ABP pension fund increases pensions
Retirees will receive a higher pension from 1 July this year. Pensioenfonds ABP will increase pensions by 2,39 percent. This percentage corresponds to the average price increase in the twelve months to September 2021.
The ABP, the pension fund for people who work in the government and education, announced this today. Indexation at the largest pension fund in the Netherlands had been in the air for some time and the fund previously reported that the financial position was in principle strong enough to increase pensions from 1 July.
Now that is certain and retirees will feel it directly in their wallets by the end of next week. The ABP also makes an additional supplementary payment of 1,2 percent to pensioners over the first six months of this year. They will be paid this supplementary payment to compensate for the missed months because indexation has not already taken place from 1 January 2022.
A relaxation of the rules by the government on 1 July will allow pension funds to index more and more quickly. Before the change, the policy funding ratio, the average funding ratio of the past 12 months, of pension funds had to be 110 percent. This means that the pension fund had to have 1,10 euros in cash for every euro they pay out. The ABP may already increase at a policy funding ratio of 105 percent.
Roelf van der Ploeg, pension advisor at the AOb, says the unions have long argued for a relaxation of the rules. “The rules were very strict, calculations were made with conservative figures and that is not smart. Indexing was almost never possible.”