With every decision, our board considers the consequences in the short and long term. And how this will affect our participants: those who receive pension from us, accrue pension with us or still have a pension with us. They all receive an additional 5.2%. That is generally good news. It is particularly beneficial for the participants who already receive a pension. For younger participants who are still accruing pension, it would have been slightly more favourable in the future to have a lower increase this year. The board has carefully weighed all interests in its decisions. The board believes sufficient reserves must be maintained, enabling the pension fund to make a healthy and responsible transition to the new rules for pensions with effect from 1 January 2027. In addition, the board wants to minimise the risk of having to reduce pensions in the next few years.
Financial position
The increase does have consequences for our financial situation. As a result of the increase, our funding ratio decreases. The funding ratio is the ratio between our assets and the pensions we have to pay out. The lower funding ratio reduces the financial scope for increasing pensions in the future. After all, you can only spend the money once. The consequences of the increase decision for each age group are independent of other developments that affect the coverage ratio. It rose in 2023. This is mainly due to the rise in interest rates.
The graph below shows the effect of the increase of the pensions on the expected pension by age group. The effect has been calculated with effect from 1 January 2027. This is the date on which Pensioenfonds PGB will transfer to the new pension system. Pension accrual after this date is not included in the percentages below. If this pension accrual is included, the percentages will be lower.