Rabobank Pensioenfonds has increased pensions by 6.18% as of 1 July. The fund, which had a funding ratio of 117% at the end of last year, only indexes partially, as inflation hit 10.9% during the fund’s reference period (April 2021-22).
The pension funds that communicated indexation decisions earlier, which include ABP, PFZW, and PME, indexed pensions based on last year’s much lower inflation. These funds will decide by the end of the year by how much they can index pensions in 2023.
Rabobank could have increased indexation, since the threshold to index pensions was lowered from 100% to 105% as of 1 July, but it did not do so.
“To make use of the new rules we would have needed a declaration from social partners saying they intend to make the transition to the new pension system. But they did not yet want to commit to this,” said Martin Mos, executive board member at Rabobank Pensioenfonds.
The fund will switch to a defined contribution (DC) arrangement for new accruals by the end of this year. A possible transition of defined benefit (DB) rights to DC is not on the cards for the next few years, according to Mos.
Rabobank is not the first pension fund to provide indexation of 5% or more this year.
ABN Amro indexed pension by 6.4% in April, while Philips increased pensions even by 7.4%, the inflation figure in January. Shell indexed pensions by 5%, the inflation figure in November 2021. These three funds had (much) higher funding ratios than Rabobank, allowing them to compensate fully for inflation.