Brochure Value transfer

Transcription

1 Brochure Value transfer

2 Value transfer As soon as you start working for DSM 1 you will begin accruing your pension with Pensioenfonds DSM Nederland (PDN). If you have already accrued pension with another pension fund, you can have this pension transferred to PDN. The amount of your accrued pension determines how this will take place. If your accrued pension is less than per year, your previous pension fund will automatically ensure that your pension is transferred to PDN. If your accrued pension exceeds per year, you yourself can decide whether you want to take your pension with you to the new pension scheme. This may be beneficial in certain circumstances, for example if your new employer offers a better pension scheme. If you would prefer to have all your pensions brought under a single pension fund, let your new pension fund know that you want to take your pension with you. Value transfer ultimately allows you to move your pension capital to one pension fund (pension fund or insurer). This means that you will receive your pension benefit from one fund when you retire, instead of from two or more pension funds. Value transfer can have advantages, but also disadvantages. At the end of this brochure are a number of situations which will give you an idea of the points you can take into consideration. This will let you see whether or not value transfer is right for you. This brochure on value transfer does not apply to you if: you leave work to start your own business; you do not have a new employer; you want to transfer your pension rights to or from another country (in that case, see the International Value Transfer brochure). Pension rights You have accrued a certain amount of pension rights with a previous employer. However, the pension rights you accrued with the other employer are not the same as the pension rights at PDN. There are a number of factors which influence the calculation of your pension rights at PDN. For example, did you only save for a retirement pension with your previous employer or for a partner s pension as well? Perhaps you were still allowed to make voluntary supplementary pension savings with your previous employer. All of this will determine the amount of your pension rights. If you transfer your pension to PDN, PDN will receive the value of your pension from your previous pension fund. PDN will convert this value into PDN pension rights. You will then receive these as extra pension rights on top of the pension rights which you will accrue in years to come as an employee of DSM 1. 1 ) For DSM, please also read other associated subsidiaries included in Annex 1 of the PDN Pension Regulations. Brochure Value transfer, version

3 The total value of the pension rights you have accrued with previous employers will be retained in full. However, it may be that you will be able to use this total value to purchase a greater or lesser number of pension rights, owing to differences in the pension schemes and changes in salary. In most cases there are no costs involved in transferring your pension. You do not have to pay a penalty, for instance, like you do when you switch mortgage. In such a case, the value transfer procedure will in any case take longer than usual. If this is the case, PDN will also send you a letter informing you that it will take a bit longer. When PDN has finally received all of the information, we will begin our calculations to determine the PDN pension entitlements yielded by the transfer value on the date of your application. Once this is known, you will receive another letter from PDN containing a statement of how many pension rights your old pension is worth. Only then will you decide whether you want to go ahead with the value transfer. If you do decide to go ahead, you must sign the statement and return it to PDN within two months. When PDN has received your statement back from you, we will ask your previous pension fund to transfer the value of your pension rights to PDN and the procedure will then be complete. Transferring your pension to PDN In order to transfer your pension, you have to request and fill in the value transfer request form. This form can be found here. When PDN receives the completed form, it will contact the pension fund at which you previously accrued your pension. PDN will then ask this pension fund about the value of the pension you accrued there the so-called transfer value or, in other words, how much your pension rights are worth in euros. Your previous employer s pension fund has two months to send this information to PDN. Sometimes, however, a pension fund may fail to respond, and in that case PDN will send them a reminder letter after two months. PDN hopes that this will elicit a response from the pension fund. However, it might be necessary to recalculate the precise pension rights yielded by the money from your previous pension fund. This is because pension capital is sometimes held in shares or other securities which can change in value day by day. The legal factors also have to be applied during the calculation. These factors are redetermined each year and may therefore change (usually on 1 January). Since the value transfer process can last months, the amount which is eventually transferred to PDN may be higher or lower than it was at the time your previous pension fund sent us the information. You can find information about this in the final letter which also states that the value transfer has been completed. Brochure Value transfer, version

4 What exactly can you transfer? First and foremost, you can of course transfer your own retirement pension. If you have also saved for a partner s pension, this can only be transferred if your partner gives their permission by signing the statement from PDN. If your partner does not sign, the partner s pension will remain at your previous employer s pension fund. In that case, PDN will send you a new statement which you will have to sign if you want the value transfer to go ahead. If you are divorced, part of your accrued pension will potentially remain with the former pension fund. This part is intended for your former partner. This is the partner s pension. The law stipulates that this must remain behind. What is the sensible thing to do? PDN cannot decide for you whether or not it is sensible to go ahead with value transfer. However, the situations below will give you an idea of the points you can take into consideration. This will let you see whether or not value transfer is right for you. Type of pension scheme The type of pension scheme affects how you accrue pension. PDN s pension scheme is an average wage scheme. You accrue 1.738% pension per year. What type of pension scheme does your former employer have? Yes or no to value transfer? A difficult choice. Value transfer is interesting if the PDN pension scheme is comparable to or better than your former employer s pension scheme. But when is it better for you? It is not possible to give a clear answer, as this depends on your personal situation and the different parts of the pension scheme. What is an advantage for one person might be a disadvantage for someone else. It is therefore advisable to give it some thought before making your decision about value transfer. Your personal situation will decide! If you are single, you might not find it important for the pension scheme to include a partner s pension. However, if you are married, you might consider that to be the most important thing! If you do not have any children, then you will probably not give much thought to an orphans pension, but, as a young parent, you may suddenly feel completely differently about this. In short, your personal situation will decide what is important to you in a pension scheme. Purchasing power PDN s pension scheme includes indexation. Indexation allows your pension to rise (partly) in line with inflation. Make sure you are aware of the applicable conditions. Any pension which is left behind in your former employer s pension scheme is usually subject to a different form of indexation. If no value transfer takes place, you will be a deferred member in that pension scheme. The pension rights of deferred members usually rise in line with price trends. The pension rights of employees in PDN s pension scheme usually rise (under certain conditions) in line with wage trends at DSM NL Services B.V. The rise in wages at DSM NL Services B.V. is often higher than the rise in prices. Brochure Value transfer, version

5 The indexation of the pension rights at PDN is conditional. This means that there is no guarantee that the rights will be indexed every year. You can find more information about indexation in the Indexation brochure. Cuts and indexation catch-up increase If the funding level of a pension fund is too low, it may occasionally have to lower pensions. Is there a chance that your former pension fund might lower your pension? It might be the case that there have recently been cuts to your pension in your former employer s pension scheme. Perhaps indexation has been (partly) dispensed with. If your former employer s pension fund catches up on cuts or missed indexation you will probably miss out on this following value transfer. Ease and additional options If you have a number of small pensions with different pension funds, it might be easier to combine them. That way, you only have one fund to deal with. Take a look at the options offered by PDN s pension scheme and then compare them to the options in your former employer s pension scheme. The advantages and disadvantages of value transfer thus depend on how PDN s pension scheme compares with your former employer s pension scheme. You will have to weigh up the advantages and disadvantages, which can be quite complicated. That is why it is a good idea to ask someone for advice, for example your employer or a pension advisor. Guarantees Following value transfer, your pension will be treated as though it was accrued in the new pension scheme. If your former scheme had a certain guarantee you will lose this following value transfer. Partner s and orphan s pension PDN s pension scheme contains a partner s and orphan s pension. If you did not accrue any partner s and orphan s pension in the former pension scheme, value transfer may lead to a higher partner s and orphan s pension. Investing You cannot invest in PDN s pension scheme yourself. You might feel comfortable doing this, or perhaps not so much. It is also important that you are aware of the risks which investing entails. The risk of a fall in prices is borne by you as the employee! Brochure Value transfer, version

6 Procedure If your accrued pension is less than per year, the value transfer happens automatically if your former pension fund has chosen to exercise the right to automatic transfer. If your accrued pension exceeds per year, you must apply for it yourself. Complete the form and send it to PDN. See for the value transfer request form or click here. Complete the form and send it to PDN. PDN will send you a confirmation of receipt for your request. Within one month, PDN will contact your previous pension fund and ask for a statement indicating the value of the pension you have accrued during service. Within two months, your previous pension fund will notify PDN of the value of the pension accrued in the past. Once PDN has received this information, PDN calculates what the pension accrued elsewhere will yield in terms of pension entitlements with PDN. It will do so within two months. You will receive an indication from PDN, which you will be expected to return within one month if you wish to proceed and have the value transferred to PDN. Upon receipt of the signed indication form, PDN will contact your former pension fund and ask him to transfer the money he ows you. Your previous pension fund must transfer the amount due to PDN within 10 working days. Once PDN has received the said amount from your previous pension fund, you will be notified that the value transfer has been completed. Possibly the pension rights need to be recalculated, because your pension capital is sometimes invested in shares or other securities and the value of which may fluctuate on a day-to-day basis. Brochure Value transfer, version

7 Contact If you have any questions about your pension visit the website: or contact our Pension Desk: tel or Pension regulations Read more about value transfer in the pension regulations by clicking on the icon. Disclaimer The information provided in this brochure by Stichting Pensioenfonds DSM Nederland, based in Heerlen (the pension fund) is general, purely indicative and subject to change. It is intended only to provide members with a general view. The information provided is assumed to be reliable, but is used entirely at the user s risk. Neither the administrator (DSM Pension Services B.V.), nor the pension fund accepts any liability for damage arising from errors or omissions in the information, or for damage arising in connection with the use of, reliance on, or distribution of the information. Rights can be derived only from the pension regulations applying to the member. Brochure Value transfer, version