Home/Pensioenfonds TNO/English/Overview defined Contribution

Overview defined Contribution

Overview defined Contribution

The defined Contribution scheme

These are defined contribution schemes aimed at accruing pension capital. As of 1 January 2012, it is only possible to pay from gross salary into the extra pension scheme; it is no longer possible to pay into the temporary old-age pension (TOP) scheme. Payments from net salary into the net pension scheme is possible as from 1 January 2015 in respect of pensionable income over €100,000 (€114,866 2022). Capital accrued in the TOP scheme as at 31 December 2011 will remain available for a temporary old-age pension. Any capital remaining on the retirement date must be used towards a life-long pension, possibly in combination with a life-long partner pension.The scheme has the following features:

1 January 1996 for the TOP scheme;1 January 2012 for the extra pension and temporary old-age pension schemes; and 1 January 2015 for the net pension scheme.

Employees may be participants. The start date of their participation is the start of the premium payments. No new participants are allowed in respect of the TOP scheme.

Starting from the start date of participation.

This is a scheme for the accrual of capital to provide an extra old-age pension, advanced payment of old-age pension, a temporary old-age pension, or an AOW (state old-age pension) bridging pension. As of 1 January 2015 over the pensionable income up to the maximum for tax purposes of € 100,000.

As of 1 January 2015 there is also the option to accrue capital for a net pension for pensionable income above the maximum for tax purposes of € 100,000.

For the extra pension and net pension schemes, this is the target retirement age for tax purposes of age 68 (2018); For the TOP scheme this is the start date chosen by the participant him/herself within the limits set by the scheme. – See below alongside ‘postponed and advanced start date’.

This is dependent upon the amount paid in (see below), the yield achieved and/or the interest received hereon, and salary increases.

The extra pension and net pension schemes are voluntary and at the participant may pay in at his/her own expense and risk a premium up to the maximum as specified in the table accompanying the relevant rule. The participant can stop payment of this monthly sum, or change the amount. A single payment per calendar year is possible provided that this does not exceed the maximum specified in the premium table. No further premium payment is possible in respect of the TOP scheme operating up to 1 January 2012.

TNO Pension Fund administration costs
The costs for administering the extra pension, net pension and TOP schemes are fixed by the TNO Pension Fund at 0.08% per year of the invested assets including funds in any savings account under this scheme. For such purpose at the request of the TNO Pension Fund 0.02% will be deducted by NN IP from the investment account and any savings account quarterly in arrears.

NN IP general administration costs
NN IP charges general administration costs of 0.32% per year, charged quarterly in arrears (0.08% per quarter).

For some investment funds, the fund provider stipulates a standard discount. This discount will be set off per quarter against the general administration costs of 0.08% to be collected.

Payment for administration costs will be deducted by NN IP, on behalf of the Pension Fund, firstly from the cash position in the Investors Giro Accounts or the Savings Account administration. If there is an insufficient cash balance, it will be deducted from the value of the portfolio(s) of the participant in the Investors Giro Accounts.

The calculation is based on the average of the assets in the Investors Giro Account of the relevant participant invested in that quarter and also on any relevant average capital invested in the relevant quarter in the Savings Account Administration. The average invested assets or capital is calculated by NN IP on a daily basis.

The choice of a pension start date between the ages of 59 and state retirement age for the TOP scheme and the choice of start date between the ages of 58 and 72 for the extra pension and net pension to coincide with the start date of the old-age pension from the average salary scheme.

The choice – subject to the consent of the employer – to take the extra gross pension and/or net pension in the case of an advanced start date of the pension under the average salary scheme and/or the temporary old-age pension in combination with continued work on a part-time basis (part-time pension).

The available premium is paid into investment funds and/or an interest-bearing account as designated by the Pension Fund. The investment fund and the interest-bearing account are separated from the Pension Fund’s investments. At the moment that the pension becomes payable, the available capital is transferred to the Pension Fund.

The available capital from the available premium and the yield and/or interest earned thereon as at the date of termination of employment. The capital from the extra pension and net pension schemes must be converted into a pension entitlement, except in the case of a value transfer. The entitlement in the event of termination of employment under the TOP scheme is the capital from the TOP scheme which, depending on the investment results, may go up as well as down.

The participant may convert the available capital into a pension to supplement the work disability pension under the basic scheme. The exemption from payment of premiums in the event of work disability is not insured.

The available capital is converted to an immediately payable supplemental life-long partner pension to benefit surviving dependants; this surviving dependants’ pension and is paid gross from the extra pension scheme (and net from the net pension scheme with regard to the pensionable income above the maximum sum for tax purposes of €100,000). If there are no surviving dependants, the capital reverts to the Pension Fund. Surviving dependants could choose before 1 January 2014 cut back on the purchase of the life-long partner pension on the basis of a temporary statutory scheme, but this statutory scheme was ended as of 1 January 2014. There is also the possibility to select a different administrator for the use of the capital (‘shop-around’ option).

The available capital from the extra pension and net pension schemes is used to coincide with the start date of the pension under the average salary scheme. The available capital from the TOP scheme is used at the start date to provide a temporary old-age pension, provided that the start date for this is before the state retirement age. If there is capital remaining at state retirement age or the start date for the life-long retirement pension (whichever occurs first), this remaining capital will be used to purchase a life-long retirement and partner pension. The participant could choose before 1 January 2014 cut back on the purchase of pension on the basis of a temporary statutory scheme, but this statutory scheme was ended as of 1 January 2014. There is also the possibility to select a different administrator for the use of the capital (‘shop-around’ option).

No increase has been applied to the temporary old-age pension obtained from the capital.

The participant uses the available premium and the capital to invest at his/her own expense and risk in the investment funds and/or the interest-bearing account. The participant must supply a self-assessed risk profile via an online duty of care tool. The investments are tested half-yearly against this self-selected risk profile.

Individual value transfer is possible in line with statutory provisions and provided that the coverage ratio of both the transferor and transferee pension fund is at least 100% at the end of the relevant calendar month. A collective value transfer is subject to specific additional conditions. If the value of the entitlements under the average salary scheme are transferred, any capital under the extra pension, net pension, and TOP schemes will also be transferred. These sums of capital cannot be kept with the TNO Pension Fund.