With effect from 1 January 2019, NN CDC Pensioenfonds is raising pension accruals and pensions drawn by 0.87% based on price index. This is the maximum rate of indexation allowed under current legislation and regulations. The board’s decision benefits all current employees, former employees and pensioners of NN Group who are currently building up pension or receiving pension benefits from NN CDC Pensioenfonds.
Indexation of pensions is important, as it ensures that a pension’s spending power is maintained. Once a year, NN CDC Pensioenfonds decides whether or not indexation is feasible. For the year 2018, the board of the fund has decided to grant indexation at a rate of 0.87%.
Indexation rate
The pension fund takes the consumer price index published by Statistics Netherlands (CBS) for October 2017 - October 2018 to determine the fund’s indexation rate. The consumer price index for the said period amounted to 1.68%.
By law, the pension fund is only allowed to grant indexation if, given the reserves the fund has in place at that time, it can ensure continued indexation to all of its participants in the long term. Every year, the pension fund determines the rate of indexation available for that year based on the fund’s policy funding ratio and the total level of its reserves. The pension fund then determines what percentage of the consumer price index it will be able to grant.
Calculating the indexation rate for 2018
Taking into account its policy funding ratio as at 30 September 2018, the pension fund has calculated that the maximum allowable indexation rate for 2018 year would be 51.9% of the consumer price index. The pension fund’s board has decided to grant the maximum allowable indexation rate, which is (51.9% * 1.68% =) 0.87%.
Further information
For more information about NN CDC Pensioenfonds’ indexation policy, click here.
If you were employed by NN Group before 1 January 2014, please click here to read about the indexation policy of Pensioenfonds ING. Indexation at Pensioenfonds ING (price index or wage index) might differ from indexation at NN CDC Pensioenfonds (price index).
