The board of your pension fund sets out to increase your pension in line with inflation each year. This way, your pension retains its value. We base this on, among other things, the price increase measured from October to October. This year, prices did not rise during this period, but fell slightly. For that reason we are not increasing pensions on 1 January 2024; they will remain unchanged.
What is inflation?
Money usually becomes worth slightly less as each year passes. That means you can buy slightly less next year with €100 than you do now because prices have risen. This is what we call inflation. We know by how much prices rise because Statistics Netherlands keeps records.
What is indexation?
If prices rise and your pension does not, your pension loses value. To make sure your pension retains its value, we try to increase your pension each year in line with price rises. This is known as indexation. We base this on the Statistics Netherlands price index measured from October to October. This is stipulated in our pension regulations.
The principles for indexation
When making a decision about indexing, these principles are in any case taken into account:
- the level of the fund's coverage ratio
- the indexation rules as laid down in the pension regulations
- the period and the criterion for determining the level of indexation
These three important principles together form the basis for the decision whether or not pensions can be increased.
Why are pensions not being increased this year?
We understand that not increasing the pensions is a disappointing message for you. In order to increase pensions, we must comply with the rules that the employer and the pension fund have agreed on. For example, the fund's financial position, the policy funding ratio, must be sufficient for an increase. The policy funding ratio was 130.1% in December, which is sufficient for (partial) indexation. Then we look at the increase in prices (the cpi published bij CBS) in a certain period of time. This year, prices in the period from October 2022 to October 2023 did not increase, but fell slightly by 1.98% compared to the same period last year. Therefore, your pension will not be increased from 1 January 2024, but will remain the same.