We have decided not to increase pensions per January 1, 2024. An increase depends on the following two topics:
- the increase in consumer prices (October-October); and
- the policy funding ratio. This indicates the financial situation of the pension fund.
The increase in consumer prices in the period October 2022-October 2023 is decisive for an increase in pensions. In this period, consumer prices did not rise, but fell by 0.4%. When consumer prices fall, pensions are not adjusted downwards, but the fall in consumer prices does mean that we cannot increase pensions.
In recent years, prices have fluctuated enormously. These price increases were fully reflected in the increase in consumer prices over the period October 2021-October 2022. At the end of 2022, we decided that we would fully follow this price increase. Per January 1, 2023, we have increased pensions by 14.33%. We also fully followed the price increase of the previous year (period October 2020 – October 2021) as of July 1, 2022 with an increase in pensions of 3.42%.
In summary, in 2022, 2023 and 2024, pensions follow the full increase in prices.
Increase of consumer prices
The Central Bureau of Statistics (CBS) measures the level of prices in the Netherlands. Every month, they publish the increase in consumer prices based on their measurements. According to the CBS, the increase in prices over the period October 2021 – October 2022 was extremely high at 14.33%. That was because energy prices were peaking at the time. Since then, energy prices have fallen considerably. The prices of food and many other things have risen further in the past year. Due to the increase in food prices and the decrease in energy prices, consumer prices fell by 0.4% over the period October 2022 – October 2023 in the past year.
The policy funding ratio
The policy funding ratio of the Heineken Pension Fund was 134.4% on 30 September 2023. According to the legal rules and our policy, we would be allowed to increase pensions partially. Due to the fall in the consumer prices, we will not be able to increase pensions this year.
Some other pension funds are increasing pensions. How is that possible?
Each pension fund has its own indexation policy and financial situation. A pension fund may use a different period for consumer prices. For example, July to July: there was an increase in consumer prices then. However, the increase over the previous year was less high than in October-October. Some pension funds have only partially increased pensions in 2023 and will (partially) make up for the ungranted part in 2024. This does not apply to us because we increased pensions in the previous year by the full increase in consumer prices.
What about the ungranted increases in previous years?
According to the law, a higher policy funding ratio is required in order to make up for ungranted increases from the past. That is why we cannot make up for the ungranted increases.
