Young employees often ask ING CDC Pensioenfonds whether they can make extra deposits into their pension plan. The answer is, “No, you can’t.” Nevertheless, there are other ways for you to save for your retirement. Below is a list of options. 

Say, you’re 28 and working hard to build a career at ING. You don’t have much time to think about your retirement. However, recent news about low interest rates and the implications for your pension have made you concerned about your income for later. In 2020, your pension accrual will be cut by 25%. What does that mean for your pension? Can you set aside additional savings to bridge the gap?

Calculation sample
Let's take a look at the calculations to illustrate what the accrual cut will mean in terms of euros on a monthly basis.

Say, the components of your salary that qualify for pension accrual in 2020 total € 3,000 per month. Your monthly franchise (the offset for Dutch state pension, which does not accrue pension) is € 1,181 per month. Your monthly pensionable salary net of the franchise, which is your pension base, is therefore € 1,819 (€ 3,000 - € 1,181) per month.

In 2020, your pension accrues at 1.328% of your pension base, which is € 24.15 per month in this example. Without the accrual cut, your pension would have accrued at 1.780% of your pension base, which would have been € 32.38 per month.

So, in this example, you accrue € 8.23 less pension per month. You cannot compensate this gap by making additional deposits into your ING CDC Pensioenfonds pension plan. However, there are other ways for you to save for your retirement.

Pension savings outside your pension plan
If you’re considering setting aside extra savings for your pension, you could do the following:

• Consult an external advisor to help you explore your options and set up a financial plan for your future.
• Utilise your annual tax-deductible margin to make investments in supplemental private pension plans. The amount is specified as 'factor A' on your Uniform Pension Overview (UPO). Go to the calculation tool provided by the Dutch tax authorities at www.belastingdienst.nl to find out what you could do to make additional deposits or investments. Click here for a sample UPO 2019 and a list of frequently asked questions including an explanation of ‘factor A’.
• Visit the Money Wise website for tips on private pension savings.
• Go to the Pension Planner to find out how much pension you could expect to receive if you stayed at ING until you retire. That will help you decide whether you’ll need additional savings and will give you insight into the pension choices you could make to bridge any gaps. Options include taking out an AOW gap pension or opting for variable pension benefits.