After several ‘lean years’ for your pension, times are changing for the better! This is because interest rates are rising. We expect that we will be able to build up your pension at the full accrual rate with effect from 1 October 2022. We'll also be able to (partly) increase your pension to keep up with inflation.

In recent years, the pension fund has had to manage your pension amid challenging market circumstances. The combination of a fixed contribution and extremely low interest rates has not been beneficial to your pension accrual. And the pension fund has not been able to increase your pension to keep up with rising prices.

Times are changing for the better, though. Interest rates have risen so steeply in recent months that the pension fund can now give a positive outlook for your pension.

Accrual rate potentially 1.875%
From 1 January to 1 October 2022, your old age pension accrues at 1.5%. This was agreed by the social partners (the employer and the trade unions) in late 2021. If the pension fund continues to administer your pension plan after 1 October 2022, it expects that it will be able to build up your pension at the maximum rate allowed under Dutch tax law, if interest rates stay at their current levels or go up even further. That would mean you build up old age pension at 1.875%.

When will you know?
In May, the members of the trade unions will vote on the final offer laid down by NN, the employer. The social partners (employer and trade unions) as well as NN CDC Pensioenfonds will inform you on the outcome. If NN CDC Pensioenfonds continues to administer your pension plan after 1 October 2022, the fund will inform you of this in the third quarter.

Indexation may be possible
As a result of the rising interest rates, the pension fund’s funding ratio has gone up from 112% in January to 126% in April 2022. A higher funding ratio means the pension fund has more cash to enable payment of pensions in the long term. And there’s also more room to increase your pension so it keeps up with inflation (indexation) for the year 2022. That ensures you retain your purchasing power when you retire – and that's good news. Everyone benefits, whether you're currently employed by NN, were employed in the past or are already retired.

Regulations
Whether your pension increases to keep up with inflation in a given year depends on Dutch laws and regulations. The most important factor is the pension fund's policy funding ratio, which is equivalent to its average funding ratio for the preceding 12 months. Your pension can only grow if the pension fund’s policy funding ratio is higher than 110%.

Every year, Statistics Netherlands (CBS) measures the percentage by which consumer prices rise in the Netherlands. If NN CDC Pensioenfonds can increase your pension, it will apply CBS's percentage.

When will you be informed?
Based on the fund's policy funding ratio as at 30 September 2022, the board will decide whether any indexation will be granted. As at 30 April, the fund’s policy funding ratio was 115%. NN CDC Pensioenfonds will inform you after September 2022.

Stay up to date
Pension is a rapidly evolving topic and the pension fund is constantly adapting. If you want to stay up-to-date on developments regarding the financial situation of ING CDC Pensioenfonds <Ingrid dit moet toch NN zijn?> and, more importantly, the implications for your pension, please read our newsletters or visit our website.