How does your pension retains its value?

The pension entitlements and pension rights are subject to a statement of contingency, which says that the Fund tries to adjust your pension to the increased cost of living as of 1st January of any year, provided that there are sufficient financial means available to do so.

The degree of indexation depends on the Pension Fund's financial position. If this is sufficient, full indexation will in principal be granted.

If the financial position is insufficient, the Pension Fund can grant no or only partial indexation. The reduction of indexation is equal for both pension entitlements (participants and deferred participants) as well as pension rights (retirees). If in the future the Pension Fund's financial position is sufficient, the reduced indexation can be granted with retrospective effect (post indexation). The maximum percentage of post indexation is equal to the sum of the increases in accordance with the general remuneration changes of the government employees that have not been granted in the past.

Each year the Board of the Pension Fund determines if and to what extent the financial position of the Pension Fund is sufficient enough to finance the indexation mentioned in the previous paragraph sections. Subsequently, the Board decides if and to what extent the indexation mentioned earlier can be granted entirely or partially. The indexation is funded from surplus returns. There is no right to indexation. No appropriated financial reserve is held to pay for future indexation. And no loading on the premium is used for indexation.

A decision to grant indexation in any year is not a guarantee that any indexation will be granted in future years. Continued indexation over a number of years does not limit the discretionary power of the Board.

At least once every three years the Board performs a continuity analysis which offers insight into the projected level of the conditional indexation.