Interest rates and pension adjustments

Interest on the retirement savings capital of active members

The Pension Board has decided to grant additional interest of 3.75% on top of the minimum interest rate of 1.25%. This additional interest has been credited to the retirement savings capital of all active members insured with the Fund as at 31 December 2024. Total interest was therefore 5% for 2024.

Total interest on retirement savings capital has averaged 3.09% over the last five years and 2.46% over the last ten years. This remains higher than the average annual LPP/BVG minimum rate of 1.05% over 5 years and 1.12% over 10 years.

Pension adjustments

The Pension Board is legally obligated to decide each year whether to adjust pensions currently being paid, unless the pension regulations provide for them to be systematically indexed to the cost of living as measured by the consumer price index or the inflation rate. In its deliberations, the Board takes several parameters into account, such as the Fund’s performance during the year, its financial health as evidenced by the funded status, and the equitable treatment of active members and pensioners. Although the Pension Board opted not to adjust pensions in payment on 1 January 2025, a decision was taken to pay a special, one-off lump sum equal to half a monthly pension for 2024.