Question: My pension is going to develop more in parallel with the economy. What does this actually mean?

ANSWER:

In case you have not yet retired
Under the new Forward scheme members will have a “personal pension pot”. You can then see at any time how much money you have saved in total for later. The value of the pot will change over time: the pension capital will grow as a result of positive returns on the investments and (as long as you are working at Unilever) amounts you and your employer pay in. However, the pension capital can also fall as a result of negative investment returns.

Your accrued pension capital at Forward will therefore be in a constant state of flux and how much pension you receive later on will not yet be fixed. Until such time as you retire, you will receive a regular indicative projection (for different economic scenarios) based on the content of “your pot”.

The actual amount of your pension will be determined on your retirement date, and will change from year to year.

In case you have already retired
Once your pension has become payable, it is also going to develop more in parallel with the economy than now. This means that it can be increased faster if the economy is doing well, but also decreased faster if the economy is doing badly. 

Remember that in the future pension funds will continue to do all they can to ensure payable pensions do not go down or only go down the minimum possible. Poor investment results may for example be “smoothed out” over several years. It will also be possible to gradually reduce the risk on the investments as your retirement date approaches. These measures are designed to prevent big fluctuations for the retired and nearly retired.

Indexation will disappear
In the current situation, pensions (accrued and payable) are increased each year, on condition that Forward is financially in a healthy position. Such an increase is known as ‘indexation’. As long as you are in service of Unilever, the rate of the CLA wage increase at Unilever is the starting point for the pension increase. After retirement, indexation is based on price developments (inflation). In the new situation this way of increasing pensions will disappear and your pension will be increased or possibly reduced on the basis of investment results.

Q&A: Why are we having new pension rules anyway?

Q&A: Much is about to change, but what is not actually changing?

 

April 2024