The SPIN board has decided to slightly increase a portion of DB pensions effective Jan. 1, 2024. Another part will not be increased. In supplementary scheme 1, your pension will be increased by 0.16%. For allowance schemes 2 and 3, there is no increase in the pension this year. We understand that this will be a disappointing message. That’s why we explain the reason.
To increase pensions on January 1, 2024, we look at price changes from October 2022 through September 2023. We do this using the consumer price index of the CBS (the CPI). This ranges between +0.21% and -1.39%, depending, for example, on whether tax effects are included in the index. Since October 2022, energy prices have fallen. At the same time, we know that costs for food and drink, for example, are higher than a year ago. CBS looks at average price changes. Therefore, this average may not match what you experience yourself at the checkout. We understand if this disappoints you.
Below we explain to you how we calculate the supplement for each scheme. Would you like to know more? Then take a look at our frequently asked questions.
Details of payment arrangements
There are three different surcharge schemes. For most, Surcharge Scheme 1 applies to the DB pension. For some, other arrangements have been made in the past. In that case, Surcharge Scheme 2 or 3 may apply to you. It is not possible to change benefit plans.
The supplement to your DB pension is 75% of the increase in the consumer price index including effects of VAT, excise taxes and subsidies such as the price cap on energy costs from October 2022 through September 2023. This price index increased by 0.21%. Your pension will be increased by 0.16%.
Surcharge Scheme 2 applies to pensions accrued during the period January 1, 1982 to December 31, 1995 and transferred to the Fund as a non-contributory or vested pension as of January 1, 1996. The supplement to your DB pension is then 100% of the increase in the derived consumer price index excluding effects of VAT, excise taxes and subsidies from October 2022 to September 2023. This price index decreased by 1.39%. Our policy states that if there is a decrease, we will not reduce pensions. As soon as the price index increases in a subsequent year, this decrease is still incorporated.
Surcharge Schedule 3 applies if you left IBM between January 1, 1982 and December 31, 1995, and did not transfer your 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 October 2022 through September 2023. 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. Here we also look at the past and take into account all the years in which the supplement was lower than 1.75%. The price index fell by 1.39%. Our policy states that we do not reduce pensions in the event of a fall. As soon as the price index rises in a subsequent year, this decrease is still processed.
Surcharge is not a given
Currently, SPIN is in good financial shape. Within our means, we are doing everything we can to keep it that way. However, a supplement cannot be taken for granted. Whether we can increase your pension depends on legislation, general developments and our financial position. SPIN’s financial position is reflected in our coverage ratio. This also depends on how things are going on the financial markets. Therefore, it may happen that in the future we will not be able to compensate or only partially compensate for price increases.
You can find the current status of our funding ratio at spin.co.uk/defunding-degree.