ING CDC Pensioenfonds tries to increase the pensions of ING’s current and former employees and pensioners on an annual basis, in order to stay in line with the consumer price index. The pension fund takes its policy funding ratio on 30 September as the reference point.

We were expecting this and informed you about it in our Summer Special. Unfortunately, the coronavirus crisis has had a dramatic effect on funding ratios, and as a result indexation will not be possible for 2020.

Policy funding ratio as a reference
By law, indexation is only allowed if a pension fund’s policy funding ratio is higher than 110%. ING CDC Pensioenfonds takes its policy funding ratio on 30 September as a reference point. The policy funding ratio is equivalent to the average funding ratio for the preceding 12 months. By taking the average ratio as a reference, the pension fund ensures that the important decision of indexation does not hinge on its funding ratio at one point in time.

Given that the policy funding ratio on 30 September 2020 was 98%, indexation for the year 2020 is not permitted by law.

Omitted indexation will be recorded
The omitted indexation will be recorded in the pension fund's accounts. If at some point in the future the fund’s policy funding ratio rises to an adequate level, the pension fund will consider granting the omitted indexation. However, this is currently not the case.

Further information
Would you like to have more details on indexation by ING CDC Pensioenfonds? Click here for background information.

Follow the latest developments on the pension fund's financial position on our website and through our quarterly reports. In early 2021, you will receive a letter explaining the decision to cancel indexation for 2020.