ING CDC Pensioenfonds updated its recovery plan in early 2018. Based on its calculations, the pension fund expects to restore its funding ratio within ten years without having to take additional measures. This article explains how the pension fund expects to realise its recovery and how that will affect you.

ING CDC Pensioenfonds had a reserve deficit at year-end 2017, just like it did at year-end 2016. This means the pension fund's policy funding ratio was below the funding ratio required by law, which is around 120%. At year-end 2016 the deficit was 17% and at year-end 2017 it was 6%. Every year that the pension fund has a reserve deficit, it must update its recovery plan. What is a recovery plan and what does the update entail? We are happy to explain.

What is a recovery plan?
A pension fund with a reserve deficit is required by law to submit a recovery plan to the Dutch central bank (DNB). The recovery plan must explain how the pension fund expects to restore its policy funding ratio to exceed the level required by law within a period of ten years. Based on factors including pricing, excess return on investment and indexation, the pension fund determines whether it will be able to recover within the required ten-year period if it pursues its current policy, or whether the fund will need to take additional measures.

Annual update of the recovery plan
As part of the update procedure, the pension fund determines whether its current policy is still expected to ensure sufficient recovery. If progress is too slow, additional measures may be needed after all.

Based on calculations made by the pension fund in early 2018 using the model prescribed by DNB, the pension fund still expects to reach the required policy funding ratio within the ten-year period. The funding ratio will most likely be restored through the pension fund's contributions and return on investments. This means no additional measures will be needed.

More information
You can check your pension fund's financial situation regularly. We post updates on the website, send digital newsletters and publish quarterly reports. Read the current recovery plan and a list of frequently asked Q&A regarding the recovery plan. If you cannot find the answer you are looking for, please contact the Pension Desk.