Pension Benefit

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Help your employees take control of their financial future

The rising global cost of living means that the statutory state pension will likely not be sufficient for your employees to enjoy the standard of living they desire in retirement.

By setting up an employee pension scheme as part of your group benefits package, you can directly help your employees build and plan for a better, more prosperous financial future.

Statutory Benefits

In Belgium, membership to the Statutory Public Pension Scheme is compulsory for all employed, self-employed and civil servants. This is called the legal pension or state pension. As such, when an Employee retires, he/she will receive a monthly allowance from the government.

Benefits are income-related, although the Belgian state grants a minimum income for elderly people. The pension income depends on preceding earnings, current general income level and marital status, and follows the Consumer Price Index.

Belgium utilizes a repartition system to manage the vested pensions. This implies that the current working population finances the pensions of the current retired population.

That is unlike a capitalisation system where every citizen saves for their own future retirement through monthly social contributions paid on their remuneration. The repartition system is one of solidarity. The active population works for the pensions of the retirees.

The danger lies in the facts that at some point, the revenue of the social contributions from the active population will no longer cover the expenses of the pensions of the nonactive population. In the past there were an estimate of 4 active employees funding 1 retiree. Currently that ratio is 3 to 1 with the prospect of a 2 to 1 ratio by 2040.

With the costs of living rising non-stop, the expected outcome is that the Legal Pension will not be sufficient to continue the same standard of living during the retirement as during the career.

Complimentary benefits

Approximately 75% to 80% of the Belgian employees build up a complementary pension with the help of their employer or sector.

This ensures that a certain standard of living is maintained upon retirement.

The employer contributes a monthly or annual sum for the employee. A personal contribution may also be included in the plans. The employer may differentiate the premiums based on category, years in service and age, as long as they don’t discriminate any employee(s).

What are the benefits of introducing a group pensions plan?

These pension contributions have multiple advantages for both the employer, as the employee:

Employer:

✓ The contributions are fiscally deductible as professional expenses.
✓ Lower social contributions compared to normal wage
✓ Flexibility in plan-design per category
✓ A group insurance is seen as an integral part of the salary package

Employee:

✓ The employee receives a supplementary lump sum at retirement that can be spend how he/she sees fit.
✓ The pension gap is strongly reduced
✓ Any personal contributions are fiscally deductible in the income tax.

You can also enjoy:

Peace of mind for your employees
Any contributions you and your employees make are fiscally deductible (as professional expenses and personal contributions respectively)
Group pension schemes can be a valuable part of a salary package, and help you attract and retain top talent in your industry
Plans are flexible, and can be tailored so they suit the specific needs of your business

Why work with a broker?

As specialist employee benefit insurance brokers, we can help you:

Find the scheme provider that best suits your requirements as a business
Negotiate the best possible terms, to ensure your scheme is as cost-effective as possible
Ensure that your scheme meets all local regulatory and legal requirements

And, of course, we’ll be there to offer guidance right the way through the implementation process.

We’re here to take the work and effort of implementing a market-leading pension scheme off your shoulders.

Why Howden?

Howden Belgium are part of the wider Howden Group. We can call on the expertise and resource of more than 16,000+ other group members based across more than 50+ countries. However complex the needs of your business are, we have the knowledge and the global resources to back you.