Hurrah! My pension is going up!
The new year started well for me. I won third prize in Megabreak's very first pool billiards tournament here in Pattaya and a day later a letter arrived in the mail from my pension fund.
I expected to find the Annual Statement 2016, but the date of the letter (December 13, 2016) should have woken me up. Mid-December is also the time for all kinds of organizations and authorities to announce that unfortunately the contribution for the following year has been increased or – in the case of a pension fund – the benefit has been reduced. You would almost get used to it.
But see, not in this case. In the letter it was stated that the pension fund checks each year to what extent my pension will increase in line with the prices, which is called the indexation scheme. Due to a favorable policy funding ratio in combination with the CBS Price Index, the Board has decided to increase my pension as of 1 January 2017. Like this!
Now I must first tell you that this pension fund is not the only fund from which I receive a pension benefit. I have changed employers a number of times during my working life, so I always had to deal with a different pension fund. I receive a monthly benefit from no less than 7 different institutions, of course all different amounts depending on my employment with a particular company.
I have not yet received a message from all funds about the payment for 2017, only one of them informed me that my pension payment for 2017 will not be reduced. I should see that as a positive announcement, because haven't our pensions been cut all the time in recent years? Well then!
Now you may want to know how much that increase in that pension is. I'm going to tell you openly. My pension payment in 2016 from that fund is now € 1692,00. and will be increased by 1% on 0,07 January. I then have exactly € 1,18 more to spend. If you think that it is still a nice amount, remember that the pension mentioned is not a monthly payment, but the annual total. Now you don't have to feel sorry for me, because in this case it concerns the smallest distribution of those 7 funds.
The increase is of course hardly anything, but I view it positively. Perhaps it is the start of a trend in pension payments. All pension funds do their best to at least achieve or even exceed the mandatory policy funding ratio. We may soon be able to count on a normal pension policy again, with the usual indexation being applied. Also in Thailand everything is getting more and more expensive!
As a pensioner in Thailand, have you already heard from your pension fund?
That increase of EUR 1,18 is quite a hefty increase, if you add the amount by which your benefit has not been reduced.
Incidentally, it seems to me that with 7 pension funds you will spend a lot of money on costs, if that money is transferred from those seven funds to Thailand.
That means 7 times costs.
To reassure Ruud: the 7 payments will come into 21 Dutch bank account between the 25st and 1th of a month. I then transfer part of that account to my Thai bank account, so only costs once!
No, but my Thai salary was increased by 3% last October. That percentage is the result of a 1,5 standard increase and 1,5% due to a high score on my KPI, Key Performance Indicators. These include the number of teaching hours as well as the number of research publications and how students rate your classes.
My pension fund PGB does not reduce the benefit. With a coverage ratio of 96 percent, an increase is not an option either. Thanks to the ECB for providing free money to the banks. Because the funding ratio must be 110 percent before an increase is allowed, I hope to experience that again in life and well-being. To be clear: there is almost 1500 billion in the Dutch pension pots. To ease the pain somewhat, my state pension will increase by 2 (two!) euros per month….
a) The ECB has no obligation whatsoever towards persons who have moved to live outside Euroland, because the cost of living is lower than in Euroland, so they already have an advantage over those left behind in Euroland. Moreover, as a result, the interest payment on the common (State) debt of E 490 billion has dropped from 5-7% to 1-2%, making the AOW, which is after all paid for by the CURRENT workers, a lot easier for the current AOW recipients.
b) It is not the current CONTENTS of the pension pots that are important, but the future revenues and future obligations. Due to reckless behavior in order to meet the needs of the pensioners ( = voters), only 20-25% of your own investment ( = low premium) has been assumed, with the rest up to 100% coming from returns (wishful thinking). And THOSE again depend on the actuarial interest rate.
The future obligations, which you again have to “cash into cash” with that discount rate (ask a 5-HAVO student with economics in the package) have never been so high and greater than the current + expected future content of those jars. Increasing (even maintaining) a pension is therefore outright robbery of future generations. Now 50+ = by then already long demented, so “after me the deluge”.
Calculation work 5-Havo level, see google and “cash future obligations”.
Wow, what aversion to the elderly sounds from your message. I am now 70 but still far from dementia. Please know your facts. What is and remains important is how much people have left after deducting their costs to provide for their living. All this considering the costs of that time. Perhaps an eye-opener, but for example I paid 11,5% mortgage interest. How much do people pay on average now? Sufficient AOW premiums were always paid to meet future obligations. However, there was a surplus in that separate pot and the then government transferred it to the General Resources pot.
Quite right, thanks to the Kok government, well, a quarter of a Kok, you know.
Every year, 1 million would be paid into that Aow pot, which happened once, and that was later also transferred to the General Resources pot, thanks to all governments after Kok. It was true and it is true, the Aow is a pay-as-you-go system, my grandmother received Aow and didn't understand anything about it, she had never paid for it. The pay-as-you-go system was a method of immediately proceeding to payment of Aow. At the time, it would have been better for Drees and associates to base pensions on the capital system, as is the case with pension providers and insurers. Now that that has not happened, we are stuck with the pay-as-you-go system, which in itself need not be wrong.
I paid 65+ for my grandmother, grandfather, father and mother, now my children pay and later my grandchildren, conversion to a capital system would be my preference, but that is difficult politics.
Nico B
ps By the way, FYI. The cumulative arrears price index of my private pension has been 1% since January 2012, 3,6. Who can say with a dry eye that pensioners do not lose anything?
You see something wrong.
Future generations have no claim whatsoever on the pension pots.
That money belongs exclusively to those who have a right to the money contained in those funds at NOW.
All the money in those pots has been raised from premiums, to which future generations have not yet contributed a penny.
The only thing you could call a claim of future generations is the potential tax payment, of the money that is paid out.
What condescension and what condescension from someone who watches with dismay that pensioners spend THEIR money outside Europe. The Europe that has made a financial mess of it. According to Pieter Omzigt (CDA), Dutch pension funds have lost 100 to 200 billion euros due to low interest rates. Apparently the elderly have to suffer for this mismanagement, in favor of younger generations who have no idea of what is happening.
Also read: http://www.volkskrant.nl/buitenland/martin-sommer-de-waarheid-over-de-euro-is-dat-geen-stem-waard~a4445013/
Wow, Gringo, what a huge increase. Converted at a rate of 37,40 (today 8/1/17), that is 0,03677 baht per month. Congratulations and I would say: light up another cigar. I'm coming in May so I'll bring you cigars again.
Gringo,
Then you can still have the end-of-year drink for the readers of this blog.
We come with three people.
Readers of this blog are always welcome in Megabreak in Soi Diana. Come in the evening and I will indeed offer you a drink!
Bart,
I have received a message from the ABP that the pension will (probably) not be reduced in 2017 ??
indeed the SVB also gives me no less than € 2,00 more per month, or in other words Baht 900 per year. A real fat pot.
Boss above boss. I receive 7 euros more AOW per month. Nice right
AOW is not a (private) pension, but a state benefit for loss of maintenance in old age. Is 100% dependent on state decisions, so tax levies. Will pass the 2nd and 1st Chamber tomorrow, which will be related to the cost of living in the country of residence, with moreover 0 if you live outside the EU, so the benefit money will no longer benefit expenditure in the Euro zone, are you the next day with nothing.
So think of a parliamentary majority to squeeze AOW Turkey and Moroccan, and you can have fun in LOS
Would like to add that if there ever were to be a turnaround and the pay-as-you-go system would be phased out, then there will be a very long-term transitional arrangement that respects existing situations and rights, if not, it will be the political suicide of the current political parties.
Nico B
AOW pension is what the SVB, the administrator, calls it. So it's really called retirement.
And the judiciary has and will protect any infringement of accrued state pension rights. At most, the government can phase it out over the long term, 50 years, if it wishes otherwise. After all, an acquired right is a right and therefore cannot be taken away. Easy
You are wrong.
The accrual of the AOW ran from 15 years to 65 years.
This has been adjusted by the government to from 17 to 67.
In addition, the expats who did not yet receive state pension and who left the country before the age of 67 have been deprived of 2 years of state pension accrual.
That seems to me to be a serious violation of acquired rights.
AOW is not actually a real pension, although it is called that.
AOW is a national retirement provision and lacks many features that a pension does have:
No transfer to the surviving dependent (is a different national insurance scheme)
No commutation possible (with small pensions yes)
No payment depending on deposited funds (with pension yes)
No high-low possible (usually possible with retirement)
Benefit depending on cohabitation situation (not with pension)
Payment is fixed (in the case of retirement, the index may be absent or you may be cut)
What does agree: it stops at death........
But feel free to call it pension; “what's in a name” someone once said….
Yet another extra cigar a year Gringo!
extra cigar for me from the SVB box
I'm going to get € 11 more state pension
you see – the smartest come out on top
You can be very happy with that, I received a letter from my pension fund this fall (the only one I'm with, the few euros from my previous employer have been transferred). It stated that I have to do about the same amount per year if I continue to work until I turn 67. That will undoubtedly be 70 years by the time I am allowed to stop working. And I wouldn't be surprised if the AOW were also shortened further, even more for outside the EU, because the underbelly voter here will think of "those Turks and Moroccans with a closet from their house of our enjoy tax money”, so I wouldn't be surprised if this law - with the support of the gut voters - ever becomes applicable with a 50% discount on your state pension if you move to Thailand ...
Even if the AOW still exists by then (2 working for 1 elderly person in 2050-2060?), little will remain. Emigration to Thailand therefore seems unlikely. So rightly hang out the flag. I wish you, laugh, enjoy and be happy! 🙂
If you are not yet 40, according to the current prognosis of life expectancy, you can indeed continue to work until you are 70. According to the same current forecasts, the state pension age will eventually rise to 71 years and 6 months. If life expectancy continues to rise, the state pension age will also rise. It is strange that the politicians are so loud at the recent increase of 3 months. They themselves passed the law that regulates this, only they forgot to calculate what the consequences were. That's why I did that myself two years ago. If you want to know when you will receive state pension, you can read it in my blog at https://www.2xplain.nl/blog/Na-1-april-38-geworden-dan-mag-u-tot-uw-70e-doorwerken. Note: this was written in 2015. In the spreadsheet that you can download at the bottom of the blog, look for the year in which you turn 65 in the left column. You can then read your AOW age in the right column. The calculation is based on current forecasts. So this can still change.
It can never be the case that the Dutch government simply withholds 50% from your AOW benefit
The Netherlands is bound by international treaty law plus EU rules and principles of the AWB, not to mention its own constitution
For example, the Netherlands had to pay the victims of the war with retroactive effect from the Central Council of Appeal
in indonesia ( ned.indie ) pay in euros and not in the devalued rupiah
We are dealing here with the country of residence principle, equality principle and discrimination
I would like to say this to the people who are afraid that the AOW will be cut by 50% if they live abroad So just sleep well I would say
How spoiled we are with our pension. It's just a pity that everything is going up, which will put you in a negative position again.
My good Thai friend (78 years old) only gets 750 baht per month and that is no less than 50% more than a few years ago. So he has to get by with 25 baht a day. Fortunately, he has three children who support him as needed.
Oddly enough, those Swiss Life commercials never take place in Pattaya. Is our second hometown, as I may call it, too vulgar for that because of its bad reputation with regard to women? After all, the Swiss livers are prosperous and of a certain class. Personally, I keep putting off quitting work. Never thought that until I was 67…….Every year I think: I'll stop. Is it that time: yet another year through. The numbers are not entirely convincing, however. Moreover: what financial disasters caused by in-laws still hang over our heads? Wish Gringo good luck with the pension increase granted to him. I'm GOING ON!