As a result of persistently low interest rates, the pension accrual rate will have to be lowered in 2021, just like it was in 2020. This means that next year your pension will not accrue at 1.784% but at 1.196%, which means a cutback of 33%. This reduction will only apply to 2021.

ING CDC Pensioenfonds aims to have pensions accrue at the maximum rate allowable under Dutch tax law. Based on the situation as at 30 September 2020, the fund has assessed whether the 31.5% contribution agreed by the social partners will be sufficient to fund the accrual rate targeted for 2021.

Accrual rate to be cut back by 33%
The assessment revealed that the contribution will not be sufficient to fund the maximum accrual allowable in 2021. As a result, the accrual rate of pensions will be reduced by 33% in 2021. The accrual rate targeted for 2021 was 1.784% of your pension base, but it will be reduced to 1.196%. The pension fund will send you information regarding your personal situation in the fourth quarter of 2020. Click here for calculation samples customised to your situation.

Important note: the media are reporting that there is an ‘exemption’ for cutbacks on pension benefits if the funding ratio is higher than 90%. That is not the same issue as the reduction of pension accrual that ING CDC Pensioenfonds will apply in 2021, just like it did in 2020.

Pension accrual after 2021
Based on the situation as at 30 September, ING CDC Pensioenfonds annually reassesses whether the fixed contribution will be sufficient to fund the maximum pension accrual allowable under tax law. The fund will inform you of the outcome. Please be aware that after 2021 the accrual rate could be cut back again if interest rates remain low.

Additional deposits
The ING CDC Pensioenfonds pension plan does not allow you to make additional deposits to supplement the gap in pension accrual in 2021. You will have to make use of other options, such as consulting an external adviser to set up a financial plan for your future. For more information on additional deposits, click here.