Defined Contribution. It is collective because the defined (fixed) contribution is determined for the group of pension fund participants as a whole. The annual contribution is fixed, while the ultimately payable pension benefits are not. You bear the risk that your pension is less than what you need or what you thought it would be.

The Consumer Price Index, as published by Statistics Netherlands (CBS).

In certain situations, we can pay out your entire pension as a lump sum. This is conditional on your pension being lower than 50% of the statutory commutation level. Please read the pension regulations (Dutch only) for more information.

Payments made to the pension fund by the employees and the employers, which serve to fund the pension.

If you cease to participate in a pension plan for reasons other than death or retirement, your entitlement to old age pension, partner pension and orphans’ pension continues on a contribution-free basis. Please read the pension regulations (Dutch only).

A pension fund set up for a specific company rather than an industry or sector as a whole.

Abbreviation of Defined Benefit, which means the ultimately payable pension is fixed.

The Dutch central bank. As the financial regulatory authority for the Netherlands, DNB is committed to the financial system being reliable, with institutions meeting their obligations.

Financial contracts that derive their value from other assets, such as shares or oil. The most common derivatives are options, futures, swaps and forwards. Financial derivatives are used for reducing risks or for speculative purposes.

Disability risk is also one of the insurance risks a pension fund is exposed to.

A pension fund is exposed to early mortality risk for surviving dependents’ pension, if the insured parties’ lives are shorter than expected according to the mortality tables.

Term that investors use to describe a developing country, in which investment would be expected to achieve higher returns but be accompanied by greater risk. Global index providers sometimes include in this category relatively wealthy countries whose economies are still considered underdeveloped from a regulatory point of view.

With effect from your retirement date, you may lower (or raise) the level of your partner pension in exchange for higher (or lower) old age pension. This option is subject to certain conditions. Please read the pension regulations (Dutch only).

Your annual pension accrual, based on a calendar year. You use this figure to calculate whether you can take out an annuity as a supplement to your pension in order to fully utilise your tax allowance.

A pension system under which a person’s old age pension benefits are based on his/her last-earned salary.

Collective of asset classes which generate periodic income such as mortgages and bonds.

Threshold for pension accrual.
The lower portion of your salary does not accrue pension, as you will be receiving old age pension from the Dutch state (AOW) for this portion. 

The funding ratio indicates whether the fund’s financial position on a certain reference date is adequate enough to pay out pensions accrued now and in the future. The higher the funding ratio, the better the fund’s financial position. A funding ratio of 100% indicates that the fund’s financial position on the reference date is adequate enough to pay out pensions that have been built up in the fund.

An investment strategy to preserve capital against possible undesired risks.

This allows you to opt for lower (or higher) pension benefits during the first period of your retirement, followed by higher (or lower) pension benefits later on in your retirement. Please read the pension regulations (Dutch only) for more information.

Pension accrual or pension benefits may be increased to stay in line with rising prices or wages.

Indexation refers to pension benefits or pension entitlements being increased in order to stay in line with increased prices or wages.

An increase in the overall level of prices, as a result of which you buy less with the same amount of money.

Including:
1. Longevity risk 
A pension fund is exposed to longevity risk when insuring old age pension entitlements, if the insured parties’ lives are longer than expected according to the mortality tables applied.

2. Early mortality risk 
A pension fund is exposed to early mortality risk for surviving dependents’ pension, if the insured parties’ lives are shorter than expected according to the mortality tables.

3. Disablity risk
Disability risk is also one of the insurance risks a pension fund is exposed to.

An interest rate risk can be hedged with an interest rate derivative, or an interest rate position can be taken. See also derivatives.

The relationship between the maturity of a fixed-interest investment and the market interest rate to be received on the investment.

The allocation of asset classes to a portfolio.

A life certificate serves as evidence that a person is alive. The pension fund requests all pensioners living abroad to submit a life certificate, as the Dutch municipalities do not provide the pension fund with such information. A completed life certificate requires an official stamp or statement from a Dutch embassy, consulate, municipal registrar or civil-law notary in the pensioner’s country of residence. Subject to receipt of the certificate, the pension fund continues paying out benefits.

A pension fund is exposed to longevity risk when insuring old age pension entitlements, if the insured parties’ lives are longer than expected according to the mortality tables applied.

ING CDC Pensioenfonds is managed by a board representing the interests of the employees, the pension fund participants and the employer. The Managing board comprises seven members: three members representing the employer and four members representing the employees.

The primary objective of the matching portfolio is to finance the (nominal) pension rights.

Maximum amount allowable for tax purposes.

A table showing the life expectancy and mortality rates of men and women in the Netherlands in terms of age. Actuaries use these tables to calculate a pension fund’s provision for pension commitments.

Pension benefits that are paid out to you from the day you retire until the day you pass away.

A tradeable right to buy (call option) or sell (put option) an underlying value (e.g. shares) for a pre-determined price within an agreed time period.

The CDC pension plan allows you to stop working on a part-time basis and take up part of your pension. You will then receive part-time pension benefits. It is important to note that the total amount of your pension benefits will be lower as a consequence of doing this. Please read the pension regulations (Dutch only) for more information.

Pension benefits that are paid out to your partner after you pass away.

A participant is an employee or former employee who builds up pension in ING CDC Pensioenfonds.

The person you are married to or who is registered as your partner at the municipal register. A person with whom you are cohabitating is also considered a partner if he/she has been reported to the pension fund in accordance with the pension regulations. It is important to note that if you marry or enter into a registered partnership or cohabitation after your retirement date, your partner is not eligible for partner pension. Please read the pension regulations (Dutch only) for more information.

A past participant no longer builds up pension entitlements in ING CDC Pensioenfonds.

The amount that is taken as the base to calculate your pension accrual. This amount usually constitutes your pensionable salary less the AOW threshold for pension accrual (franchise).

A person receiving payments under old age pension, partner pension or orphan’s pension.

Your entitlement to future pension benefits.

The set of agreements regarding pension for employees and their partners and children. Take a look at the pension regulations (Dutch only).

The standard age for retirement is 67. However, you may choose to retire at a different age anywhere between 60 and 67.

You build up pension for the salary you earn in a given year.

Return on the pension fund’s investment portfolio.

The policy funding ratio is equal to the average of the funding ratios for the preceding twelve months. With effect from 2015, the policy funding ratio provides the fund with a benchmark for making policy decisions, such as determining the amount of headroom available for indexation and the adequacy of the fund’s reserves. By taking the average for the preceding twelve months, important decisions no longer hinge on the funding ratio prevailing on any given date.

The amount that needs to be held by the pension fund to meet future pension commitments, taking into account interest accrued at the actuarial interest rate and any other actuarial principles applicable.

Equity capital that is not quoted on a public exchange.

This funding ratio provides a more realistic view of the purchasing power a pension will have, as it includes an estimation of future indexations. Starting in 2015, pension funds calculate the real funding ratio once a year, as part of their annual accounts.

Insurance bought by a pension fund to fully or partially cover its pension commitments or exposure to high risks, such as mortality risk or occupational disability risk.

The date with effect from which your old age pension benefits are paid out to you. Under ING CDC Pensioenfonds, this date is the day you turn 67. You may retire before or after this date, but remember: the longer you work, the higher your pension benefits will be.

See performance.

The primary objective of the return portfolio is (in time) to achieve sufficient return in order to enable the indexation of pensions.

Since 2007, pension funds’ financial positions and policies have been subject to the Dutch central bank’s Financial Assessment Framework. On 1 January 2015, the Revised Financial Assessment Framework took effect.

The Dutch Social Insurance Bank (SVB) is the administrator of several benefit schemes, including the Dutch state old age pension (AOW).

After a divorce or termination of a registered partnership, the ex-partner is entitled to a portion of the participant’s (or past participant’s) pension benefits. However, the divorced or former partners may agree to deviate from this rule. Please contact the Pension Desk for more information.

A unit of ownership interest in a company.

The market price of a share, bond or other security.

A debt security issued by a national government (country).

If your relationship ends, your former partner is entitled to a portion of the partner pension accrued until the end of your relationship. It is important to note that your relationship must have begun before your retirement date. Moreover, you and your former partner can agree that he/she waives his/her right to partner pension. If you are cohabitating, your former partner is only entitled to special partner pension if he/she was registered with the pension fund. Please read the pension regulations for more information.

The organ to which the Managing Board is accountable and in which the pension fund participants and the employers are represented.

Umbrella term for partner pension and orphans’ pension

Uniform Pension Overview. An annual summary showing how much pension you have built up so far and how much you are likely to build up in total.

The Dutch Institute for Employee Benefit Schemes. This institute carries out the administration and execution of Dutch employee insurance schemes such as the Sickness (Benefits) Act, the Unemployment (Benefits) Act and the Work and Income (Ability to Work) Act.

Fluctuations in the prices of (an) underlying security(ies).

The rate of the overall wage increase provided by the employer, as agreed under the employer’s collective labour agreement.