Normally, money becomes worth slightly less every year. You can buy less with the same amount of money a few years from now than you do now. This is called ‘inflation’. That is why we try to let pensions grow along with price increases. Pensioenfonds Witteveen+Bos uses the system of result sharing.
How does result sharing work?
We can share the result if the pension fund is financially healthy. Every year on 31 October, the board reviews the financial situation according to legally defined and applicable rules.
The pension fund looks at the coverage ratio. The coverage ratio indicates the ratio between the assets (the total assets managed by the pension fund) and the liabilities (the total pensions the pension fund has to pay out now and in the future). The pension fund also has a legal obligation to maintain a reserve. If there are assets ‘left over’ (i.e. more than needed for the mandatory reserve), the board can decide to spend all or part of the money to increase the pension you have accrued or are already receiving. Currently, the coverage ratio must be at least 125% to be allowed to decide on result sharing.
Every year, the board reviews whether result sharing is allowed and desirable.
In recent years, Pensioenfonds Witteveen+Bos has been able to increase pensions as follows:
2024: 5.3% (prices fell by 0,4%)
2023: 5% (prices increased by 14,3%)
2022: 0% (prices increased by 5,7%)
2021: 0% (prices increased by 1,0%)
2020: 0% (prices increased by 2,7%)
2019: 0% (prices increased by 2,0%)
2018: 0% (prices increased by 1,3%)
2017: 0% (prices increased by 1,0%)
2016: 0% (prices increased by 0,7%)
2015: 0% (prices increased by 0,7%)
An increase of the pensions is not guaranteed
Our pension fund has not set aside money to increase pensions. We pay for increases from general reserves. Increases are not guaranteed, but conditional and depend on our financial position and prospects at the time. We cannot make any promises about granting increases in the future.
If no (full) indexation took place in a year, it may be made up later.
In more detail, how do we determine how much to increase pensions?
We look at the policy coverage ratio (the average coverage ratio in the previous 12 months) and the increase in prices.
From 2023, we will increase pensions based on the following rules:
- Is the policy coverage ratio below 110%? Then pensions will not be increased.
- Is the policy coverage ratio 110% or more, but lower than the limit for future-proof indexation? Then we calculate according to the rules for future-proof indexation what percentage of the aspired indexation can be granted.
- If the policy coverage ratio exceeds the limit for future-proof indexation, pensions can be fully indexed using the indexation measure.
Decision on indexation
In January, we calculate the indexation rate according to our rules and the law.
- We take into acount:
- the policy coverage ratio on 31 October of the previous year.
- Price inflation according to Consumer Price Index all households from October to October.
- the requirements of future-proof indexing.
- In January, the board will finally decide whether pensions will be increased. And by how much.
- If pensions are increased, this will take effect on 1 January.
- The percentage increase is the same for all participants.
- If you are already retired, you will receive a higher benefit from January.
- If you are not yet retired, your pension rights will increase.