What is the position?
The policy funding ratio (the average funding ratio over the past 12 months) stood at 129,8% at the end of February 2023. The nominal funding ratio at the end of February 2023 was 128,8%.
How does this affect your pension?
In the short term, a low funding ratio has no implications for benefits and pension accrual. The Pension Fund has enough cash to be able to pay the pensions.
We will decide at the end of the year whether we are able to increase the pensions next year, on the basis of the Fund’s financial position at the end of September. The policy funding ratio at that time needs to be at least 110% to allow for full or partial indexation.
The funding ratio of a pension fund specifies the ratio between the assets and the liabilities, and is an indicator of the financial position of a pension fund.
How will my pension keep its value?
We strive to increase your pension each year in line with price inflation. This is known as indexation. This is only possible if the Fund’s financial position is sufficient. The Pension Fund Board decides each year whether the pensions can be fully or partially indexed or that no indexation is possible on the basis of the Fund’s financial position.
How big does the buffer have to be?
According to the rules set by the government, our assets must exceed our liabilities by 14.1% (February 2023). So we have to have sufficient assets to be able to pay the pensions, both now and in the future, plus a buffer of 14.1%. This means we will be able to cope with any unexpected decline in the assets. Currently, the policy coverage ratio of 129.8% (February 2023) is above the required coverage ratio. Thus, the pension fund currently has sufficient financial buffers.