This paper identifies the key drivers of pension indexation. With pension specific panel data of 166 Dutch pension funds from 2007 to 2010, this paper examines whether the funding ratio, the inflation, the pension funds characteristic factors and the asset allocation factors exert impacts on the indexation for active participants and for pensioners. It also tests the extent to which policy laddermodels predict the actual indexation level. Estimations show that the most influential drivers of indexations are the funding ratio and the inflations. The impacts of the size, the members’ age profile, and the type of pension funds are also statistically significant but with very small magnitude. In addition, the asset allocation factors hardly affect pension indexations except for interest rateexposure. With regards to policy ladders, this paper reproduces the policy ladders commonly modeled by existing literature and the policy ladders are not able to predict actual indexation with accuracy.