How exactly does this work?
On 1 January 2027, SSPF will switch to the new scheme. A fixed benefit with indexation, as currently offered by SSPF, can no longer be offered then. Under the new scheme, the benefit will continue as a variable pension. The amount of the benefit you currently receive will be the starting point for the variable benefit under the new scheme. If, upon retirement, you had opted for the high/low pension and this switches to low this year, then this will be the starting point for your variable benefit.
In spring 2027 you will choose the option that suits you best. A variable pension from SSPF or a fixed benefit via an external insurance company. If you opt for a fixed pension, you will transfer your pension capital to an insurance company of your choice. If you opt for a variable pension, you will remain with SSPF.
What does a variable pension mean?
If you choose a variable (fluctuating) pension, you will continue to receive your pension from SSPF as usual. You will receive benefits from the Collective Variable Pension (CVP). This is a shared pension fund in which retirees share risks collectively. The pension remains invested with the aim of increasing the benefit over time. SSPF determines the investment strategy based on the preferences of the overall group of retirees. You do not need to choose a risk profile yourself.
How does that work?
- The amount of the benefit you currently receive will be the starting point for the variable benefit in the new scheme.
- During the transition to the new scheme, SSPF’s current buffer will be distributed. As a result, your pension will increase from July 2027. Read more about distribution of the buffer (SSPF).
- Within the CVP, certain risks are shared collectively. This shared pension fund cannot be ‘depleted’.
- This shared pension fund is invested by SSPF with the aim of increasing the benefits over time.
- Benefits are adjusted annually based on investment results. This is expected to result in a positive adjustment in many cases. However, the adjustment may also be negative if investments perform poorly. For this reason, results are spread over time to minimise fluctuations in the benefit.
- In addition, there is a risk-sharing reserve. This reserve is intended to prevent pensions from having to be reduced unexpectedly during the first 15 years after the transition to the new pension scheme.
- There is a strong likelihood that this reserve will still exist after 15 years. As long as this reserve is in place, your pension will not be reduced. The benefit will increase when results are positive.
- If you pass away, your partner (if applicable) will automatically receive a variable partner’s pension, unless you made different choices yourself.
What does a fixed pension mean?
You can also choose to convert your pension into a fixed benefit with an insurance company of your choice. In that case, you will have certainty about the amount you will receive.
How does that work?
- With a fixed pension, your pension will be transferred in July 2027 to an insurer of your choice. You will leave SSPF and become a member of the insurer of your choice.
- Before you transfer to the insurer, you will receive your increase from the buffer. This amount will be added to your pension capital.
- With this pension capital, you will purchase a fixed pension benefit from the insurer you have chosen. You will have certainty about the amount you will receive for the rest of your life.
- A fixed pension usually does not increase in line with rising prices (inflation). In times of inflation, your purchasing power will decrease with a fixed pension. Unless you have agreed otherwise with your insurer.
- From the end of July 2027 onwards, you will receive your pension from this insurer.
What happens to the choices you made upon retirement?
You may not change the choices you made previously
It does not matter whether you opt for a variable pension with SSPF or a fixed pension with an insurance company. The choices you made when you retired remain valid. This has been determined by the Tax and Customs Administration and is therefore a tax requirement.
For example:
- Had you chosen to receive a higher pension initially and a lower one later? This will remain unchanged.
- Had you arranged a pension for your partner? This will continue to apply.
As a result, the insurance company may not be able to offer you a pension. In that case, switching to that insurance company is not possible.
An example:
Hans retired on 1 January 2020 and chose a higher pension for the first 10 years and a lower pension thereafter (high-low pension). By 2027, he will have received this higher pension for 7 years. If he wishes to switch to a fixed pension with an insurance company, that insurance company will first have to pay out a higher pension for a further 3 years and then a lower pension. This is because Hans’s choice still applies. If the insurance company cannot offer this term, a switch is unfortunately not possible.
What suits you best?
We have set out some reasons why you might choose a variable or a fixed pension.
Mogelijke redenen om voor een variabel of vast pensioen te kiezen:
| Variable pension | Fixed pension | |
|---|---|---|
| Pension provider | You continue to receive your pension from SSPF. | You transfer your pension capital to an insurer of your choice. |
| Lifelong pension | You receive a lifelong pension from SSPF. | You receive a lifelong pension from the insurer. |
| Distribution of the buffer | In July 2027, the buffer will be distributed and your pension will increase. | In July 2027, the buffer will be distributed and your pension will increase. Your pension capital will then be transferred to the external insurer. |
| Amount of your monthly pension | Your pension payments may increase or decrease each year. This depends, among other things, on investment results. | You receive the same pension payment every month. |
| Development of your pension | Your pension follows investment results. These are spread over time so that your pension fluctuates as little as possible. Read more about the risk-sharing reserve. | Your pension does not change and usually does not increase in line with inflation. Unless otherwise agreed with the insurer. |
| Choices made at retirement | The choices you made at retirement remain in place. | The choices you made at retirement remain in place. Choose an insurer who can offer this. |
| Partner’s pension | The choice you made for your partner’s pension at retirement remains in place. | The choice you made for your partner’s pension at retirement remains in place. Choose an insurer who can offer this. |
| Payment of your pension | You continue to receive your pension payments from SSPF. | From July 2027, you will receive your pension payments from the insurer you choose. |