While the CDC pension plan is the same for all employees of ING, everyone’s personal situation is different. Solidarity is a fundamental principle of the CDC pension plan, meaning that all results, positive as well as negative, will have to be shared by all employees alike.
The CDC pension plan works as follows:
- ING pays a fixed contribution to ING CDC Pensioenfonds every year.
- You build up pension entitlement for the salary you earn (up to € 11,483 salary per month in 2024). This amount is adjusted annually to correspond with the maximum amount allowable for tax purposes). This is referred to as your pensionable salary.
- Your state old-age pension accrual (AOW) is taken into account, which is why a part of your salary does not accrue pension. This part is called the threshold for pension accrual (franchise).
- The accrual ambition is 1,768% of your pension base in 2024, provided the contribution is sufficient. Your pension base is equal to your maximum amount of pensionable salary minus the threshold for pension accrual (franchise).
- As long as you remain employed by ING, the pension base that corresponds to your pensionable salary accrues pension every year. This is what we call an average salary system.
- The contribution is invested. Return on the investments is needed to pay your pension and to fund future indexation. Indexation is important because it helps maintain the purchasing power of your pension despite inflation. Return on investment is unpredictable, which is why (full annual) indexation of your pension cannot be guaranteed and you cannot be sure your pension will keep pace with annual inflation rates.
- Contributions may be insufficient and return on investments could be disappointing. This will result in less pension accrual and less indexation, or none at all. Ultimately, your pension may be lower than expected. In the CDC pension plan, this risk has been shifted to you personally. Your pension accrual and indexation are conditional upon the level of ING CDC Pensioenfonds’s financial resources being adequate.
This means that if the result is below expectations, the employer will not make supplemental payments. Reason enough for you to spend some time studying your pension.
View here the roadmap of your pension.
If you work at ING, this is important for you to know.
