Until now, the year 2020 has been a special year in many respects. LifeSight has been busy this year and has implemented some additions to the participant portal (MijnLifeSight). In this message we inform you about these additions and other developments at LifeSight. This concerns the following subjects:
Uniform Calculation Method (URM) on MijnLifeSight
The Uniform Calculation Methodology (URM) was introduced by the Dutch government at the end of 2019. All pension providers are obliged to base the expected pension incomes on mijnpensioenoverzicht.nl and on the annual Uniform Pension Overview on this method. This method entails calculating with 2,000 scenarios for the (development of) price inflation, the returns on your investments and the interest rates. The scenarios can be adjusted quarterly and are published by De Nederlandsche Bank (DNB). Based on the 2,000 scenarios, three possible pension outcomes are shown: an expected outcome, an optimistic outcome (good weather scenario) and a pessimistic outcome (bad weather scenario).
On MijnLifeSight, your pension outcomes have been based on 2,000 scenarios since 2017. We also already showed an expected outcome, an optimistic outcome and a pessimistic outcome on MijnLifeSight based on these scenarios. This is called the LifeSight method on the portal. With this method, LifeSight was actually already ahead of the legal method.
Recently, on MijnLifeSight you can also choose the legal method (URM) for showing your pension outcomes in addition to the LifeSight method. Although both methods calculate with 2,000 scenarios and are similar on this part, there are also some differences. These differences are explained in the table below.
Table: Differences between legal method and LifeSight method on MijnLifeSight
|The pension income is calculated based on:||MijnLifeSight – legal method (URM)||MijnLifeSight – LifeSight method|
|Scenario sets for price inflation, returns and interest rates||DNB set||LifeSight-set|
With more distinction in investment categories than in the DNB set
|The calculation date||Actual: The moment you log in, the calculation is made||Actual: The moment you log in, the calculation is made|
|Taking into account price inflation up to your retirement date (during the accrual phase)||Yes||Yes|
|Taking into account price inflation after your retirement date (during the payment phase)||No||Standard yes: indexed pension|
No, possible as option: nominal pension
|Tax taken into account||Yes||Yes|
|Taking into account an increase in wages||Yes, based on price inflation||Yes, based on wage inflation plus an assumed average career increase|
For more information about the different settings (LifeSight method or legal method) you can also visit MijnLifeSight.nl via your PC, laptop or tablet. Click for more information on the question mark in the box “Current view”.
Uniform Pension Overview 2020 (UPO)
You are receiving your Uniform Pension Overview UPO) from us every year. In August or September 2020 you received your UPO 2020. A few things in the UPO 2020 are new or changed compared to the UPO in previous years. Below is an overview of the most important changes:
The UPO 2020 is based on the URM calculation method for your expected pension outcomes. This method uses 2,000 scenarios for the (development of) price inflation, the returns on your investments and the interest rates;
In the UPO 2020 there is a new section “What if there are windfalls or setbacks?” added. Based on the URM scenario set, in addition to the expected pension on your retirement date, the pension on your retirement date is also shown in a pessimistic scenario and an optimistic scenario;
On the UPO 2020, the “Your personal data” section now also explicitly shows any voluntary structural additional savings.
Although pension outcomes are (or can) be shown on the UPO and on MijnLifeSight based on the legal method (URM), you will still see differences between the outcomes. The causes of these differences are explained in the table below:
Table: Differences between outcomes on UPO and on MijnLifeSight
|The pension income is calculated based on:||UPO-part |
“What can you expect in terms of pension?”
“What if there are windfalls or setbacks?”
|MijnLifeSight – legal method (URM)|
|Scenario sets for price inflation, returns and interest rates||DNB set||DNB set||DNB set|
|The calculation date||1-1-2020||1-1-2020||Actual: The moment you log in, the calculation is made|
|Taking into account price inflation up to your retirement date (during the accrual phase)||No||Yes||Yes|
|Taking into account price inflation after your retirement date (during the payment phase)||No||No||No|
|Tax taken into account||No||No||Yes|
|Taking into account an increase in wages||No||Yes, based on price inflation||Yes, based on price inflation|
Forecast pension capital
In your employer’s pension scheme you build up a pension capital during your employment. On your retirement date you can convert this capital into a lifelong pension payment with an insurer of your choice. To give you more insight into the expected level of your pension capital on your retirement date, a new tab has been added to MijnLifeSight on the page “My investments”: “Forecast pension capital”. On this tab you can find more information about the expected level of your pension capital on your retirement date in two situations:
Capital on retirement date including return:
Here we show the forecast of your pension capital, assuming that no more contributions will be deposited. We will continue to invest the capital for you. The amount of capital you see therefore depends on the return you achieve;
Capital on your retirement date if you continue to work until your retirement date:
Here we show the forecast of your pension capital if contributions are invested up to your retirement date. We invest the capital and the contributions. The amount of capital that you see therefore depends on the return you achieve and the expected future contributions that will be paid.
Determination risk profile
In your employer’s pension scheme you accrue pension capital during your employment. This pension capital is invested. LifeSight does this on the basis of the Smart Standard. The Smart Standard takes into account the risk that you are expected to be able and willing to run with your investments for your pension at LifeSight, based on your age and salary.
In order to make your investments (even) better suited to your personal situation, you can make adjustments to your investments. We call this Smart Investing. First of all, you can determine what your risk profile is. You can do this by completing a questionnaire on MijnLifeSight.nl via your PC, laptop or tablet on the “My investments” page under the “Current investment mix” tab.
After you have completed the questionnaire, we compare your personal risk profile with the profile of your investments (investment profile). If your personal risk profile does not match your investment profile, we propose a different investment mix. The investment profile of this mix matches your risk profile. You can accept or reject this proposal to change your investments. If you reject this proposal, you will continue to invest based on your current investment mix.
On MijnLifeSight you have the option to view the return on your pension capital. We show this return per year that you participated in the LifeSight pension scheme. You can find the return on MijnLifeSight.nl via your PC, laptop or tablet on the page “My investments” on the tab “Return”.
A graph is visible here showing the annual return that you have achieved on your pension capital. If you have several accounts with pension capital – for example, a gross pension scheme with an additional savings scheme – you will see the return per account. The return per account can vary. You can see the graph of returns for each account by selecting the desired account.
The returns shown are so-called “Money Weighted Returns”. You can find an explanation of what this means on MijnLifeSight.
If your employer has selected this option from LifeSight, a new investment option is available. This option offers you more certainty about the level of your expected retirement income. We call this option the Pension Stabiliser.
The Pension Stabiliser is an investment option with the aim of gaining more certainty about your expected income for later. In the Smart Standard and with Smart Investing you invest in three LifeSight funds: the LifeSight Rendement fund, the LifeSight Matching Lang fund and the LifeSight Matching Kort fund. If you opt for the Pension Stabiliser we will no longer invest in the Rendement fund. You will only invest in the Matching funds. By investing in the Matching funds we are trying to follow the insurer’s rate and the inflation as much as possible. We cannot guarantee this, but you will have good protection.
You can opt for the Pension Stabiliser at any time. And you can also switch back from the Pension Stabiliser to Smart Investing at any time. So you have flexibility to determine when extra security is desired and when not.
The Pension Stabiliser can be interesting if:
- you have accrued enough pension and you want more certainty about the level and purchasing power of your income when you retire (soon);
- you do not want to be affected by falling stock prices for a (limited) period.
If you opt for the Pension Stabiliser, this applies to your entire pension capital.
If your employer has selected this option from LifeSight, you can opt for the Pension Stabiliser via MijnLifeSight.nl via your PC, laptop or tablet. To do this, go to “Pension Planner” and go through the menu until you reach “Expected income” and then select “Which choices do you have?”
Profit sharing 2019
LifeSight sets aside the pension capital that cannot be paid out – because of fiscal regulations – to partners and / or children in the event of the death of participants. From 2019, we annually assess whether the amount of this separated capital is high enough to be paid out to the participants of LifeSight. If this is the case, you receive an extra deposit in your pension capital. We call this profit sharing. We use a threshold for profit sharing that the separated capital must be at least equal to 0.25% of the total pension capital of all participants.
This threshold value was not reached for both the gross pension plans and the net pension plans at the end of 2019. This means that no profit sharing will be paid out for 2019. That is why you will not receive an extra deposit. The capital will be kept separate and will be included in the determination of the profit sharing next year.