The indexation for the inactive participants depends on the financial position of the Dutch sections each year. At the beginning of 2018, thanks to the high funding ratios as per the end of 2017, they received a full indexation as well as a catch-up indexation for the previous year. This time, the financial picture was totally different due to the bad investment year 2018. As the funding ratios of the Dutch sections were below the levels at which a (partial) indexation is possible, the Executive Board was forced to refrain from granting indexation.
Possibility for future catch-up indexation
As an indexation as per 1 January 2019 is not possible, the aspired increase is ‘put on the slate’ for possible catch-up indexation. If the financial situation of the sections in the fund improves, a catch-up indexation may be granted in the future for previous years in which there was no or only a partial indexation. This catch-up indexation is then granted in addition to the normal indexation.
The indexation for the Dutch sections is based on the price index that the Central Statistics Office (CBS) publishes in October each year. Within the section DuPont Nederlands, the indexation ambition is 75% of the price index. Within the section Genencor Netherlands, the ambition is 100% of the price index.
In the past year, the CBS price index for all households rose by 2.10%. Therefore, the scope for the catch-up indexation is 1.58% for the section DuPont Netherlands and 2.10% for the section Genencor Netherlands.
Unconditional indexation for active participants
The indexation is unconditional for the active participants of the Dutch sections. The indexation is based on 100% of the CBS wage index for both sections. The wage index increased by 2.0% over the past year. This percentage is granted as of 1 January 2019 to increase the entitlements of the active participants.