Pensioen. Value transfer upon employment

Transcription

1 Uw Pensioen Value transfer upon employment

2 Please note that the information in this brochure is general, indicative and subject to change. The data provided were accurate at the time of print and serve as general information to pension scheme members. Please note that use of the information in this brochure is entirely for the user's risk. Neither TKP, nor the pension fund can be held liable for any damage that is the result of inaccuracies in the information, or for damage caused by the use, reliance on, or dissemination of this information. No rights may be derived from pension regulations other than those applicable to the member. 2

3 Introduction As a new employee of a General Electric company, you will join its pension fund, GE Pensioen. A new job often means a new pension administrator and now is a good time to take a closer look at your pension. This brochure sets out the various options for transferring to GE Pensioen any pension entitlements you accrued with previous employers. GE Pensioen is the pension fund for the employees of GE companies that have joined the fund. The pension fund arranges for pension payments and manages pension entitlements and pension rights of employees and former employees of General Electric. Meer informatie? If you have any questions after reading this brochure, please do not hesitate to contact us on telephone number You can also contact us by at gepensioen@tkppensioen.nl. 3

4 Table of contents 1. Value transfer: what and why Why value transfer? When can I transfer this value? What happens if I transfer value? GE Pensioen policy on premium allotment Current GE employees Deferred members and pensioners 7 2. What you need to take into account when deciding on value transfer Commencement date of your pension 2.2 Financial considerations 2.3 Partner pension Practical advantages 9 3. How does value transfer work? Your retirement pension 3.2 Accrued partner pension becomes retirement pension Value transfer after divorce How do I arrange the value transfer? Request transfer within six months Complete application form Sign offer Conditional amounts in offer Your partner co-signs The value transfer step-by-step If you do not opt for value transfer More information 15 4

5 1. Value transfer: what and why When you join General Electric from another employer, you can bring the pension rights you accrued with your previous pension administrator(s) with you. 1 If you leave General Electric, you can take the pension rights you accrued with GE Pensioen to your next pension administrator. Transferring accrued pension entitlements from one pension administrator to another is referred to as value transfer. 1.1 Why value transfer? If you change employers, you change pension funds. This change may interfere with your pension accrual, possibly affecting what you will receive as pension. You may even lose accrued rights. You can prevent or minimise any losses by transferring your accrued pension to the pension administrator of your new employer. The value transfer gives you extra pension entitlements with the new administrator. The pension rights you transfer to your new administrator fall under the guidelines of the pension scheme where you continue to accrue pension. When you change employers, you may transfer all pension rights you accrued with all of your previous employer s pension administrators. If you worked for several employers and did not always transfer your pension when you changed employers, you may still do so when you change jobs. Without value transfer, any pension you accrued in your previous job remains with your previous pension administrator. This pension will be paid when you reach your retirement age according to your previous pension scheme. 1) For the transfer of pensions for which accrual was stopped before 8 July 1994, there is no statutory right to value transfer 5

6 1.2 When can I transfer this value? You have the right to transfer your pension entitlements to the pension fund of your current employer. This is subject to the following conditions: - The value transfer must be used to purchase pension with the pension administrator of your new employer; - The transfer value must be transferred directly to the pension administrator (you never have access to the money); - The value must be transferred to another, recognised pension administrator (pension fund or insurance company); - You must apply for value transfer within six months after joining the new pension scheme. 1.3 What happens if I transfer value? Upon a value transfer to GE Pensioen, the value of your old pension entitlements is converted into entitlements to retirement pension of equal value with GE Pensioen. While the transfer will not alter the value of your pension, the form may be different, as no two pension schemes are the same. 1.4 GE Pensioen premium allotment policy Premium allotment (indexation) will protect pension payments against the effects of inflation to ensure that in a few years time your pension will buy you the same as your income does now. Premium allotment is often based on wage or price developments. GE Pensioen distinguishes between current GE employees on the one hand, and deferred members and pensioners on the other Current GE employees Following the value transfer of your pension to GE Pensioen, and while you are a current GE employee, the accrued entitlements are increased annually by the rate of wage development. This is based on developments in the wages per hour as set out in the Statistics Netherlands Collective Labour Agreement, including special remunerations for private companies, applicable for the period that runs from 1 October of the previous year up to and including 30 September of the year in which the increases take place. The premium allotment for current GE Pensioen members is unconditional 6

7 and is financed from premiums. This means that the allotment to be granted does not depend on the fund s financial resources and that the fund grants the allotment every year Deferred members and pensioners The Board may decide annually to increase the paid-up entitlements of deferred members and the commenced pension entitlements by the consumer price index for all households. This applies to the period that runs from 1 October of the previous year up to and including 30 September of the year in which the increases takes place. The premium allotment for deferred members and pensioners is conditional, depending on the fund s resources, and is financed from premiums. The pension fund has not reserved any money for future increases. While you are a deferred member or pensioner, you may assume that the increase in your accrued pension will follow the consumer price index as closely as possible over the next few years. However, you cannot rely on any allotment you received to make any future claims. Every year the Pension Board will decide if the pension fund s financial resources are adequate. 7

8 2. What to take into account when deciding on value transfer When asking yourself if you should transfer the value of your pension, there are a number of factors to take into account, such as: Commencement date of your pension; Financial considerations; Partner pension; Practical considerations. In this chapter we will explain this further. 2.1 Commencement date of your pension The standard commencement date of your pension at General Electric is 67. The pension scheme offers an opportunity to take early or late retirement. If you take early retirement, your pension payments will be lower. If you take late retirement, your pension payments will be higher than on the standard pension date. Also, the pension scheme offers you an option to receive a higher payment for the first years of your pension (up to 10 years), followed by a lower payment. If you decide you want to transfer your pension entitlements, you will receive pension entitlements governed by the GE Pensioen pension scheme. Therefore, the above choices also apply to transferred pension entitlements. 2.2 Financial considerations Paragraph 1.4 set out how GE Pensioen deals with premium allotment (increase) of your pension entitlements. If your previous pension administrator had no or a less favourable policy on premium allotment than GE Pensioen, it is worth transferring the value of the pension you have already accrued. If the pension administrator of your previous employer had a better policy on premium allotment than GE Pensioen, then it may be wise not to transfer the value. Premium allotment relies on, for instance, wage or price index, or if the fund aims to grant full or partial premium allotment. But also whether or not the pension will actually grant premium allotment. You can check if the fund has 8

9 submitted a recovery plan, and if premium allotment is granted during such a recovery plan period, and the cover ratio. Finally, an important consideration is whether or not a fund increases pensions conditionally or unconditionally. If you are in doubt, you can contact the pension funds for more information about premium allotment. Most pension funds will struggle to actually grant premium allotment. If they do, the amount depends on their cover ratio. The cover ratio is a pension term for the fund s financial position: the extent to which a fund has sufficient capacity to meet its financial obligations. In addition to the policy on premium allotment, the financial position of the pension fund is important. If you took part in a defined contribution scheme with your previous pension administrator, this means you did not have pension entitlements, but rather a pot of money that was invested for you. To limit the risk of value variations of the investments, you may decide to transfer the value of the investments to GE Pensioen. After the value of the investments has been established, it is converted into a pension entitlement. You then no longer run an investment risk. 2.3 Partner pension The partner pension is a risk-based insurance while you are an active General Electric employee. This means that when you die while you are employed by General Electric, your partner will receive a partner pension provided that he or she is registered with the pension fund and meets the conditions. Upon termination of your current membership and on your retirement date you can convert part of the retirement pension into a partner pension. The size of the partner pension is based on 70% of the retirement pension to be achieved on the retirement date. If value is transferred, partner pension is allocated to entitlements to retirement pension from the value transfer. 2.4 Practical advantages Transferring your pension value not only has financial, but practical advantages too: your pension will be paid by a single administrator. And that just keeps things simple. 9

10 3. How does value transfer work? To be able to pay your pension, your former pension administrator has reserved a pension sum for you. This may be comprised of various types of pension, such as a retirement pension and a partner pension. If you transfer the value of your pension, there are a number of options for these various pensions. Below we will explain how this works. We will also look at how your pension will be affected by divorce. 3.1 Your retirement pension When you apply for a value transfer, GE Pensioen is informed by your previous pension administrator(s) about the size of the transfer value. Based on this value, GE Pensioen will calculate the size of the entitlements to retirement pension to be purchased from the pension fund. You will receive an offer for this. The law stipulates that on an actuarial basis the value to be purchased for pension entitlements with the new pension administrator must equal or exceed the purchased value of the pension entitlements with the former administrator. In short: the value remains the same. However, your pension entitlements will not necessarily remain the same as the pension schemes may differ. They may stipulate a different retirement date for instance. 3.2 Accrued partner pension becomes retirement pension If you accrued a partner pension with your previous employer, its value is used to purchase (extra) retirement pension upon transfer of the value. During your employment, GE Pensioen will cover for the partner pension. This partner pension is derived from the retirement pension to be achieved until the retirement date. In establishing this partner pension, account is also taken of the extra retirement pension you acquired following the value transfer. Incidentally, it is possible to leave the partner pension with your previous pension administrator. The offer you will receive will also explore this option. If you leave GE, or if you retire, part of the retirement pension is normally converted into a partner pension. If you leave the company or retire, you have the right to cancel the conversion, provided you have the written consent from your partner. 10

11 3.3 Value transfer after divorce A divorce will also affect your pension. A partner pension for your ex-partner will in principle remain with your previous pension administrator. This is the amount accrued during the marriage, registered partnership or unmarried partnership (cohabitation). Only the amount you accrued as partner pension after the divorce qualifies for transfer. If you divorced after 1 May 1995, your ex-partner may also be entitled to payment of part of your retirement pension. This part of the retirement pension is transferred to GE Pensioen. By transferring this sum, our fund will also take over the payment obligation of part of your retirement pension to your ex-partner. 11

12 4. How do I arrange the value transfer? This chapter explains how you can transfer the value of your former pension(s) to GE Pensioen. 4.1 The value transfer step-by-step 1. You must apply for value transfer within six months from joining GE Pensioen. You must do so by using the form sent to you in which you give your approval to exchanging details between the pension administrators. 2. GE Pensioen applies to your previous pension administrator for a transfer value. 3. Your former pension administrator calculates the pension entitlements with that fund as well as the transfer value and sends this information to GE Pensioen. 4. GE Pensioen then calculates the pension entitlements you may acquire after a value transfer with the fund and sends you an offer. 5. You (and your partner) must approve or reject the offer within two months after receipt. Once you have given your approval, the value transfer definitive. You can no longer change it. 6. Following your approval, GE Pensioen requests your previous pension administrator to transfer the value. 7. The former pension administrator transfers the value to GE Pensioen. 8. GE Pensioen converts the transferred value into a pension entitlement. 9. We notify you about the purchased pension entitlements. 4.2 Request transfer within six months If you want to arrange for a value transfer, you must submit a request for value transfer to us within six months of joining GE Pensioen. If we have not received your request for transfer within six months after you joined the company, it is up to the pension administrator to decide if it will collaborate in a value transfer. The statutory procedures for value transfer are bound to strict terms. By applying for a value transfer you give permission to explore the options for value transfer. Each follow-up step in the procedure may last one month, or sometimes two. You must arrange for the value 12

13 transfer within that term. If you do not, you may lose the right to value transfer. It goes without saying that if either one of the pension administrators fails to observe a term, your right to a value transfer will not lapse. Please note that the value transfer procedure may take a long time to complete. 4.3 Complete application form You will receive an application form from us. You must complete and sign this form and return it to us. It is important that you fill in all the details particularly your policy and registration number with your old pension administrator(s) - accurately. By signing the form you authorise GE Pensioen to request all relevant information from your previous pension administrator(s). 4.4 Sign offer GE Pensioen will contact your previous pension administrator(s) and present you with an offer for transfer. This normally takes about four months. If you do not hear from us within those four months we recommend that you contact our pension fund. Based on the offer you can then decide if you wish to transfer the value. If you wish to transfer, you sign the offer for approval and return it to us. This makes the value transfer final. You cannot change it later on. 4.5 Provisional amounts in offer The offer may contain provisional amounts. This is specifically indicated in the offer. This is the case if your previous pension scheme is a defined contribution scheme. The investment risk remains with you, also after you leave the company, unless you transfer the value to GE Pensioen. If you wish to transfer, you sign the offer with the provisional amounts for approval and return it to GE Pensioen. This also makes the value transfer final. You cannot change it later on. 4.6 Your partner co-signs If you are married, or a registered partner, your partner must approve the value transfer for the partner pension. He or she must therefore sign the offer for approval. If your partner does not give his or her consent, only your retirement pension will be transferred. Any accrued partner pension will remain with your former pension fund in that case. 13

14 4.7 If you do not opt for value transfer If you do not opt for value transfer to GE Pensioen, you must inform your former pension fund if you move. This will enable your former pension fund to keep you informed and reach you when the pensions you left with that fund are paid out. Important changes in your personal situation are also relevant. Please inform your former pension administrator when you marry, divorce, start to live with a partner outside of marriage, or have children. Note: value transfer is possible only if both your old and new pension fund have a cover ratio of 100% or more. 14

15 5. More information If you would like more information, go to our website or contact us directly for information about, for instance: - the pension scheme, the annual report or financial statement; - information about the cover ratio of the pension fund; - the short-term or long-term recovery plan; - the applicable complaints scheme. The contact details are printed on the back of this brochure. 15

16 Stichting Pensioenfonds General Electric Nederland Postbus AM Groningen Pensioendesk (050) september 2014