The financial
position of SPF
The financial
position of SPF
Besides the funding level, a pension fund must calculate the “policy funding level,” being the average of the last twelve months of monthly funding levels. The policy funding level can be used to determine whether a pension fund needs to curtail accrued pensions and pensions that have commenced payment.
The policy funding level can also be used to determine whether a pension fund is in a deficit situation, in which case the pension fund would be required to submit a recovery plan to the Dutch central bank, DNB (De Nederlandsche Bank). The recovery plan outlines how a pension fund aims to achieve a higher funding level in the coming years. The policy funding level plays a decisive role in the fund’s decision on whether to index.
Members were awarded indexation of 4.53% as of 1 January 2023, while deferred members and pensioners were awarded indexation of 10.73%. The reason for this was that, in contrast to inflation, wage growth at the employer was limited in 2022. This was reversed in 2023, when inflation was low and wage growth was high.
The Board therefore decided to assess indexation over two years. Members, deferred members and pensioners were awarded 100% of the benchmark over that period, resulting in an increase of 8% for members as of 1 January 2024 and an increase of 3.49% for deferred members and pensioners.
SPF tries to increase pensioners’ and deferred members’ pensions annually in order to bring these in line with price increases. We also aim to increase active members’ pensions to bring these in line with wage increases. This is SPF’s ambition and is called indexation. However, we can only index if our financial situation is strong enough.
More information about indexation is available on SPF’s website.