How is the pension fund doing financially and what is the impact on our services? NN CDC Pensioenfonds understands that its participants are concerned about the impact the coronavirus crisis may have on their pension. This newsletter for May gives you an update on the pension fund's situation.
NN CDC Pensioenfonds regularly posts information on developments that are relevant to your pension.
Developments on the financial markets
Soon after the lockdown measures were imposed in March this year, governments and central banks worldwide responded with measures to support businesses and individuals in these difficult times. Equity markets responded positively to the support measures. Bond markets initially responded with rising yields but the declining trend soon continued. This is slowing down the increase of funding ratios. Click here to see the status of the funding ratio at 30 April. The fund will publish the status as at 31 May in June.
Indexation and pension accrual
As a result of declining funding ratios, it is quite unlikely that the pension fund will be able to increase pensions to keep up with inflation next year. If the policy funding ratio on 30 September 2020 is lower than 110%, the fund will not be allowed by law to grant indexation.
Moreover, if interest rates stay low, the pension accrual rate could be cut back again in 2021. At current interest rates, the cost of your pension accrual is so high that the 30% pension contribution could be insufficient to fund the accrual for 2021. The actual decision on a cutback will be based on interest rates at 30 September 2020. We’ll keep you informed.
We can be reached
As we have been doing in recent weeks, we are continuing to provide most of our services while working from home. The Pension Desk staff is available every day to answer your questions on value transfer, pension options, pension benefits, etc. just like they were before the corona crisis.
