How secure is your pension?

Development financial situation

Our financial situation affects the amount of your pension. Our financial situation depends on the following factors:

• Life expectancy: the older people get, the longer we will have to pay pension. That means we will need more money.
• Low interest rates make pensions more expensive. If interest rates are low, we need more money to be able to pay the same pension.
• The results of our investments may be disappointing or better than expected.

What is the coverage ratio/policy coverage ratio?

The coverage ratio shows the relation between PME’s capital and the amount PME needs to pay all pensions now and in the future. The policy coverage ratio is the average of the coverage ratios of the last twelve months. The higher the coverage ratio, the better we are doing financially.

Pension increase

Every year, the pension board looks at our financial position, and decides if pensions can be increased. For a long time, our financial position was not good enough. However, the government temporarily relaxed the rules. With this relaxation, the government anticipates the new pension rules. This allowed us to increase pensions in mid-2022 and early 2023 by a total of almost 7.5 percent. And as of 1 January 2024 by another 3.26 percent. For the increase as of 1 January 2025, we did not make use of the relaxed rules. At that time, we were able to increase pensions by a maximum of 0.3 percent. In 2026, we are making use of the relaxed rules again. As of 1 January 2026, everybody who has a pension with PME received an increase of 2.82 percent.   

When we switch to the new rules, the fund’s capital will be distributed. If we are in a good financial position at that time, pensions will be increased. The better our financial situation, the higher the increase. After the switch, pensions can increase or decrease once a year, just as they can now. Increasing pensions will become easier. One reason for this is that we will no longer be required to maintain large buffers. This means that you will benefit from positive results sooner.

Pension decrease

If our policy coverage ratio is too low legally speaking, there is a deficit. Pensions may need to be decreased. In the last five years, we did not lower the pensions. We are doing everything we can to ensure that pensions do not have to be lowered. However, a future decrease cannot be ruled out.

Your pension can also decrease under the new rules. There will be various measures to protect your pension as much as possible. This is expected to limit the risk of decreases, but it cannot rule them out completely. In exceptional situations, such a decrease may be substantial.

The past 5 years

Below is a list of the changes in pensions during the past 5 years. The third column shows the price increase in percentages.

* Price increases from the month of July of a year compared to the month of July of the previous year.  This is based on information from Statistics Netherlands.