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.

How did it work under the old rules?

Did your pension keep pace with inflation?

PME tried to ensure that pensions increased in line with prices each year. Whether that was possible depended on the pension fund’s financial situation. The policy coverage ratio served as the benchmark for this.

What was the coverage ratio/policy coverage ratio?

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

Pension increase

Every year, the pension board looked at our financial position, and decided if pensions could 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 anticipated the new pension rules for pension funds transitioning to those new rules. This allowed us to increase pensions in mid-2022 and early 2023 by a total of almost 7.5 percent. And on 1 January 2024 by another 3.26 percent. For the increase on 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 were making use of the relaxed rules again. On January 2026, everybody who had a pension with PME received an increase of 2.82 percent.

Pension decrease

If our policy coverage ratio was too low legally speaking, there was a deficit. Under certain circumstances, pensions then had to be decreased. In the five years before the transition, we did not lower the pensions.

Here’s how increases and decreases work after the transition to the new rules

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.

Your pension can also decrease under the new rules. There are various measures to protect your pension. 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 in the 5 years before the transition. 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.