Investment risk

Ten years before your retirement age you must make a choice: until you retire you can phase out the investment risk either partially or completely. The partial phasing out of risk is suitable for a so-called variable pension. A complete phasing out of risk is suitable for a fixed pension.

When you retire you have a choice of a fixed pension or a variable pension.

A fixed (stable) pension pays you the same amount of pension each year.
With a variable pension you use some of your capital to purchase a pension for a given period of time, while the remaining capital continues to be invested. In this way investment results may provide you with a higher pension after retirement. Nor are you any longer entirely dependent on the market rate at any one time. (If this rate is low, you will also receive a low pension.) There are no guarantees however that investments and interest rate will produce a positive outcome in the case of a variable pension.

Let’s say that on retirement you are planning to opt for a variable pension. In this case completely phasing out the investment risk in the ten years before your retirement date is not advisable. This is though what happens in the standard investment mix at the UPP, which is why you have the option to choose an alternative investment mix ten years before your official retirement age. With this alternative less investment risk is phased out. You will find further information about this in the brochure in layer 3.