1
The new pension system
A new law laying down the rules for the new system entered into force on 1 July 2023. But preparations already began long before that. In 2022, we advised the social partners on which of the two contract forms is most suitable for TNO. What’s more, consideration has already been given to the options for compensation and the implications for investment policy.
We have already been working on the new system together with the TNO Works Council’s pension committees, the Accountability Body, and the Association of Pensioners, eTNOs. Our aim is to be ready to switch to the new pension scheme on 1 January 2026. We will keep you informed. Check out this video and put 11 October 2023 in your diary, because that is when there will be another webinar about all the developments around the new pension scheme.
2
Investment portfolio
The cost-return-risk pyramid had already been properly mapped out. In 2022, we focused on investments and took a critical look at the make-up of the investment portfolio. We checked that everything was well balanced. As a result, the TNO Pension Fund’s ambitions are in line with the Fund’s investment policy. Want to know how we invest? Take a look at our investment portfolio.
3
Sustainability
This year, sustainability was also particularly high on the agenda for the Pension Fund. In addition to updating our ESG policy, further actions were needed based on EU regulations. We also developed our climate policy further. One thing you will notice about this is that last year, in addition to excluding certain countries and companies, we have chosen to explicitly contribute to social issues that are key to governance and members. And did you know that there is a special paragraph on sustainability in the annual report?
Your opinion is important
‘The fact that the Pension Fund is no longer investing in coal is a great start, but I hope that the ambition extends to being totally future-proof and fossil-free.’
Camilla van Wirdum, Life & Pension, March 2022, ‘From fossil fuel to green energy: how can we do it?’
We regularly ask you to tell us what you think of TNO Pension Fund. It’s important for us to hear about your experience of our service. But we also want to know how much risk you want to take with your pension. In one of the surveys last year, we asked what you thought about the sustainability aspects of our investment policy. The reason we run these surveys is because we are a foundation, and we care about what happens when you retire. And that is why your opinion is important. That is the strength and benefit of a workplace pension fund. We bring you closer to your pension, taking your preferences into account as much as possible. So, make your voice heard.
Recent surveys:
- Risk appetite survey: how much risk do you want to run with your pension?
- Sustainability policy survey: support for responsible investment policy is high.
- And more recently: Customer satisfaction survey what is going well and what could be better?
In 2022, we were confronted with high inflation and rising interest rates, a result of global trade resuming after successive lockdowns in 2021, but inflation was further increased by the war in Ukraine the following year. Gas and food prices rose, which in turn had an impact on increased inflation.
The increase in interest rates has also increased the coverage rate, which is a good thing. The higher interest rates mean we don’t need as much cash available to meet our pension obligations in the future. Ultimately, this resulted in a high indexation. Despite the negative return of -19.1% and the large loss in 2022, there was a high indexation as of 1 January 2023.
You can read more about this topic in the Risk Management section of the Annual Report (starting on page 48), where you’ll find a detailed explanation of how we manage all kinds of risks that affect the Pension Fund and therefore your pension scheme.
High inflation and interest rates: a strong contrast
The survey into risk appetite is important because pensions are changing. The arrival of the new system also means that we will need to make choices about the pension scheme. When we take decisions, we want to include the opinions of all stakeholders. In this way, we can together create a new pension scheme that matches your needs.
Life & Pension, July 2022, ‘How do you look at your pension?’
Brief preview
Of course, in this annual report we also look ahead: what developments will play an important role in the coming period?
Help with your pension choices It’s important to have financial insight into your pension scheme and understand how it works. Especially with the new pension scheme, we will have a legal requirement to help you and explain everything properly. If you are faced with choices about your pension, it’s important for you to understand how it works. You’ll definitely be seeing a lot of this.
Step by step towards your new pension Our expected go-live date of 1 January 2026 might still be a while away, but we are moving step by step towards the new pension system. As we make all the preparations behind the scenes, we will keep you up to date and take you through the latest developments. If there is any action for you to take, we will of course let you know. But for now, put the webinar on 11 October 2023 in your diary.
Data quality and security Data quality and security are still important, which comes as no surprise of course. With more and more processes being digitalized and the transition to the new system, all our data has to be in order. Data security plays a major role in this. Protecting privacy is a top priority for the Board, and we work closely with our pension administrator, AZL, for this. A new IT platform is being developed, which will include ‘My Pension’ and the website. There’s nothing better than an integrated system.
The digital environment is being updated so we can inform you even better in the future about all your pension options. We’re doing this in stages. In the future, you’ll be able to arrange your pension from A to Z yourself in the completely updated environment.
Life & Pension, March 2022, ‘Good to know: ‘My pension’
‘Long before I stopped working, I made sure I had Fridays free and used those days to visit museums or go sailing. It’s a way to get used to spending more time on your own doing fun things, so you don’t suddenly have a completely different life when you retire.’
Hans Hooghart, Life & Pension, March 2022, ‘Retiring is just like taking a very long holiday’