The variable personal pension benefit can increase or decrease each year. You have the likelihood of a higher benefit because we invest part of your pension money. And you have the security of a basic component that we do not invest for you. Precisely in the balance that suits you, with between 15% and 60% invested at the start. You also have various options to adjust the benefit to your wishes and personal situation.
The variable personal pension benefit offers a personal balance between the likelihood of a higher pension benefit through investment and a basic component that we do not invest for you. The advantages include:
With variable pension benefits, you run some risks. Under the tab ‘Risks’ below, you can read more about this.
Because we invest part of your pension capital on your behalf, you have a likelihood of a higher payout. You do, however, run a risk. This is because the results of investments are uncertain, they may be favourable or unfavourable. If the results are favourable, your benefit may increase. If the results are unfavourable, your benefit may be reduced. Interest rate changes may also influence the level of your benefit. Your benefit may increase or decrease each year. Therefore, consider carefully whether a variable pension benefit suits you.
The variable personal pension benefit may suit you if:
The variable personal pension benefit is unlikely to suit you if:
If you are interested in Nationale-Nederlanden's variable personal pension benefit, it is important that you determine whether a variable pension benefit suits you and how much investment risk you are able and willing to run. You can determine this using our online risk profiler. If a variable pension benefit suits you, you can ask for a quotation.
You can determine your own risk profile, make choices and request a quotation accordingly.
Remember: within the variable personal pension benefit, you can also choose a benefit that is higher in the first few years and lower thereafter (‘high-low’). However, this choice has consequences for the risks you run and for determining any possible partner’s pension. Therefore, you cannot make a calculation or request a quotation for this yourself in mijn.nn. For a detailed explanation and a quotation for a variable personal pension benefit with high-low, please contact a financial advisor.
You can read more about the choices for your pension benefits under the tab ‘Choices’ and on the page Choices for your pension benefits.
Applying for a personal pension benefit
You can read more about how investing with your pension benefits works under the tab 'Investments'.
With the variable personal pension benefit, we invest part of your accrued pension money (‘pension capital’) on your behalf. The results of the investments may increase your pension benefit. If the results are unfavourable, your benefit may decrease. As a result, the amount of your benefit changes every year. We are happy to explain how this works.
Remember: if a variable pension benefit suits you and you select this option, you cannot convert it to a fixed pension benefit later on. Your choice to invest part of your pension money is permanent.
If you buy a variable personal pension benefit, we divide your pension capital into a basic component and an investment component.
The larger the investment component, the greater your benefit can rise or fall each year. The ratio of your pension capital between the basic component and the investment component at the start depends on how much risk you are able and willing to take.
It is important that you run as much risk as is appropriate to your wishes and circumstances. That is why you determine your risk profile with the risk profiler. This risk profiler indicates how much investment risk you are able and willing to take. On this basis, we determine the size of the basic component. We use the remainder of your pension capital to invest for you.
There are four risk profiles. At the start, each profile has a ratio of basic component to investment component:
If you are buying a variable personal pension benefit, we take into account the expected results of the investments when calculating the benefit from your investment component. We expect your investments to have a positive result. That's why we let your pension benefit start higher than in the case of a fixed benefit. We do this by calculating a fixed decrease of 1.8% per year at the start for the benefit from the investment component. The aim is for your pension benefit to increase in subsequent years due to the results of the investments. Based on past investment results, we expect your investments to have an average result that is 3% higher than the market interest rate at the time of the decrease.
If the results in a given year are as expected, the result will be higher than the established decrease. A change in the interest rate will therefore also affect the amount of your benefit. If interest rates have risen in the past year, this will have a positive effect. If interest rates have fallen, this will have a negative effect. If the investment results were as expected and the interest rate remained the same, the benefit from your investment component will increase that year. If the investment results are lower than 1.8% or if the interest rate falls, the benefit from your investment component may actually decrease that year.
You can read more about how the amount of your pension benefit is determined under the tab ‘Amount’.
We invest for you in the NN First Class Return Fund II-I-EUR. This is a mixed fund with diversified investments. That means it contains different types of investments, such as shares, bonds and real estate. This makes the results less dependent on how a particular asset class performs.
For more information on the NN First Class Return Fund II-I-EUR, please visit NN Investment Partners (NNIP) (Dutch). There you will find, for example, information about the investment policy, the type of investments in the fund, the price and the results of investments in recent months and years. You can also download the Key Investor Information (EBI) here.
If a variable pension benefit suits you and you select this option, you will have two choices to further tailor the benefit to your needs.
The pension scheme regulations of your employer include a certain retirement age. If you make no other choice, your pension benefit will start on the first of the month in which you reach this age. In other words, this is the retirement date of your pension scheme. However, you can also choose to retire earlier or later.
Remember: the retirement age in your pension scheme regulations may differ from the age at which you receive the Dutch state pension.
If you prefer to retire later, you can defer your ‘pension capital’. You do not purchase a pension benefit on the retirement date of your pension scheme. You buy the benefit only when you want your pension benefit to start. You do not make the choices for your pension benefit until then. This is how it works:
As long as you have not yet purchased a pension benefit, you can still choose to do so with another pension provider (‘shopping’).
If you die after your pension benefit has started, your benefit will stop. If you have a partner at that time, he or she may lose income as a result. You therefore purchase a partner's pension by default for your current partner at the same time as you purchase your own pension benefit. Your partner will then receive a lifelong benefit in the event of your death. The partner's pension is a certain percentage of your pension benefit. This is 70% by default.
But you and your partner can also make a choice other than the default option. You can choose to:
In the case of a variable pension benefit, the following applies to the partner’s pension:
This is how it works: we adjust the level of your own variable pension benefit each year. We do so based on, for instance, investment returns and movements in interest rates. The entitlement to a partner’s pension is a certain percentage of your benefit. So if your own benefit changes, the entitlement to a partner’s pension also increases or decreases. If you die, the level of the partner’s pension that we have determined for that year will apply. After that, the level remains the same.
If you have a partner, he or she must agree to your choice for a variable pension benefit. Your partner must therefore co-sign the quotation approval. If you do not have a partner, you do not need to purchase a partner’s pension and your own pension benefit will be higher.
You can choose a variable pension benefit that is higher in the first few years. Thereafter, the benefit will be lower (‘high-low’). You choose how many years you want a higher benefit, between one and ten years. This choice has consequences for the risks you run. Therefore, you cannot make a calculation or request a quotation for this yourself in mijn.nn. For a detailed explanation and a quotation for a variable personal pension benefit with high-low, please contact a financial advisor.
You can read more about the choices you can make for your pension benefit on the page Choices for your pension benefit.
Soon you may have a new choice when you retire. You can then receive part of your retirement pension in one go: a ‘lump sum’. With that money, you can do what you want. But if you choose a lump sum, your lifetime pension benefit will be lower. This new option will probably enter into force on 1 January 2023. That depends on when exactly the relevant law is passed.
How does this work exactly and what do you need to consider? And can you opt for a lump sum if you are retiring soon? We tell you all about it on the page Choices concerning your pension benefit.
After you buy your variable pension benefit, you run some risks.
We invest the investment component of your pension money (‘pension capital’) for you. We expect you to have a certain result from the investments. We therefore have your variable pension benefit start higher than a fixed pension benefit. Is the result better than we expected, your pension benefit may increase. If the investments perform less well, your pension benefit may decrease. This is the investment risk.
The investment fund contains foreign investments listed in other currencies. As a result, changes in the value of these currencies against the euro may affect your investments.
Every year we recalculate the benefit from the investment component. We incorporate the results of your investments.
When we recalculate the benefit from your investment component each year, we also include the rise or fall of the interest rate in the past year. If the interest rate has risen, this has a positive impact on the benefit from your investment component. If the interest rate has fallen, this has a negative impact.
Normally, prices rise slowly in the Netherlands. This is known as inflation. It means that in five years’ time, you will be able to buy less for € 100 than you can today. So in five years’ time, you will need more money to buy the same thing: your purchasing power will decrease. If your pension benefit increases due to changes in interest rates and the results of your investments, you suffer less or no impact from this inflation risk. If your benefit decreases, your purchasing power will be reduced even more.
We pay your variable pension benefit partly from your basic component and partly from your investment component. Subsequently, we recalculate the amount of the benefit from your investment component every year.
We pay part of your pension benefit from your basic component (‘the benefit from your basic component’). We calculate this when you buy the benefit, based on, for instance:
Do interest rates and average life expectancy change after you buy your pension? This no longer affects the amount of the benefit from your basic component.
We pay part of your pension benefit from your investment component (‘benefit from your investment component’). In the first year, we calculate the benefit from your investment component as well as the benefit from your basic component based on several factors: your choices, your pension capital, the interest rate, average life expectancy, partner’s pension and costs. We calculate the amount of your investment component for each subsequent year on the basis of, for instance, the results of the investments and the current interest rate. As a result, the amount of your variable pension benefit changes every year.
Moreover, we also calculate the benefit from your investment component with a fixed decrease of 1.8%. If no result has been gained on your investments and the market interest rate has not changed, the benefit from your investment component will decrease. This decrease is about 1.8% plus the market interest rate at that time. If the market interest rate is, for example, 1%, the benefit from your investment component will therefore decrease by approximately 2.8%. However, the investment results can (partly) make up for this fall.
Based on past investment results, we expect your investments to average a result that is as high as the market interest rate + 3%. If the results in a given year are as expected, the result will be higher than the established decrease.
In addition to making up for the decline, the change in interest rates also affects the amount of your benefit. If interest rates have risen in the past year, this will have a positive effect. If interest rates have fallen, this will have a negative effect. If the investment results were as expected and the interest rate remained the same, the benefit from your investment component will increase that year. If the investment results are lower than 1.8% or if the interest rate falls, the benefit from your investment component may actually decrease that year.
The amount of the established decrease must comply with the law. We check this every year. Only if necessary do we adjust the level of the decrease. This can never be higher than at the start of your pension benefit.
After the first year, we calculate the amount of the benefit from your investment component each year based on:
In the calculation, we always use the average life expectancy in the Netherlands that applied when you bought your pension. If the average life expectancy has changed since you bought the benefit, this will not affect the amount of the benefit from your investment component.
This document explains the annual changes to the variable pension benefit (in Dutch):
Life bonus
As long as you live, we will add a monthly amount to your investment component and buy investments for that purpose. This is known as the ‘life bonus’. You receive this because we do not pay out the value of investment components of other people with a personal pension benefit after they die. This allows us to add value to the investment component of your variable pension benefit. The level of the bonus will depend, for instance, on your age, the amount of your pension capital and the average life expectancy.
Partner’s pension
We calculate the level of the partner’s pension on the basis of 70% or 35% of your own pension benefit. If you choose high-low, we will calculate the level of the partner’s pension as if there were no high-low. The entitlement to a partner’s pension therefore moves in line with the results of the investments and changes in interest rates each year.
We calculate your pension benefit (and the partner’s pension) gross. But we pay your benefit net. This is because when you retire, we are legally obliged to withhold wage tax from your gross benefit. In addition to wage tax, we also deduct the income-related contribution for the Dutch Healthcare Insurance Act from your gross benefit. The deductions do not take into account the wage tax deduction.
You will find more information about the calculation method and various example calculations in the appendix to the quotation.
You pay various costs and possibly premiums for your variable pension benefit.
We charge administration fees for our services. These include the monthly payment of your pension and the costs we incur to inform you about your pension benefit.
We deduct one-off administration fees from your pension capital. So you will never have to pay these costs again. From the amount that remains, we calculate the amount of your variable pension benefit.
We invest part of your pension capital for you. This means that there are charges for the management of the investment funds and for transactions with the investment funds. These costs influence the amount of your investment value and therefore your variable pension benefit. The costs of investing consist of:
We are obliged to keep sufficient money (‘reserves’) to pay your pension benefits as long as you live. ‘Cost of earmarking funds’ is a fee you pay for the money we have to reserve for this purpose. For the investment component, we settle these costs each month by selling investments.
If you are buying a partner's pension for your current partner, you buy a part of that partner's pension from your basic component at the same time as your own pension benefit. For the other part of the partner's pension (which is part of your investment component), you pay a risk premium. We settle this risk premium monthly with your investment component by selling investments.
You can find the exact costs and possible premiums for the variable pension benefit based on your choices in the appendix to the quotation.
If you choose a variable personal pension benefit, we will invest for you in the NN First Class Return Fund II-I. This fund promotes environmental and/or social characteristics as described in Article 8 of the SFDR (Sustainable Finance Disclosure Regulation). You can find more information about the SFDR at nn.nl/beleggingsbeleid-pensioen (in Dutch). In the longer term, we expect responsible investment to make a positive contribution to the result achieved. NN IP manages the NN First Class Return Fund II-I. NN IP carries out ESG integration in three steps: