We aim to increase the pensions of the final pay plan every year. This is called indexation. In December 2023 we announced that the indexation decision was pending. Right now, we can announce that the pensions pensioners and deferred members the final pay plan will be increased by 0.16% as per January, 1, 2024.
How is the level of indexation determined?
Increasing pensions is only possible if the financial position of the fund is good enough. Full indexation according to our policy means that pensions can increase by 75% along with the price increase, up to a maximum of 3%.
Calculation
The level of the policy funding ratio reflects our financial position and determines whether we are allowed to increase our pensions. The policy funding ratio as of the end of September last year (2023) was 148.4%, which meant our financial position was good enough for full indexation.
The price increase (consumer price index, or CPI, determined by the Central Bureau of Statistics, as per the end of September 2023) determines how much we are allowed to increase pensions.
Over the past year, the Central Bureau of Statistics has changed the way it calculates the consumer price index. If we do not take this change into account, the price increase last year was 0.21%. And 75% of 0.21% is only a 0.16% increase.
TThe indexation will be processed with the June 2024* pension benefit (payment date Monday, June 3, 2024). The pension benefit will be increased retroactively to January 1, 2024, meaning that the increase from January through May of this year will also be paid in the June pension benefit.
Can it be done differently?
The Mars Pension fund board realizes that this indexation is very limited. The pension fund is in good shape. And the prices of many goods did rise. So a larger increase in pensions seems logical. But with our current pension plan, we are currently not allowed to increase more than 0.16%.
However, we are considering other choices to make for the calculation of indexation. The condition for this is that the pension plan is adjusted. We cannot decide about that ourselves, but the employer, Mars, can.
We are in dialogue with Mars, but unfortunately due to the upcoming changes around the Future Pensions Act, nothing can be decided just now. The issue is not off the table. If this conversation leads to an adjustment of the scheme and the indexation, a news item on the website will follow.
*In an earlier version of this article, we reported that the indexation would be paid in the May 2024 pension benefit. This turned out not to be administratively feasible as the indexations have to be calculated retroactively to January 1 of this year. This must be done very carefully so that every pensioner gets what they are entitled to, which requires additional checks. By delaying the benefit for 1 month, our pension administrator can carry out a careful check.
More information
Do you have a question about the indexation or your pension? Please send an email to pensioenservice@marspensioen.nl or call +31 88 015 79 20.