The coronavirus crisis is affecting daily life for all of us. You might be concerned about the impact the crisis is having on your pension. ING CDC Pensioenfonds understands your concerns. That's why in this article the pension fund explains where we stand at present and what you can expect for the second half of 2020. As always, we’re frank about the situation.

The coronavirus crisis has certainly not left ING CDC Pensioenfonds unaffected – its funding ratio has been trending downwards in the past few months. Click here to see the graph.

Future indexation
The policy funding ratio determines how much indexation a pension fund is allowed to grant by law. If the policy funding ratio declines, the fund needs to lower its indexation rate or cancel indexation altogether. This why in recent years ING CDC Pensioenfonds has only been able to grant part of the targeted indexation, or none at all.

Based on the fund's policy funding ratio as at 30 September 2020, the board decides whether any indexation will be granted. The fund is only allowed to grant indexation if the policy funding ratio is higher than 110%.

As at 30 June, the fund’s policy funding ratio is 100%. However, its current funding ratio is 95%. Given the declining funding ratio, it is quite unlikely that indexation will be possible next year.

Future pension accrual
ING CDC Pensioenfonds aims to realise pension accrual at the maximum rate allowable under Dutch tax law. To fund this, a fixed contribution is paid to the pension fund - for the years 2019, 2020 and 2021, the contribution has been fixed at 31.5%, while for 2022 and 2023 it will be 30.5%. This has been agreed by the social partners.

If interest rates continue to be as low as they are now, the pension fund will need to cut back the pension accrual rate for 2021, just like it did in 2020. This is because when interest rates are this low, the cost of your pension accrual is so high that the 31.5% pension contribution would be insufficient to fund the accrual for 2021. The actual decision on a cutback will be based on interest rates at 30 September 2020. We’ll keep you informed on this.

Suspension of individual value transfers
Given that the policy funding ratio has dropped below 100%, it is temporarily impossible to transfer the value of your pension in ING CDC Pensioenfonds to another pension administrator. And if you recently joined ING, you cannot transfer the value of your pension in another pension fund to ING CDC Pensioenfonds for the time being. You will be informed about this, and you will also be notified when value transfer is possible again.

Important note: despite the suspension of actual transfers you may still submit a request for value transfer. Click here for the relevant form.

More information
If you want to stay up to date on how the financial situation of ING CDC Pensioenfonds develops and what this means for your pension, check the website for news and quarterly updates on the funding ratio, investment results and developments in the financial markets.