How secure is your pension?

Your pension is subject to risks

The amount of your pension is not fixed. There is a number of risks that may affect your pension amount:

1. People live longer
   If life expectancy increases, the pension will become more expensive. After all, the pension must be paid for a longer period of time. In that case, the pension fund must set aside more money to be able to pay the pension.
2. Interest rates fall
   Interest rates impact the financial situation of the pension fund as well. The lower the interest rate, the more money we must set aside now. As the interest will yield less income, we must set aside more money for your pension.
3. Disappointing investments
   Pension moneys are being invested. Disappointing investment returns will impact the financial situation.
4. Regulations
   Pensions may become subject to new rules. For example, stricter rules about how much pension you may accrue. Or an increase in the retirement age. This means that regulations may also affect your pension.

We try to increase your pension yearly

Money loses value (nearly) each year. That is why we try to let your pension develop in line with the prices.

You participate in the career average pension scheme
In the career average scheme APF Pension Fund tries to increase the pension each year. This is possible only if our financial situation allows for it. We try to let your pension grow in line with the increase in prices. We decide each year if we can increase your pension and by how much. Unfortunately, we have not been able to fully increase the pensions each year over the past few years.

We increased your pension by 8.73% as at 1 January 2023
Part of this increase was the result of a temporary statutory measure, which allows us to already increase the pensions with a minimum policy funding ratio of 105%. Normally, this ratio is 110%. Between September 2021 and September 2022 prices have risen by 0.21%.

Over the past 10 years, we have made these changes to the pensions in the career average pension scheme
On 1 January 2023, there was a pension increase (over 2022) of 8.73%. And, due to adjusted statutory regulations as of 1 July 2022, the pension fund was in a position to increase pensions as of 1 August 2022 (over 2021) by 2.7%. The table below shows whether an increase in prices has been compensated by an increase in the value of pensions.

*The increase in prices in that period from 1 Januari up to and including 31 December.
** Part of this increase was the result of a temporary statutory measure, which allows us to already increase the pensions with a minimum policy funding ratio of 105%. Normally, this ratio is 110%.
***This increase was the result of a temporary statutory measure, which allows us to already increase the pensions with a minimum policy funding ratio of 105%. Normally, this ratio is 110%.

You participate in the defined contribution scheme
Your pension capital in the defined contribution scheme is not increased by (annual) supplements/indexation.

Your future pension will depend mainly on:
•  the deposited pension contributions
•  the investment returns
•  the pension capital on the retirement date
•  how much pension you can purchase with your capital

If you already receive pension from the defined contribution scheme, or if you no longer participate in this pension scheme and have already purchased pension entitlements with your pension capital, each year the pension fund will try to let your pension entitlements – or pension in payment – grow in line with the increase in prices over the period September – September of the previous year. The maximum increase is 4%.

What happens if we have a deficit

We have agreed a fixed contribution with the employer. Not more, but not less either. Under normal circumstances, the contribution paid by your employer will be more than enough to be able to finance your pension. There are, however, no guarantees. If the pension fund's performance is poor, APF Pension Fund will be responsible for correcting the fund's financial situation. For example, by not granting any indexation or by lowering the pensions.

The financial situation depends on various factors
•  First of all, interest rates play a key role. If interest rates fall, we will have to set aside more money, as a result of which the financial situation will worsen. This can be compared with a savings account. If you need € 1,000.- in 20 years’ time and the interest rate is 1%, you will need to have € 820.- in your bank account now. Together with the interest, you will have accumulated € 1,000.- after 20 years. If the interest rate is 4% rather than 1%, you will now only need to have € 456.- in your account to have € 1,000.- after 20 years. This also applies to pension funds: the lower the interest rates, the more money we will need to set aside.

•  In addition, the investment rates play a role as well. Pension moneys are being invested. Disappointing investment returns will impact the financial situation. We will have less money than expected, as a result of which our financial situation will worsen.

•  Finally, pensions may become more expensive because people live longer. If life expectancy increases, the pension must be paid for a longer period of time, whereas no contribution whatsoever has been paid for it. In that case, the pension fund must set aside more money to be able to pay the pension.

If there is a deficit
If we have a deficit we may have to take measures. These are listed in a recovery plan.

Examples of measures for the career average pension scheme:

•  Your pension will not grow (entirely) in line with prices.
•  Your pension will decrease. This only happens if we have no other options.
•  Your premium will increase.