The board determines how much indexation is justified each year. The maximum indexation possible under the Mars Pension Fund pension scheme was granted at the beginning of this year. You can read more about that in this article. In response to the exceptionally high inflation, the fund's board has discussed with the employer whether additional indexation is justified this year. However, much is happening in the world around us, such as the unsettled financial markets and the changes resulting from the Future Pensions Act. For that reason, it was decided this year not to grant additional indexation on top of the maximum indexation at the beginning of the year. That was communicated in July in this news article. The article below explains why that choice was made. 

Why does the Future Pensions Act affect the decision on indexation? 

Because of the Future Pensions Act, the pensions in the Netherlands will be changing. Mars Pension Fund members will get a new pension scheme no later than 1 January 2028. The fund's board and the employer want all members to get off to the best possible start within the new pension scheme. To make that good start possible for all members, decisions about indexation are made in light of the oncoming changes.

These special circumstances call for a trade-off between granting indexation and protecting the financial buffer. Our goal remains to responsibly maintain growth in the pensions of all members as much as possible in line with the price increase. For the sake of fairness, we strive to minimize the differences between members as much as possible. We also strive to maintain a healthy financial situation and an adequate funding ratio. A funding ratio of 100% means there is precisely enough money to pay all pensions. That means a funding ratio above 100% provides a financial buffer. That is important because the future is uncertain, and it allows us to pay out pensions to everyone, even in the event of financial setbacks. In the light of the transition to the new pension scheme, protecting the financial buffer is extra important.

Why is protecting the financial buffer extra important in the run-up to the new pension scheme? 

Mars Pension Fund is currently in good shape. The funding ratio is high, which means we have an adequate financial buffer. That is a good starting point for the transition to the new pension scheme. Members in the new pension scheme will have their own pension capital from which pensions will be paid. As a result, members' pensions will move more with the economy. At the time of transition, each member will be given a portion of the fund's actual financial buffer for their personal pension capital. As a result, members will receive higher pension capital during the transition. That extra capital can absorb any future setbacks. This is why maintaining a good financial buffer is so important.

Why is additional indexation not possible now, despite the high funding ratio? 

Any pension increase must be paid from the pension fund's financial buffer. Our current funding ratio is 146.2%, and we are doing well. However, much is happening in the world around us. Interest rates have risen, inflation is high, and equity markets are unsettled. Because of the indexation we granted earlier and developments in financial markets, the fund capital shrank by 300 million in 2022 from 1.9 billion to 1.6 billion euros. If inflation remains high and we always allow pensions to keep full pace with it, our buffer might not be sufficient for a proper transition to the new pension system. We want to make responsible decisions and consider the interests of all members.

What does this mean for future indexations?

We will continue to seek a good balance between providing indexation and protecting the financial buffer in the coming years. We consider all relevant circumstances, such as the funding ratio, inflation, developments in financial markets and the transition to a new pension scheme. 
The employer establishes the pension scheme and the fund administers it. Therefore, a decision on additional indexation beyond the maximum possible under the pension regulations, is always made in consultation with the employer. We are continuing talks on that subject. The Future Pensions Act and balancing the interests of all members will play an important role in those talks.