Overview pension scheme defined Benefit
Overview pension scheme defined Benefit
The defined benefit scheme
This pension scheme governs all employees of the employer(s) affiliated to the Pension Fund. The scheme has the following features:
From the date of commencement of employment with the employer.
Participation ends:
a. on reaching retirement date on which pension payments start;
b. the start of the temporary or early old-age pension as referred to in the extra pension, net pension, and temporary old-age pension regulations;
c. the end of the employee’s employment;
d. the death of the participant.
As an exception to point c, above, the participation is continued if and for as long as:
1. there is a right to work disability pension and/or premium-exempt continuation in the event of incapacity for work;
2. there is a right to a periodic payment under the employer’s general or special terms of employment.
• spouse;
• registered partner;
• cohabiting partner within a shared household as evidenced by a notarial deed, provided that there is no relationship between the parties by blood or kinship in the direct line.
The fixed annual salary including any pensionable structural increases, holiday pay, and 13th month bonus in the calendar year concerned, where relevant, up to a maximum of €128,810.
The part of the pensionable salary over which no pension is awarded. The franchise as of 1 January 2023 is €16,878 in respect of full-time work. This amount will be adjusted in line with the CPI. The Board is entitled to deviate from this provision on the basis of the opinion of the actuary.
The pensionable salary less the franchise for the relevant calendar year (maximum of €128,810 – €16,878 = €111.932).
For pension rights accrued from 1 January 2018: the date on which the planned retirement date for tax purposes is reached (age 68).
By continuing to work to the state retirement age this state retirement age is regarded in principle as the retirement date.
Former participants may not defer the start date of their pension unless they can show that they have employment elsewhere.
The period during which the employee is or was a participant under the pension scheme rules. The length of participation is calculated precisely in years, months, and days. In the case of part-time employment, a proportionate length of participation will be taken into account.
For the period during which the temporary old-age pension is paid out (under the TOP scheme), an employee may opt to purchase length of participation for the life-long old-age pension related to the payment percentage. If this option is exercised, the relevant party is liable to pay a single premium which will be deducted from the available capital under the TOP scheme.
The annual accrual is 1.50% (2023) of the pension basis in the relevant calendar year (by setting a maximum for the pension basis this sum as of 1 January 2023 is a maximum of €1,678.98 per year). These entitlements are subject to the conditional increase policy.
In the event of death of the participant, 70% of the attainable old-age pension (i.e. by counting the length of participation up to the state retirement age as if the participant had remained alive) based on an accrual percentage of 1.75%. These entitlements are subject to the conditional increase policy.
As of 1 January 2002, on a risk basis, 10% of the attainable old-age pension (i.e. by counting the length of participation up to the retirement date as if the participant had remained alive) based on an accrual percentage of 1.75% if the partner has not yet reached the age of 65. Payment is not made beyond the date on which the partner reaches the state retirement age.
Entitlements to a temporary partner pension accrued before 1 January 2002 remain unaffected.
These entitlements are subject to the conditional indexation policy.
Applies in respect of the death of a person in receipt of pension, or a participant entitled to a work disability pension and/or a TOP payment. This payment is equivalent to twice the final monthly old-age pension or work disability pension to have been paid.
The life-long partner pension accrued since 1 April 2010 and the partner pension resulting from the collective value transfer of extra old-age pension accrued between 1 January 2002 and 1 April 2010, may be exchanged on the retirement date for an extra life-long old-age pension, subject to providing a written statement confirming the agreement of any partner to this exchange. Any partner pension accrued prior to 1 January 2002 may not be exchanged for an extra life-long old-age pension.
The orphan’s pension is 16% of the attainable old-age pension (i.e. counting the length of participation up to the retirement date as if the participant had remained alive) based on an accrual percentage of 1.75% and is paid up to the end of the month in which the orphan reaches the age of 21. The payment percentage is doubled in respect of a full orphan. These entitlements are subject to the conditional indexation policy.
70% of current pensionable salary above the maximum daily wage. It commences 1 January 2013 at the moment that a right to a state benefit under the WIA (Work and Income [Capacity for Work] Act)/WAO (General Disability Insurance Act) arises. Before 1 January 2013 this is conditional upon the employment with the employer having been terminated or adjusted and at such moment, or immediately following such moment, a WIA/WAO benefit applies. In the case of partial work disability, the payment is calculated pro rata. The work disability pension is paid out to no later than the state retirement age.
The premium-exempt continuation of the pension accrual during the period in which the work disability pension is paid out, proportionate to the degree of work disability. There is also a premium-exempt continuation of the pension accrual if and for as long as a participant with a WIA/WAO state benefit receives no work disability pension from the Fund, due to the wage for social insurance purposes being less than the maximum daily wage. The premium-exempt continuation of the pension accrual does not extend beyond the state retirement age.
The entitlements of participants, as well as pension payments and premium-exempt pension entitlements of former participants, are conditionally – and in part – adjusted if the coverage ratio is 110% or more, in accordance with an indexation ladder drawn up for such purpose, and based on the CPI. The Board is entitled to deviate from the indexation ladder on the basis of the opinion of the actuary. The adjustment of rights by awarding the indexation is only possible provided that this does not result in a coverage ratio of less than 110%.
As of 1 July 2015, your pension fund will try each year to increase your pension in line with the CPI. As of 1 January 2023 your pension for this year will be increased by 9,93% relative to 2022. Your pension fund has increased your pension over the last three years. In those three years, inflation was 16,93% (2022), 3,28% (2021), 1,12% (2020), 1.73% (2019), 1.68% (2018). Your pension fund will pay future increases in your pension from the investment return. Past increases and expectations for future years do not give an automatic right to future increases.
As of 1 January 2023, the total pension premium is 20,34% of the pensionable salary, up to a maximum of €128,810. This will be calculated by the Board on the basis of a policy ladder related to the coverage ratio as per 31 December of the previous financial year. The Board is entitled to deviate from the policy ladder on the basis of the opinion of the actuary. The employer will recover part of the total premium from the participants (see employee’s contribution to the total pension premium). The premium is not payable beyond the retirement date.
The premium is payable if and for as long as the participation continues, but not beyond the state retirement age.
This is calculated by the employer as per the 1st of January 2023 at 10.73% of the pensionable salary above a premium exempt amount of €28,572.
See also under exchange of partner pension. The other available options are:
- voluntary additional continuation in the event of leave, demotion, and temporary old-age pension;
- part-time pension;
- graduated pension payments from high to low and low to high, within a fiscally-permitted range;
- postponement of pension up to a maximum age of 70, provided there continues to be an employment contract;
- advanced payment of pension;
- AOW (state old-age pension) bridging pension;
- extra pension via the extra pension, net pension, and temporary old-age pension schemes.
Rights accrued in proportion to time.
See pension scheme rules.
An individual value transfer is possible in line with statutory provisions and provided that the coverage ratio of both the transferor and transferee pension fund at the end of the relevant calendar month is at least 100% at the time the request is made (the calculation date). On receipt of the offer relating to the value transfer, the amount of the coverage ratio has no further influence and the value transfer will be carried out (after the agreement of the entitled party and any partner). A collective value transfer is subject to specific additional conditions.