Variable Personal Pension Benefit

Characteristics of the variable pension benefit

• We use part of your pension money (‘pension capital’) for your basic component. We use the other part to invest for you: the investment component. The results of the investments may increase your pension benefit. If the results are unfavourable, your benefit may decrease. Interest rate changes and the possible adjustment of the fixed decrease may also influence the level of your benefit. Once a year, we adjust the amount of your benefit. Your benefit may increase or decrease each year.
• We can invest a larger or smaller part of your pension capital for you. Your basic component may be 85%, 70%, 55% or 40% of your pension capital at the start. The rest is your investment component. The larger this investment component, the higher and the lower your benefit may be.
• It is important that you run as much risk as is appropriate to your wishes and circumstances. That is why you determine your risk profile with the risk profiler. This risk profiler indicates how much investment risk you are able and willing to take. Based on your risk profile, we determine which part of your pension capital we will use for your basic component. We will invest for you with the rest of your pension capital.
• Your variable pension benefit is always for life. It does not matter how old you become. If you accrued pension capital for a temporary retirement pension, you cannot use it to buy a variable benefit. However, you can use it to buy a fixed temporary pension benefit.
• You cannot convert your variable pension benefit into a fixed pension benefit at a later date. Your choice to invest part of your pension money is permanent.
• You can buy a partner’s pension in addition to a pension benefit for yourself. Your current partner will then receive a benefit if you die after purchasing your pension benefit. We calculate the level of the partner’s pension on the basis of 70% or 35% of your own pension benefit. In the case of a variable pension benefit, the following applies to the partner’s pension:
  - The level of entitlement to a partner's pension changes every year for as long as you live.
  - In the event of your death, we will pay the partner’s pension to your partner. From that time on, the amount of the benefit is fixed.
  If you choose high-low, we will calculate the level of the partner’s pension as if there were no high-low.

You can read more about how investing with your pension benefits works under the tab 'Investments'.

Partial investment for the likelihood of a higher pension

With the variable personal pension benefit, we invest part of your accrued pension money (‘pension capital’) on your behalf. The results of the investments may increase your pension benefit. If the results are unfavourable, your benefit may decrease. As a result, the amount of your benefit changes every year. We are happy to explain how this works.

Remember: if a variable pension benefit suits you and you select this option, you cannot convert it to a fixed pension benefit later on. Your choice to invest part of your pension money is permanent.

Investment component and basic component

If you buy a variable personal pension benefit, we divide your pension capital into a basic component and an investment component.

• Basic component
  With a certain part of your pension capital, we do not invest for you. This is your basic component. We pay part of your pension benefit (‘the benefit from your basic component’) from your basic component. Results from investments and changes in interest rates do not affect this part of your benefit.
• Investment component
  With the other part of your pension capital, we do invest for you. This is your investment component. From your investment component, we pay the other part of your pension benefit (‘the benefit from your investment component’). This part of your benefit increases or decreases every year. This is because we incorporate the results of the investments and the change in interest rates.

The larger the investment component, the greater your benefit can rise or fall each year. The ratio of your pension capital between the basic component and the investment component at the start depends on how much risk you are able and willing to take.

Your risk profile

It is important that you run as much risk as is appropriate to your wishes and circumstances. That is why you determine your risk profile with the risk profiler. This risk profiler indicates how much investment risk you are able and willing to take. On this basis, we determine the size of the basic component. We use the remainder of your pension capital to invest for you.

There are four risk profiles. At the start, each profile has a ratio of basic component to investment component:

• Defensive (85% basic component, 15% investment component):
  We use the 85% of your pension capital (after deduction of the administration costs) for your basic component. We invest the remainder of your capital to invest for you.
• Neutral (70% basic component, 30% investment component):
  We use the 70% of your pension capital (after deduction of the administration costs) for your basic component. We invest the remainder of your capital to invest for you.
• Offensive (55% basic component, 45% investment component):
  We use the 55% of your pension capital (after deduction of the administration costs) for your basic component. We invest the remainder of your capital to invest for you.
• Very offensive (40% basic component, 60% investment component):
  We use the 40% of your pension capital (after deduction of the administration costs) for your basic component. We invest the remainder of your capital to invest for you.

Likelihood of a higher pension and the risk of investment

Are you buying a variable Personal Pension Benefit? If so, we take into account the expected results of the investments when calculating the benefit from your investment component. That's why we let your pension benefit start higher than in the case of a fixed benefit. We do this by applying a fixed decrease, as we expect your investments to have a positive result. That's why the variable pension benefit starts higher than in the case of a fixed benefit.

Are investment returns as high as we expect, or higher? Then the payout from the investment component could potentially remain the same, or even increase, in the following years. Are the results lower than expected? Then the benefit may decrease. Interest rate changes may also influence the level of your benefit. If the interest rate has risen, this will have a positive effect on the amount of your pension benefit. If the interest rate has fallen, this will have a negative effect on the amount of your pension benefit. We call this the investment risk.

You can read more about how the amount of your pension benefit is determined under the tab ‘Amount’.

The investment fund

Which fund we invest in for you depends on the 'form of investment' you choose. The form of investment is our approach to investing and how we spread risks. There are two forms of investment: Index Tracking and Actively Managed. More about these investment forms and your choice of them can be found under choices.

• Opting for Index Tracking? Then we invest for you in the Index Mix Fund (NL). This fund consists largely of index funds. These funds are comprised of investments with the aim of achieving a return that more or less mirrors the return on a particular index. An index is a collection of financial products, such as the AEX Index or the MSCI World Index. The Index Mix Fund (NL) consists of socially responsible investments.
• Opting for Actively Managed? Then we invest for you in the First Class Return Fund II (NL). For this, asset manager Goldman Sachs chooses investments with which it expects to outperform a particular index. This is called 'active investing', and its costs run a bit higher. The First Class Return Fund II (NL) is a mixed fund with diversified investments. That means it contains different types of investments, such as shares, bonds and real estate. This makes the results less dependent on how a particular asset class performs. The First Class Return Fund II (NL) also consists of socially responsible investments. However, Goldman Sachs selects investments for this fund even more strictly. This is possible because this is an actively managed fund.

You can find more information on the First Class Return Fund II (NL) (ISIN code: ISIN NL0013019243) and the Index Mix Fund (NL) (ISIN code: NL0013089022) on nn.nl/fondsen-ppu (Dutch). Here you can, for example, read more information about the investment policy, the type of investments in the fund, the price and the results of investments in recent months and years. You can also download the Key Investor Information (EBI) here.

Your choices for the variable pension benefit

If a variable pension benefit suits you and you select this option, you will have two choices to further tailor the benefit to your needs.

Retirement date: retiring earlier or later

The pension scheme regulations of your employer include a certain retirement age. If you make no other choice, your pension benefit will start on the first of the month in which you reach this age. In other words, this is the retirement date of your pension scheme. However, you can also choose to retire earlier or later.

Remember: the retirement age in your pension scheme regulations may differ from the age at which you receive the Dutch state pension.

If you prefer to retire later, you can defer your ‘pension capital’. You do not purchase a pension benefit on the retirement date of your pension scheme. You buy the benefit only when you want your pension benefit to start. You do not make the choices for your pension benefit until then. This is how it works:

• You can defer buying your pension benefit until the date on which your state pension starts (if it starts later). After your state pension has started, you can (again) defer buying your pension by a maximum period of one year. Towards the end of that period, we will ask you if you wish to buy your pension benefit or defer it for another year at the most, etc.
  Remember: you can defer the purchase of your pension benefit for up to five years after your state pension has commenced. This is enshrined in law.
• Your pension capital remains with the pension provider of your employer's scheme until you use it to buy a pension benefit. Until then, you may still run investment risk and interest rate risk. The pension provider of your pension scheme can tell you exactly what happens to your pension capital.
• We calculate the amount of your pension benefit only when you buy it, using the interest rate that applies at that time. Between the retirement date of your pension scheme and the time when you buy the benefit, the interest rate may increase or decrease. An increase is positive for the amount of your pension benefit, a decrease is negative.
• All options are still open when you buy the pension benefit. You can then, for example, make choices for a partner's pension. You can also opt for a fixed pension benefit with us not investing for you.
• Remember: on the retirement date of your pension scheme, the partner's pension may automatically end in the event of your death before your retirement date. Check your pension regulations to see what later retirement means for the partner’s pension in the event of your death between the retirement date in the scheme and the time when your pension benefit starts.
• If an orphan’s pension and/or occupational disability pension was insured in your pension scheme before your retirement date, read in your pension regulations what later retirement means for these insurance policies. These insurance policies may end on the retirement date of your pension scheme. If you become occupationally disabled after this date, you will not be entitled to an occupational disability pension. If you die after this date, your children will not receive an orphan's pension.

As long as you have not yet purchased a pension benefit, you can still choose to do so with another pension provider (‘shopping’).

Partner's pension in the event of your death

If you die after your pension benefit has started, your benefit will stop. If you have a partner at that time, he or she may lose income as a result. You therefore purchase a partner's pension by default for your current partner at the same time as you purchase your own pension benefit. Your partner will then receive a lifelong benefit in the event of your death. The partner's pension is a certain percentage of your pension benefit. This is 70% by default.
But you and your partner can also make a choice other than the default option. You can choose to:

• buy a lower partner’s pension. This is 35% of your pension benefit. As a result, your own pension benefit is somewhat higher.
• not to buy a partner’s pension. Your own pension benefit will be higher as a result.

In the case of a variable pension benefit, the following applies to the partner’s pension:

• The level of entitlement to a partner's pension changes every year for as long as you live.
• In the event of your death, we will pay the partner’s pension to your partner. From that time on, the amount of the benefit is fixed.

This is how it works: we adjust the level of your own variable pension benefit each year. We do so based on, for instance, investment returns and movements in interest rates. The entitlement to a partner’s pension is a certain percentage of your benefit. So if your own benefit changes, the entitlement to a partner’s pension also increases or decreases. If you die, the level of the partner’s pension that we have determined for that year will apply. After that, the level remains the same.

If you have a partner, he or she must agree to your choice for a variable pension benefit. Your partner must therefore co-sign the quotation approval. If you do not have a partner, you do not need to purchase a partner’s pension and your own pension benefit will be higher.

A higher benefit for the first years (‘high-low’)

You can choose a variable pension benefit that is higher in the first few years. Thereafter, the benefit will be lower (‘high-low’). You choose how many years you want a higher benefit, between one and ten years. This choice has consequences for the risks you run. Therefore, you cannot make a calculation or request a quotation for this yourself in mijn.nn. For a detailed explanation and a quotation for a variable personal pension benefit with high-low, please contact a financial advisor.

You can read more about the choices you can make for your pension benefit on the page Choices for your pension benefit.

Lump sum on retirement date

Soon you may have a new choice when you retire. You can then receive part of your retirement pension in one go: a ‘lump sum’. With that money, you can do what you want. But if you choose a lump sum, your lifetime pension benefit will be lower. This new option will probably enter into force on 1 January 2023. That depends on when exactly the relevant law is passed.

How does this work exactly and what do you need to consider? And can you opt for a lump sum if you are retiring soon? We tell you all about it on the page Choices concerning your pension benefit.

Variable benefit: form of investment

The form of investment is our approach to investing and how we spread risks. You can choose between two forms of investment:

Index Tracking
With Index Tracking, we invest for you in the Index Mix Fund (NL). This fund consists largely of index funds. These funds are comprised of investments with the aim of achieving a return that more or less mirrors the return on a particular index. An index is a collection of financial products, such as the AEX Index or the MSCI World Index.

The Index Tracking investment form may well suit you if:

• you don't want your investment results to deviate too much from a particular index.
• you opt for simplicity and lower costs.
• you want us to invest in a socially responsible way for you, but you do not think it necessary for asset manager Goldman Sachs to select the funds even more strictly on this. Moreover, you want socially responsible investing to have little effect on the performance of your investments, and you don't want to pay extra fees for this.

The Index Tracking investment form will probably not suit you if:

• you are convinced that Goldman Sachs can achieve a better result than a given index with active management.
• you find socially responsible investing very important.

Actively Managed
With Actively Managed, we invest for you in the First Class Return Fund II (NL). For this, asset manager Goldman Sachs chooses investments with which it expects to outperform a particular index. This is called 'active investing', and its costs run a bit higher. The First Class Return Fund II (NL) is a mixed fund with diversified investments. That means it contains different types of investments, such as shares, bonds and real estate.

The Actively Managed investment form may well suit you if:

• you are convinced that asset manager Goldman Sachs can achieve a better investment result than a given index with active management based on knowledge and experience.
• you accept that due to active management, results may deviate positively or negatively from the index.
• you don't mind the costs being a bit higher for active management.
• you consider socially responsible investing very important and want Goldman Sachs to select funds extra strictly on this. And you don't mind that this may have an effect on investment results.

The Actively Managed investment form will probably not suit you if:

• you don't want to be surprised by results of investments that deviate from a certain index.
• you opt for simplicity and somewhat lower costs.

Matching investments
Have you accrued your pension money with Nationale-Nederlanden in one of these two investment forms? Then you can have it invested using the same form of investment after your retirement date. That way, you pay the lowest possible fees for buying and selling investments.

Risks of your variable pension benefit

After you buy your variable pension benefit, you run some risks.

Investment risk

We invest the investment component of your pension money (‘pension capital’) for you. We expect you to have a certain result from the investments. We therefore have your variable pension benefit start higher than a fixed pension benefit. Is the result better than we expected, your pension benefit may increase. If the investments perform less well, your pension benefit may decrease. This is the investment risk.
The investment fund contains foreign investments listed in other currencies. As a result, changes in the value of these currencies against the euro may affect your investments.
Every year we recalculate the benefit from the investment component. We incorporate the results of your investments.

Interest rate risk

When we recalculate the benefit from your investment component each year, we also include the rise or fall of the interest rate in the past year. If the interest rate has risen, this has a positive impact on the benefit from your investment component. If the interest rate has fallen, this has a negative impact.

Inflation risk

Normally, prices rise slowly in the Netherlands. This is known as inflation. It means that in five years’ time, you will be able to buy less for € 100 than you can today. So in five years’ time, you will need more money to buy the same thing: your purchasing power will decrease. If your pension benefit increases due to changes in interest rates and the results of your investments, you suffer less or no impact from this inflation risk. If your benefit decreases, your purchasing power will be reduced even more.

The amount of your variable pension benefit

We pay your variable pension benefit partly from your basic component and partly from your investment component. Subsequently, we recalculate the amount of the benefit from your investment component every year.

Benefit from your basic component

We pay part of your pension benefit from your basic component (‘the benefit from your basic component’). We calculate this when you buy the benefit, based on, for instance:

• Your choice of partner’s pension, which is described under the ‘Choices’ tab.
• Your pension capital and which part of it we use for your basic component.
• The interest rate. We calculate the benefit from your basic component with the current interest rate. This is the interest rate that applies at the time we make your quotation. The higher the interest rate, the higher your benefit. The interest we use to calculate is based on the market interest rate published by the Dutch central bank.
• The rate: when calculating your variable pension benefit, we are obliged to use certain rates to avoid unequal treatment between men and women. A rate can be gender neutral (the same for men and women), gender dependent (different for men and women) or a combination of the two. Which rate we use depends on the pension scheme via your employer.
  When determining the rate, we also take into account the life expectancy of the average Dutch person on your retirement date. The Dutch are probably going to live longer on average. Consequently, the pension money has to be divided over more and more years. The higher the average life expectancy on your retirement date, the lower your pension benefit.
• The costs and possible premiums: you can read more about this under the tab ‘Costs’.

Do interest rates and average life expectancy change after you buy your pension? This no longer affects the amount of the benefit from your basic component.

Benefit from your investment component

We pay part of your pension benefit from your investment component (‘benefit from your investment component’). In the first year, we calculate the benefit from your investment component as well as the benefit from your basic component based on several factors: your choices, your pension capital, the interest rate, average life expectancy, partner’s pension and costs.

Moreover, we also calculate the benefit from your investment component with a fixed decrease. The amount of the established decrease must comply with the law. We check this every year. Only if necessary do we adjust the level of the decrease.

Every year, we recalculate the amount of the benefit from your investment component. We do this on the basis of:

• The value of your investment component at that time. This value depends on, for instance, the price of the investments, the costs you pay from that investment component and the life bonus (see below);
• Current interest rates;
• A steady decrease.

Are investment returns as high as we expect, or higher? Then the payout from the investment component could potentially remain the same, or even increase, in the following years. Are the results lower than expected? Then the benefit may decrease. Interest rate changes may also influence the level of your benefit. If the interest rate has risen, this will have a positive effect on the amount of your pension benefit. If the interest rate has fallen, this will have a negative effect on the amount of your pension benefit. We call this the investment risk.

In the calculation, we always use the average life expectancy in the Netherlands that applied when you bought your pension. Has the average life expectancy changed since you bought the benefit? This then no longer affects the amount of the benefit from your investment component.

This document explains the annual changes to the variable pension benefit:

• Jaarlijkse wijziging van de variabele pensioenuitkering (0,6 mb)

Life bonus
As long as you live, we will add a monthly amount to your investment component and buy investments for that purpose. This is known as the ‘life bonus’. You receive this because we do not pay out the value of investment components of other people with a personal pension benefit after they die. This allows us to add value to the investment component of your variable pension benefit. The level of the bonus will depend, for instance, on your age, the amount of your pension capital and the average life expectancy.

Partner’s pension
We calculate the level of the partner’s pension on the basis of 70% or 35% of your own pension benefit. If you choose high-low, we will calculate the level of the partner’s pension as if there were no high-low. The entitlement to a partner’s pension therefore moves in line with the results of the investments and changes in interest rates each year.

Tax and premiums

We calculate your pension benefit (and the partner’s pension) gross. But we pay your benefit net. This is because when you retire, we are legally obliged to withhold wage tax from your gross benefit. In addition to wage tax, we also deduct the income-related contribution for the Dutch Healthcare Insurance Act from your gross benefit. The deductions do not take into account the wage tax deduction.

More information

You will find more information about the calculation method and various example calculations in the appendix to the quotation.

What you pay for your variable pension benefit

You pay various costs and possibly premiums for your variable pension benefit.

Administration fees

We charge administration fees for our services. These include the monthly payment of your pension and the costs we incur to inform you about your pension benefit.
We deduct one-off administration fees from your pension capital. So you will never have to pay these costs again. From the amount that remains, we calculate the amount of your variable pension benefit.

Costs for your investment component

We invest part of your pension capital for you. This means that there are charges for the management of the investment funds and for transactions with the investment funds. These costs influence the amount of your investment value and therefore your variable pension benefit. The costs of investing consist of:

• management fees;
• running costs;
• entry and exit charges.

Costs of earmarking funds

We are obliged to keep sufficient money (‘reserves’) to pay your pension benefits as long as you live. ‘Cost of earmarking funds’ is a fee you pay for the money we have to reserve for this purpose. For the investment component, we settle these costs each month by selling investments.

Risk-based insurance premium for partner’s pension

If you are buying a partner's pension for your current partner, you buy a part of that partner's pension from your basic component at the same time as your own pension benefit. For the other part of the partner's pension (which is part of your investment component), you pay a risk premium. We settle this risk premium monthly with your investment component by selling investments.

More information

You can find the exact costs and possible premiums for the variable pension benefit based on your choices in the appendix to the quotation.

Variable Personal Pension Benefit

Sustainability information
If you opt for a Variable Personal Pension Benefit, you can choose the investment forms Actively Managed and Index Tracking. With the Actively Managed investment form, we invest for you in the First Class Return Fund II (NL)-I and with the Index Tracking investment form, we invest for you in the Index Mix Fund (NL)-I.

The investment forms Actively Managed and Index Tracking promote environmental and/or social characteristics, as described in article 8 of the SFDR. You can read more about this in the PDF files below.

• Sustainability information Actively Managed (0,3 mb)
• Sustainability information Index Tracking (0,2 mb)

You can find more information about the SFDR nn.nl/beleggingsbeleid-pensioen (in Dutch). In the longer term, we expect responsible investment to make a positive contribution to the result achieved.