The new system and TNO Pension Fund
What does that mean, why a new system, what does TNO Pension Fund do and, above all: what do you need to know? You can read about it here.
What you need to know
It will take some time before we finally switch to the new pension system. That will be no later than 2027; we are aiming for 2024 or 2025. If there is anything you need to do yourself, we will let you know via e-mail or a personal letter from us or TNO or another employer affiliated with TNO Pension Fund. That is important to know. Furthermore, until the start of the new system, we will keep you informed with short updates via Life & Pension. Detailed information can be found on this page: www.specials.pensioenfondstno.nl/nieuw-pensioenstelsel. This is the central point where we gather everything. Because the page is very new, you will see the information there that you also read here plus the questions asked during the webinar of 9 June 2021.
Do you need to take action in connection with the new pension system? Then you will receive an e-mail or letter from us or your employer.
You can expect the following in the next few years
On 1 January 2023, a new law laying down the rules for the new pension system will enter into force. Until recently the intended date was 1 January 2022, but it has recently been postponed to 2023. As soon as the new law takes effect, we as a fund can start applying the new rules and developing our new pension scheme. At that time, we will be able to see in concrete terms how the pension agreement works for us in practice. Once we have developed our new pension scheme, we will make a customized calculation for everyone.
All these steps are expected to take several years. The actual start of the new pension scheme is no later than 1 January 2027. We are aiming for 2024 or 2025. So you will be hearing a lot about this in the years to come. We have a special page about the new pension scheme where we will gather all information that is relevant for you in the upcoming period.
What does TNO Pension Fund do?
Behind the scenes, we have already started preparations so that we can actually move to the new system in 2024 or 2025. We have a route for implementation and a project plan. In particular, how to achieve a good transitional scheme is being considered, so that everyone benefits equally from the new opportunities. The Board of TNO Pension Fund is getting everything prepared and is consulting with all social partners. Ultimately, it is up to the Board and the works council of TNO to make a decision and to choose one of the two schemes from the new system. This means that the social partners make the choice. After all, a pension is part of your employment conditions. Of course, the outlines are already known.
Please note that we are still at the beginning of the process. First, the law still has to be enacted on 1 January 2023; once this takes place, a choice can then be made on how to develop the scheme for TNO Pension Fund.
Ultimately, it is up to the social partners of TNO to decide on the new pension scheme. After all, a pension is part of your employment conditions.
Main features of the new system: the two schemes
What if the social partners opt for the individual scheme? An important feature of this scheme is that you accrue personal assets. You can make limited individual choices, such as your investment profile. In the benefit phase, however, the risks are shared collectively. This differs in the collective scheme. If this is chosen, you receive a share of the collective assets. The risks during the accrual phase are also shared collectively.
Whichever scheme is chosen, the pension fund calculates each year what your personal accrual is in the new scheme or what your share of the pension assets is. And based on this, we make an estimate of your future pension. The outcome of this calculation will differ each year. Pensions will therefore fluctuate. There will, of course, be rules to protect the pensions of older people from interest rate changes, so that they fluctuate as little as possible. Young people therefore run more investment risk than older people.
Why a new system?
The current system is fragile. We are living longer and investment returns are uncertain. Then there is the changing labour market. Young people are still generally paying too much for the pension they will receive later, and older people too little. That is not a problem if you accrue pension with one pension fund all your life. It is a problem when employees start their own business later in life and leave a pension fund. They will then later receive less pension than they paid for with their employer. This last aspect is less important for TNO Pension Fund because a non-contributory threshold applies to TNO employees. In 2021, as in previous years, this is €28,572. You do not have to pay any employee contribution on this part of your salary.
Overall, what is most noticeable is that the current system together with the current regulations works poorly at low interest rates. The new rules ensure that pensions increase sooner when the economy is doing well. It is also more likely to go down when the economy is worse. So your pension moves with the economy. The new system also makes pensions fairer: young and old get the pension they and their employer have paid for.