When can supplementary pension be withdrawn?

In an attempt to put the brakes on rising pension costs due to an ageing population, the government is adopting various measures to curb early retirement (bridging pension). As from 2019, statutory pension will be possible only from the age of 63 if the person concerned has worked for a minimum of 42 years. Normal retirement age of 65 is also being gradually raised to 66 from 2025 and 67 from 2030.

Until recently, the consequences of withdrawing supplementary pension were rather limited to the minimum age of 60. In order to promote activation of the elderly, final tax was moreover reduced based on the age on withdrawal date (20% at the age of 60; 18% at the age of 61; 16.50% between the ages of 62 and 65; 10% at the age of 65 if active in the labour market until the age of 65).

However, the Belgian Act of 18 December 2015 to ‘guarantee the sustainability and social nature of supplementary pensions and reinforce the supplementary nature in comparison to retirement pensions’ has introduced major changes. After all, once some transitional measures have ended, supplementary pensions must be withdrawn on the statutory retirement date – no sooner and no later! The amount of the supplementary pension is moreover restricted to the rights acquired on the statutory retirement date.  This means that early retirement can no longer be encouraged by increasing supplementary pensions (e.g. paying a single premium to compensate for the years not worked between early retirement and normal retirement age) or promoting early withdrawal by updating the pension capital favourably, which will be prohibited.

Conversely, pensioners on early retirement will no longer be able to capitalise their supplementary pensions at the pension institution until normal retirement age. As a result of this, many insured people risk losing the high, old interest guarantees on early retirement.

Since these new rules may have drastic consequences for pension planning, some transitional provisions have been created for those who are older than 55 at the end of 2016. These people may still withdraw their supplementary pension before their statutory retirement dates as from the following ages:

  • if aged 58 at the end of 2016: withdrawal is possible from the age of 60;
  • if aged 57 at the end of 2016: withdrawal is possible from the age of 61;
  • if aged 56 at the end of 2016: withdrawal is possible from the age of 62;
  • if aged 55 at the end of 2016: withdrawal is possible from the age of 63.

Furthermore, the favourable departure provisions that increase the acquired rights on the date of departure by means of additional single premiums and/or favourable updating of pension capital may still be applied for those who are at least 55 at the end of 2016.

Those who are younger than 55 at the end of 2016 will therefore have to withdraw their supplementary pension on their statutory retirement date, without any additional favourable departure provisions.

You may withdraw supplementary pension before you actually retire only if you comply with the conditions for statutory pension (i.e. either you are at least 63 and have worked for 42 years as from 2019, or are at least the statutory retirement age of 65 until 2024, 66 between 2025 and 2029, and 67 from 2030) and do not yet take statutory retirement.

It is clear that these new provisions will have significant consequences for end-of-career planning and the activation of the elderly.