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Home Pension scheme Pension 1-2-3 IFF Pension Fund How secure is your pension? What happens if there is a shortfall?

Pension 123 Layer 2

What happens if there is a shortfall?

What happens if there is a shortfall?

If our financial position is not strong enough, we have to submit a recovery plan to De Nederlandsche Bank (DNB). This shows our plan for restoring financial soundness within 10 years. For example, this is possible by not or not fully increasing the pensions in line with the development of salaries or prices over these 10 years.

The recovery may take less than 10 years, or it may take longer. In the latter case, additional measures may be needed. This could involve a longer period with no increases. Another possibility is to increase the contribution. Or, in the most extreme case, a reduction of the pensions.

When do we have to curtail?

  • We have to curtail the pensions if the recovery plan shows that we cannot recover a shortfall situation within 10 years,
  • or if the pension fund’s funding ratio is lower than the minimum regulatory own funds for more than 5 years.

Measures potentially for everyone

These measures will apply to all members of the fund: anyone who is still accruing a pension, but also pensioners and people who have previously accrued a pension with us but have left employment with IFF. For pensioners, a curtailment will mean an immediate loss of income.

Outlook for the coming years

There is a high chance that we will be able to increase your pension (partially) in the next few years. The chance that we will be able to increase your pension in full over the next five years is small. Currently, we do not expect a reduction in your pension will be needed. For the next five years, the chance of a reduction in your pension is small, but not excluded.

Frequently Asked Questions

This can happen when:

  • The policy funding ratio is less than the minimum required funding ratio (104.1 %) and the most recent reading of the current funding ratio is less than 100%. Curtailment in this case is unconditional, but it may be spread over time (up to 10 years). 
  • should the pension fund not achieve the required level of own funds within 10 years, a further curtailment may come into force.

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