Social partners recently agreed on an alteration to minimum employers’ guarantees in supplementary pension plans.
From 2016, the current minimum return of 3.25% on employers’ contributions and 3.75% on personal contributions will be replaced by a uniform guaranteed return that is linked to the average return over 24 months on 10-year Belgian linear bonds (OLOs). The guaranteed percentage will then be equal to 65% of the average OLO return, subject to a minimum of 1.75% and a maximum of 3.75%. The 65% may increase to 85% in future if the National Bank of Belgium thinks that these guarantees are insurable.
By means of this agreement, the financial risks for employers are limited, while employees enjoy a fair interest guarantee on market terms. This agreement would therefore have to contribute to the further development of supplementary pension plans in order to safeguard the standard of living after retirement.
The inner cabinet has meanwhile declared it is willing to ratify the agreement reached among social partners in its entirety. Although it is clear that the old interest guarantees remain fully vested until the end of 2015, we still have to wait for the final legislative texts in order to know the exact details regarding the future development of guaranteed returns.