Featured statistic: 1.8%

Date 6 February 2007

This year’s increase of pension benefits, at 1.8%, is higher than inflation. Pension benefits are adjusted every year so as to offset the loss of purchasing power as a result of inflation. During the past few years, however, many pension funds lacked the means to fund fully inflation-linked pension increases. This had an adverse effect on the incomes of pensioners (see Chart).

Chart Pension indexation

In 2007, however, the indexation of pension benefits exceeds last year’s price inflation rate, 1.8%, for the first time. (Note that pension indexation is always based on the previous year’s figures.)

Because the accrued pension entitlements of active employees with average-pay-based pension schemes are also affected by inflation, they, too, are adjusted every year. In this case, however, most pension funds apply the wage index, which in 2006 was 2.0%, so that pension entitlements keep pace with (negotiated) last year’s wage increase.

A more detailed analysis of pension indexation will be published in the March 2007 Statistical Bulletin (publishing date of the Dutch version: 29 March - please allow some weeks for the English translation).