NN CDC Pensioenfonds tries to increase the pensions of current and former NN Group employees and pensioners to keep up with inflation. For 2017, a partial increase equal to 0.09% of your pension is allowed. The unused portion of the indexation may be granted in a future year. This article explains how indexation works.

Annual increases of pensions (indexation) are important because they ensure that your pension retains its purchasing power. Once a year, NN CDC Pensioenfonds determines whether and how much it can increase pensions to keep up with the Dutch consumer price index from October to October.

Policy funding ratio as a reference
By law, indexation is only allowed if a pension fund’s policy funding ratio is higher than 110%. NN CDC Pensioenfonds takes its policy funding ratio on 30 September as a reference point. The policy funding ratio is equal to the average funding ratio for the preceding 12 months. Using the average ratio as a reference ensures that the important decision of indexation does not hinge on the funding ratio at one point in time.

Full or partial
Full indexation is allowed if the pension fund’s policy funding ratio is approximately 128%. For 2017 this would have meant increasing pensions by 1.34%, which is the overall consumer price index for households in the Netherlands, published by Statistics Netherlands (CBS) for the months October 2016 through October 2017.

Given that the policy funding ratio on 30 September 2017 was 111,2%, full indexation for the year 2017 is prohibited by law. The fact that NN CDC Pensioenfonds has in place a recovery plan is irrelevant in this respect.

Unused indexation
The unused portion of the indexation is recorded in the pension fund's accounts. As soon as the pension fund’s policy funding ratio exceeds approximately 128%, the fund will be able to increase pensions to make up for the unused indexation.

Pensioenfonds ING increases pensions
Do you also have a pension accrual in Pensioenfonds ING? This pension fund was allowed to fully increase pensions in 2017 based on collective labour agreement (cla) salary raise or price index, depending on your situation. The fund applies its average real funding ratio as a reference.

How to stay informed
Read about the pension fund's financial position on the website and in our newsletters. The pension fund also publishes frequently asked questions and answers, including differences in the indexation policies of NN CDC Pensioenfonds and Pensioenfonds ING.