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Published on 27 July 2022

Your pension is being increased by 0.84%

On 20 July 2022, the Bpf Koopvaardij board decided to grant an extra supplement to your pension. As of 1 January 2023, Bpf Koopvaardij will increase your pension by 0.84%.

Why is Bpf Koopvaardij increasing your pension?
As of 1 January 2022, Bpf Koopvaardij increased your pension by 0.44%. However, the government has recently relaxed the rules for granting supplements. Pension funds may temporarily calculate using a lower limit when granting supplements. This means that an additional supplement is possible. Bpf Koopvaardij is now using this statutory possibility.

How was the percentage of 0.84% calculated?
When deciding on the extra supplements, Bpf Koopvaardij considered two issues:

1. Which period is leading for the granting of supplements?
Bpf Koopvaardij aims to have your pension increase partly in line with the cost of living in a certain period. The period in question is laid down in the pension regulations. For the granting of supplements as of 1 January 2022, Bpf Koopvaardij examined the increase in the cost of living in the period from 1 July 2020 up to and including 30 June 2021. The increase was 1.29%.

2. How much supplement has already been granted?
In January 2022, Bpf Koopvaardij increased your pension by 0.44%. The additional supplementation as of 1 January 2023 of 0.84% compensates the full price increase of 1.29%. This may seem a strange addition. However, the percentage is slightly lower, because Bpf Koopvaardij now calculates this supplement on the previously granted supplement of 0.44%. In total, the result is the same. You have therefore received this 1.29% in two steps.

In late 2022, Bpf Koopvaardij will decide on granting supplements in 2023
Prices have risen sharply in recent months. In November 2022, Bpf Koopvaardij will decide whether this will lead to a new supplementation as of 1 January 2023. For this purpose, Bpf Koopvaardij will consider:

  • the increase in the cost of living from 1 July 2021 up to and including 30 June 2022;
  • financial situation of Bpf Koopvaardij; and
  • the applicable statutory regulations at that time.

When will you notice the effects of this supplementation on your pension?
Bpf Koopvaardij will process the supplementation of 0.84% as of 1 January 2023 in your build-up pension or in your pension benefits. If the board decides in November 2022 to grant a supplement related to the increase in the cost of living between 1 July 2021 and 30 June 2022, this supplement will also lead to an increase in your built-up pension or in your pension benefits as of 1 January 2023. The supplements will then be added together.

You will receive a letter after Bpf Koopvaardij has taken a decision in November 2022 about the possible granting of supplements as of 1 January 2023. This letter will provide a further explanation about the extra supplementation and the possible new supplementation as of 1 January 2023.

Further explanation

The fact that we were allowed to increase pensions is obviously good news, but we remain critical. Is it fair, to both young and old? Aren't we harming any people? We show how we examined that issue.

For years now, pensions have not increased or only partially increased. Everyone who receives a pension felt it in their pockets. With pensions increasing, they will notice it immediately. Their purchasing power improves a little. For those not yet receiving a pension, we make regular calculations. That calculation is also on the pension overview.

We have now made that calculation. We calculate three amounts: the expected pension (neutral weather), the pension below expectations (bad weather) and the pension above expectations (good weather). We have calculated the pensions with and without supplement, for all age groups.

Your pension in neutral weather
First, we looked at the expected pension. This is the amount in the ‘neutral’ scenario.

How should you read the graph below?

  • On the left side of the graph (the vertical axis) are percentages. These indicate to what extent your pension is protected in this scenario against loss of purchasing power. By this we mean the situation in which your income rises less than prices. If this is 100%, you have no loss of purchasing power.
  • At the bottom of the graph (the horizontal axis) are the ages.
  • The dark blue line shows the expected pension without the supplement.
  • The light blue line shows the pension with the supplement.

This graph shows that:

  • a supplement or no supplement does not make much difference to young people; and
  • seniors/pensioners benefit from the supplement.

Your pension in bad weather
By a ‘bad weather scenario’, we mean the situation when things are very unfavourable for a long time. Examples include poor investment performance. The pension someone is expected to receive in this situation is considerably lower among young people than the pension in the average scenario. Young people face many years of ‘bad weather’ in this scenario. Those who are older have already built up a large part of their pension. Bad weather in the future has less impact on this pension.

What do we see in this graph?

  • It does not make much difference to young people in bad weather whether or not the fund increases pensions in 2022. Unfortunately, an increase now will not outweigh the effect of many years of bad weather.
  • Among pensioners it does matter. After all, their pension is already fully built up.

The ‘good weather scenario’ is less important in deciding whether or not to increase pensions. After all, when the weather is nice, everyone benefits.

New pension scheme
The new rules for pensions (Dutch Future Pensions Act – Wtp) also mean a new pension scheme for Bpf Koopvaardij. It will be several years before the new scheme starts. But we already take into account that there may be differences. The pension people can expect in the current scheme may be different from the pension people are expected to get in the new scheme.

The board has considered the implications of a supplement being granted now. Does this affect possible choices or actions you take later? Every euro we spend now by increasing pensions cannot be used later to compensate certain groups if needed, nor to establish a reserve to absorb large fluctuations in the expected pension.

The board therefore considered the question of whether or not to increase from all sides. Supplements now – given the financial health of the fund – do not seem to preclude any measures in the future. The Bpf Koopvaardij board considers it justified to decide that pensions can be increased by an additional 0.84% from 1 January 2023.