Dutch pension fund Pensioenfonds Zorg en Welzijn (PFZW) has announced plans to increase pensions for all members by 2.7 per cent as of 1 October 2022, based on 2021 inflation levels.

The announcement was highlighted as good news for all members amid the recent rise in prices, with retirees in particular expected to benefit from the increase
in pension benefits.

The scheme was able to increase pensions thanks to recent law changes, which will allow schemes to increase pensions if their policy funding ratio is above 105 per cent, with PGZW's policy funding ratio stood at 105.2 per cent as at 31 May 2022.

The board confirmed that it considered the impact on all members when considering the increase, agreeing on an additional legal condition to transfer the current accrued pensions to a new pension scheme, which it expects to introduce in 2026.

However, the scheme acknowledged that the indexation decision will likely result in a worsened financial position in future, confirming that the board does not expect the financial situation in 2023 to be sufficient to allow for a further maximum increase as a result, although it will meet in autumn to confirm this.

PFZW president, Joanne Kellerman, said: “We realise that this is a small increase compared to the total backlog that our participants have incurred due to the lack of indexation in recent years.

"Nevertheless, we are pleased to be able to slightly increase entitlements and pensions in this time of rising prices. For retirees, the pension benefit will increase. For all others, the accrued pension entitlements are increased."

The rule change, to come into force from 1 July ahead of the new pensions system, has also prompted similar announcements from Dutch pension fund ABP, which announced a 2.39 per cent increase for members' pensions earlier this week.

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