We invest the pension contributions paid into the pension plan with the aim of growing pension capital and helping to keep pensions affordable in the future. We also invest as responsibly as possible. This means we want our investments to contribute to a world worth living in.

Allocation of investment results to your personal pension capital

Under the pension plan, active members, former members and pensioners collectively share the risks and returns of investing. However, the impact differs by age. This applies to both positive and negative investment results.

Investing involves risks. Returns can be positive or negative. Our investment portfolio contains both higher-risk and lower-risk investments. In accordance with the rules set out in the pension plan, investment results are divided into two types of return: protection return and excess return.

The steps are outlined below.

Each month, we allocate the various financial results to the personal pension capital of all active members, former members and pensioners.

For pensioners, we then determine the pension benefit once a year for the following year (see Annual Adjustment of Pension Benefits). This is based on all returns achieved during the period from November through October.

Steps in the allocation of investment results

1. Investment costs

2. Protection return relating to changes in interest rates

3. Excess return after the allocation of protection return

4. Allocation of results arising from people living shorter or longer than expected

Investment costs

We invest all personal pension capital collectively on behalf of all members. This involves costs.

Investment management costs are deducted from the investment return first. In My Pension, these costs have already been taken into account. As a result, the return shown in My Pension reflects the return after investment costs have been deducted.

The level of these costs varies from year to year. You can find more information about investment management costs on our website.

Protection return relating to changes in interest rates

Many investment categories are strongly influenced by interest rates. Each month, we monitor interest rate movements and assess their impact on your personal pension capital.

Part of the investment return is used to limit the negative impact of interest rate changes on your future pension benefit.

If interest rates fall, we need more money to provide the same level of pension benefits in the future. To reduce or offset this effect, we add a return to your personal pension capital. This is called the protection return.

The level of protection depends on age. From approximately age 51, your personal pension capital is gradually protected against the negative effects of interest rate changes. By retirement age, approximately 90% of your pension capital is protected.

If interest rates rise, we need less money from your personal pension capital to provide your pension benefit. As a result, the value of your personal pension capital may decrease.

Protection return is particularly important for older active members, former members and pensioners. We aim to avoid large fluctuations in pension benefits. Younger members receive less protection because there is still a long period before their pension starts.

As an active member, former member or pensioner, you can track the development of your personal pension capital in My Pension.

Excess return after the allocation of protection return

After allocating the protection return, the remaining investment return is allocated as excess return.

This excess return is allocated to all active members, former members and pensioners according to predetermined allocation rules. Younger age groups generally receive a larger share of the excess return because a greater proportion of their pension capital is invested in higher-risk investments.

The detailed allocation rules for excess return can be found in the Pension Regulations.

Allocation of results arising from people living shorter or longer than expected

When determining pension benefits, the pension fund uses assumptions about average life expectancy in the Netherlands.

If people live longer than expected on average, additional funds are needed to pay pensions. If people live for a shorter period than expected, funds become available.

The difference between expected and actual life expectancy results in what is known as biometric return.

This result is also allocated each month among all active members, former members and pensioners.

Overview in My Pension

You can track your personal pension capital in My Pension.

You can also find an estimate of your future pension benefit there.

Under our pension plan, pension benefits are variable. This applies to:

• old-age pension;

• partner's pension; and

• orphan's pension.

Your pension benefit is adjusted annually.

For more information about how your pension benefit is determined, please see the page Annual adjustment of pension benefits.