How financially healthy are we?
We’ve listed the figures for you to give you an impression of how your pension fund is doing. That’s important, because it affects your pension and your future.
123.8%
Policy coverage ratio An important yardstick of a pension fund’s financial health is its policy funding level. This is the average funding level of the last 12 months. If the number is 100%, there’s exactly enough to meet all of the fund’s commitments. We closed the year at 123.4% and by February 2025, that has increase to 123.8%. This means we have sufficient reserves to absorb asset fluctuations.
The white line in the graph shows the trend over the past period. The orange line is the minimum required funding level (De Nederlandsche Bank’s norm). The light blue line is the funding level that best matches the risks of TNO Pension Fund.
0.83%
Return Another important figure is the return. How are TNO Pension Fund’s investments doing? We ended the year 2024 with a return of 9.1%. Currently, the yield stands at 0.83% (February 2025).
If you take part in the Extra or Net Pension Scheme, you accumulate capital at your own risk at Goldman Sachs Asset Management (formerly NN IP). In February 2025, that return reached 0.21%. You can see how your capital is doing at Goldman Sachs: https://wn-mijnpensioen.gsam.com.
How is the market changing? The stock markets rose slightly in the first two months of 2025 as compared to late-2024. The markets started the year on a positive note after President Trump took office. The last week of February, however, saw a turnaround after the Trump Administration announced new import tariffs on several countries and products. Markets reacted negatively to this development, as import tariffs are expected to lead to higher inflation and lower economic growth. Consequently, interest rates in both Europe and the US rose slightly in the first two months of 2025 as a result of these developments. On balance, the EUR/USD remained relatively flat.
If you would like more information, follow the news on our website.
Lump sum: update
The expected effective date of the new law allowing you to withdraw up to 10% of your accrued pension in one lump sum now stands at 1 July 2026.
We have mentioned it on various occasion: there is a bill waiting to be passed that will regulate that you can withdraw a lump sum at the start of your retirement. The expected effective date of the ‘Lump Sum’ Act has recently been postponed again and now stands at 1 July 2026.
The decision moment If the law is passed, you will be able to choose – before your pension starts – whether you want to take advantage of 'Lump Sum’. You will then receive up to 10% of your accrued pension on the your first day of retirement or in January after your state pension date. You can then use that amount, for example, for travel, renovations, a major purchase, nursing or care or to pay off your mortgage or other debt.
Calculation tool A major reason for delaying the 'Lump Sum' law is that there should also be an effective calculation tool so that you can see what choosing a 'Lump Sum' means, as that choice will have an impact on other income and expenses.
What you should keep in mind If you opt for a 'Lump Sum’, you should consider at least the following things:
- The pension you will receive each month from TNO Pension Fund will be lower for the rest of your life.
- With the lump sum, your income increases. This will affect your taxes and social security contributions, tax credits and other income-related schemes in the calendar year in which you receive the lump sum.
- Allowances you receive in that year (such as a rent or care allowance) may be reduced; you may even have to pay something back. A benefit may also be reduced.
- The healthcare premium deducted from your pension will increase.
- If you withdraw a lump sum, you can no longer opt for a temporarily higher or lower pension.
As soon as we know more next year, we will of course inform you via the website and in Life & Pension.
Alternatives Moreover, you do not have to wait until then because there are other options, such as receiving a high-low pension or an AOW (state old-age pension) bridging pension. Perhaps that will also help you achieve your intended goal. There is also, of course, the option to retire or partially retire earlier or later. It is also possible to exchange a partner's pension or part of it for an old-age pension for yourself.
Indexation on 1 January 2025 1.42%
Whereas there was no possibility to index pensions in 2024 due to negative inflation, as of 1 January 2025, pensions will increase by 1.42%.
The ambition is to increase the pension entitlements and pension rights of members, former members and pension beneficiaries each year in line with full price increases. That was not possible. The policy funding level should then be around 134%. The policy funding level was too low as of the end 2024: 123.4%.
How does the pension fund determine that? First, we look at inflation over the year. To do this, the Board uses the derived Consumer Price Index (CPI derivative) for the period October 2023 to October 2024. During that period, prices rose by 2.58%.
A number of statutory guidelines also apply to indexation. The financial condition of the Pension Fund must be healthy. A policy funding level of 100% means that a pension fund has just enough money to administer pensions. For partial indexation, the policy funding level must be at least 110%. Full indexation is only possible starting at approximately 134%. However, the policy funding level at the end of December 2024 was 123.4%. Full indexation was therefore not possible. We arrived at an indexation of 1.42%.
Previous years If you look back over the past 15 years, you can see that we have not always been able to fully index pensions. TNO Pension Fund’s reserves were not high enough to make that possible.
However, when inflation was very high over 2021 and 2022, statutory opportunities were utilised to effect additional indexation in connection with the transition to the new pension system.
Although this enabled the fund to significantly reduce the indexation gap, it is still 9.1%. This year another 1.16% will be added. This means that a maximum indexation backlog of 10.3% remains as of 1 January 2025.
The figures for recent years can be found here (in Dutch) on our website.
The maximum indexation backlog only applies to former participants who stopped working at an affiliated company 15 years ago or those who have been pension beneficiaries since 2009. This percentage is lower for the remaining participants.
Your pension in 2025
Various adjustments are made in the pension scheme parameters each year. This concerns tax aspects as well as the outcome of the TNO terms of employment negotiations. We have set out the most important points here.
The pension scheme in 2025:
- Like last year, pension accrual in 2025 is also at the pension ambition level: 1.75%.
- Just as in 2024, the pension contribution rate in 2025 is 20.34%. You do not pay this contribution entirely yourself as part of it is paid by the employer. You can see how much this is on your January payslip.
- The ‘threshold amount’ or franchise is €18,124 (this was €17,427) as of 1 January 2025. This is the amount over which you don’t accrue a pension. It’s roughly equal to the state pension you will receive from the government when you reach state retirement age.
- Like last year, the statutory maximum amount over which you can accrue old-age and partner's pension is once again €137,800. This is because the government has decided not to index that amount in 2025 and 2026.
- If you’re already participating in the Extra or Net Pension scheme, you can supplement your pension; joining now is no longer possible.
See what’s changing
You can see the changes as of 2025 in the TNO Pension Fund portal. Your UPO 2025 is also ready there. Go to ‘My Pension’ and log in with your DigiD. You can then use your data in the portal to determine for yourself whether you will ultimately accrue enough pension. If you have problems logging in, please contact the AZL pension administrator.
Do you have TOP or Extra Pension?
In the new pension scheme, there is no longer a TOP or Extra Pension scheme. You won't lose the money, though, because it will simply be added to your capital for your old-age pension. If you have TOP capital and/or Extra Pension capital, you have also received a letter about this.
You can utilise TOP until early 2026 As the TOP scheme is a specific scheme for retiring earlier or already start working fewer hours, we have a tip. If you are above the age of 59 on 1 July 2026, you can use your TOP now to enjoy your pre-pension (or part-time pre-pension). After the start of the new pensioen scheme, you can also stop working earlier, but then you will bring forward your entire pension.
Please contact our pension administrator, AZL, to have your TOP benefit take effect before the start of the new pension scheme.
How to supplement your pension Besides the state pension and the pension you accrue through your employer, you can also accrue pension on a voluntary basis. That will also be possible under the new pension scheme. However, you’ll need to have a little patience. From 1 January 2028 at the earliest, a new scheme will be available through TNO Pension Fund to supplement your pension. If you don't want to wait for that, you can supplement your pension with an annuity or bank savings.