No compensation for inflation at ABP

No compensation for inflation at ABP

Participants of the ABP civil servants’ fund will not receive a higher supplementary pension next year to compensate for price increases, despite the rising inflation of currently more than 5 percent. The Civil Service Fund previously warned that indexation was unlikely.

The premium will remain the same, according to the premium and indexation decision for 2022. Last summer, the civil servants’ fund also warned that it would increase.

Whether or not to raise a pension to compensate for inflation is a fraught subject every year, although in recent years it has been more about (the prevention of) discounts. This year, missing indexation is extra painful because inflation has risen so fast.

Since the last time that the pensions of the largest funds were indexed, the purchasing power of supplementary pensions has already been more than 20 percent. On top of that, current inflation is added.

Unfortunately, the fund’s financial position does not allow indexing, ABP writes in a press release.

105 instead of 110

According to the rules, funds must have an average funding ratio of 105 percent in the past year in order to partially index. Until recently, this was 110 percent, but a majority in the House of Representatives supported a PvdA proposal to lower this.

But this lower bar is still too high. At the end of October, ABP had a so-called ‘current’ funding ratio of slightly more than 105 percent, but because the average of the past year is looked at, the fund is still too low. Care and Welfare and the metal funds PME and PMT also come out too low.

No compensation for inflation at ABP
Source link No compensation for inflation at ABP

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