What if the pension contributions in a given year are insufficient to build up your pension for that year? What do you think will happen? In our annual TNS NIPO survey, we asked employees of NN Group this question. Read some of their answers below, and then read the correct answer.

All employees of ING build up pension in NN CDC Pensioenfonds. CDC stands for Collective Defined Contribution, meaning the annual contribution is fixed. Your pension accrual and pension increases are conditional and dependent on the financial position of NN CDC Pensioenfonds. 

Are you aware of the risks?
The risk that your pension will not be enough to cover your future needs or wishes is your own risk. That's why you should study the conditions of your pension plan, and understand what your pension fund is doing to keep its financial position in good order. One of the questions in the TNS NIPO survey was: ‘What happens if the pension contributions are insufficient to build up your pension?’

Use return on investment as compensation?
The following score was given to the reply ‘nothing needs to be done, because the deficit in the pension contributions is automatically compensated by the long-term return on investments’:

True: 16%

False: 56%

Don't know: 28%

The correct answer:
The pension fund does not use return on investments to compensate a deficit in the contributions. Nor do the pension fund and/or the employer make additional payments to the pension fund. And the contributions paid by the employee are not raised either. The deficit does have consequences for your pension accrual. Before the year begins, the pension contribution rate for that year is determined. If the contributions turn out to be insufficient, your pension accrual for the following year will be lower. Please be aware of that.

More information
You can check your pension fund's financial situation regularly. We post updates on the website, send digital newsletters and publish quarterly reports. You can read the current recovery plan and a list of frequently asked Q&A regarding the recovery plan. If you cannot find the answer you are looking for, please contact the Pension Desk.