All about your pension in 2022

The current pension plan is due to expire on 31 December 2021. New agreements were needed to execute your pension after that date.

The social partners (the employer and the trade unions) have decided to extend the current pension plan at NN CDC Pensioenfonds for another nine months. As part of the extension, it has been agreed that the targeted accrual rate for pensions will be lowered from 1.875% to 1.5% until 1 October 2022.

The pension fund has assessed whether the fixed 30% contribution will be sufficient to fund the targeted pension accrual of 1.875%. Unfortunately, that will not be the case due to low interest rates.

Your old age pension will accrue at a rate of 1.5% instead of the targeted 1.875%.

Your risk-based partner pension insurance will remain the same (1.3125%), as will your orphans’ pension (0.2625%).

For your pension accrual in 2022 there is no difference between a reduction of the targeted accrual rate and a cutback of your pension accrual. However, a reduction of the targeted accrual rate is reflected in your Uniform Pension Overview (UPO): for future years, the calculations in your UPO will be based on a 1,5% pension accrual rate. By contrast, if your pension accrual is cut back, your UPO will reflect the full targeted accrual rate (in this case 1.875%) for the years after the year of the cutback.

By 1 October 2022, the social partners want to reach agreement regarding a pension agreement that will incorporate most of the terms and conditions of the new national pension agreement. This means next year will be a bridge year.

That is unknown at this point in time. It will be up to the social partners to make new agreements in this regard.

No, it cannot. The pension fund has no influence on interest rates. Its calculations are based on the incoming pension contributions and the cost of pension accrual. The lower the interest rate, the higher the cost of pension accrual.

The pension fund calculates how much cash it needs to set aside in order to pay out pension benefits now and in the future. These are our pension commitments. When we make that calculation, we are required to apply current interest rates. The lower the interest rate, the more cash we need to keep at hand. Given that interest rates have been extremely low for many years already, the pension fund needs to set aside a lot of money. This causes the pension fund's funding ratio to decline because the fund's pension commitments are higher than its pension assets.

The pension fund cannot use return on investments to build up more pension. This is because these returns are needed to enable payment of pension benefits in the future and pension increases to keep up with inflation. For more details, please visit the website.

No, it is not relevant. The level of the funding ratio is relevant to decisions regarding possible reductions of accrued pension rights. NN CDC Pensioenfonds is currently not in a situation of a possible reduction of accrued pension rights.

No, it cannot. It has been agreed that the employer pays a fixed contribution of 30% into the pension fund. Your employee’s part of this contribution is 6% (in 2022). The employer pays the other part (24%). Moreover, the pension plan is a CDC fund, which means its participants bear the risks. In a CDC fund, the employer cannot make additional contributions when the pension fund’s financial situation declines. Conversely, the pension fund cannot return funds to the employer if the fund has a surplus.

No, the reduction of the pension accrual from 1,875% to 1.5% will only affect the period from 1 January 2022 until 1 October 2022. All pension rights accrued before that date will remain unaffected.

No, only the targeted accrual rate will be reduced from 1.875% to 1.5% until 1 October 2022. This will not have any impact on current pension benefits.

Every year in December, you receive a personal letter regarding your pension accrual for the year ahead. This letter is posted in your secure My Pension.

Find out how much your pension is worth and take action if your pension isn’t as much as you’d like it to be. Log into ‘Mijn Pensioenoverzicht’ provided by the Dutch government or to the Pension Planner provided by your pension fund.