Pension benefits: these are your options
Your BeFrank pension consists of two parts: the contribution you have paid in and the return from your investments. Together, these two parts form the total value of your investments. You will use the final amount to buy pension benefits. This page explains your pension benefits options.
You will use the pension you have accrued to buy pension benefits later. Good to know: you cannot buy pension benefits from BeFrank – only the accumulation phase happens through us. You select which pension insurer you want to buy your pension benefits from.
The amount of your pension benefits is based on various factors, including:
- the amount of your pension investments;
- your age;
- your partner’s age;
- the interest rate.
We will calculate your expected pension benefits using the Uniform Calculation Method (URM). This is the calculation method prescribed by De Nederlandsche Bank (DNB).
You have several options for your pension benefits:
Fixed pension benefits
Fixed benefits means the same amount is paid into your account each month. Once you have reached your retirement age, you will stop investing. As a result, you will not run the risk of your pension amount falling. At the same time, there is also no chance that your pension amount will rise.
Important: your benefit amount is fixed, but the fair value may fall due to price increases (inflation).
Variable pension benefits
With variable pension benefits, we will continue to invest some or all of your pension capital after your retirement date. As a result, your pension amount may rise. However, you also run a greater risk of a lower pension. This part of your pension may therefore go up or down each year.
If you opt for variable pension benefits, your pension benefits will be less dependent on the market interest rate at a certain point in time.
Part-time pension
Don’t want to fully retire yet? Want to continue working part time? Or want to receive your pension and continue working at the same time? No problem! With a part-time pension, you receive partial pension benefits. The value of your pension investments will fall, but you will also continue to accrue pension on the salary you receive.
You can choose to have your pension paid out in one of two ways:
- You sell several of your investments at the same time. This means you buy pension benefits from various insurance companies.
- You sell some of your investments now and some at a later date. This means you buy your pension benefits in two parts, for example when you reach your State Pension Age and again when you turn 70.
We want to know about your decision three months before your preferred effective date.
Retiring earlier or later
If you stop working before you reach your retirement date, your employer will also stop paying pension contributions. This means we will no longer buy new investments. You will purchase pension benefits using the value of your investments.
On the other hand, if you want to continue working beyond your official retirement date, you can defer your pension until no later than five years after your statutory State Pension Age. Your employer will, however, stop paying pension contributions at some point. Your pension regulations will specify which year that is.
On your personal pension page, you can see how your pension will be affected if you stop working earlier or later.
You will receive a letter from us seven months before you retire. You will then have some time to think about your options. Approximately three months before your preferred effective, you need to tell us which choices you have made.
Higher or lower pension
Want to receive a higher amount in the first few years after you have reached your retirement age, and then a slightly lower amount after that? No problem! We call that a high-low pension. You receive a higher pension during the first five years, for example. After that, the amount of your pension benefits will be slightly lower.
You can also choose the reverse: a low-high pension, where you begin with a lower pension amount. After that, your pension benefits will increase. You can select the period yourself.
If you want your retirement pension to vary in amount, you should communicate that to the insurance company where you buy your pension benefits. We always recommend getting proper advice from a financial advisor.