This year we are once again increasing the pensions of (former) DB members and pensioners. And that’s good news after a year of ever-increasing prices. In supplementary scheme 1, your pension will be increased by 10.9%. In schedule 2 the increase is 17.16% and in schedule 3 the increase is 9.91%. These increases take effect immediately. If you are already receiving a pension, you will see this reflected in your January benefit.
Employers and works councils make agreements with each other about pension plans, including supplements. SPIN implements these agreements. There are three different surcharge arrangements. In principle, Surcharge Scheme 1 applies to your DB pension. For some of you, other agreements made in the past apply. In that case, Surcharge Scheme 2 or 3 may apply. You cannot switch to a different benefit plan. Due to substantially higher prices and the difference in the method of calculation, the differences between the schemes are larger than usual this year.
Below we explain this to you by scheme.
The supplement to your DB pension is 75% of the increase in the consumer price index including effects of VAT, excise taxes and subsidies from September 2021 to September 2022. This price index increased by 14.53%. Your pension will then be increased by 10.9%.
Surcharge Scheme 2 applies if you are covered by the ruling in Grey Blue Circle’s past lawsuit against SPIN. The supplement to your DB pension will then be 100% of the increase in the derived consumer price index excluding effects of VAT, excise taxes and subsidies from September 2021 to September 2022. This price index increased by 17.16%. Your pension is then increased by 17.16%.
Surcharge Schedule 3 applies if you left IBM employment between January 1, 1982 and December 31, 1995 and did not transfer your IBM pension to SPIN, but left it with AMEV. The supplement is then, as in supplement plan 2, based on 100% of the increase in the derived consumer price index excluding effects of VAT, excise taxes and subsidies from September 2021 to September 2022. The difference with Surcharge Schedule 2 is that in Surcharge Schedule 3 it is agreed that the surcharge will not exceed an average of 1.75% per year. We also look at the past and take into account all the years in which the supplement was lower than 1.75%. As a result, your surcharge this year is still higher than 1.75% and ultimately amounts to 9.91%.
Surcharge is not a given
Our financial position is currently good and within our means we are doing everything possible to keep it that way. However, an increase cannot be taken for granted. Whether an increase can actually take place depends, among other things, on legislation, general developments and SPIN’s financial position. SPIN’s financial position is expressed in the funding ratio. This depends in part on developments in the financial markets. It may therefore be the case that in the future we may not be able to compensate for any price increases, or only partially.
You can find the current status of our funding ratio at spin.co.uk/defunding-degree.