Article

What are the outlines of the private supplementary pension for employees in Belgium?

March 21, 2019
| Belgium

On 27 December 2018 the new Private Supplementary Pension for Employees Act (PSPE) was published. This Act shall come into force on 27 March 2019.

What exactly does this Act imply?

This new act allows employees who do not yet or already build a limited supplementary pension to build an (additional) 2nd pillar pension on a voluntary basis. Not all employees currently have a supplementary pension via the employer. In this way, the government wants to enable all wage earners to build a supplementary pension through deductions of their wages carried out by the employer.

What are the outlines of this Private Supplementary Pension for Employees?

1. For the employees

  • The employee can voluntarily and of his/her own accord conclude a PSPE contract in his/her name and with a pension provider of his/her choice.
  • The employee is free to determine the amount of the contribution that will be deducted from his/her wage but with a maximum annual contribution. To calculate the annual maximum contribution, employees must base themselves on their reference wage and the build-up of their possibly existing supplementary pension rights. The maximum contribution is equal to the amount of the positive difference between:
    • 3% of the reference wage of the year N-2 with a minimum of € 1,600 (in 2019)
    • And the difference between the supplementary pension reserves of N-1 and N-2 capitalised at the average interest rate of the last 6 years of the OLOs over 10 years. More information about the already built up pension reserves is available via Mypension.be.
  • Employees must provide all necessary information at least 2 months in advance to their employer: amount of the contribution, insurance certificate and all other data.
  • The fiscal treatment is identical to that of a personal contribution in a collective 2nd pillar pension commitment:
    • Premium: 4.4% tax and 30% tax reduction.
    • Paid out capital: 3.55% sickness and invalidity contribution, 2% solidarity contribution and 10% withholding tax.
    • For the calculation of the maximum premium, the 80% rule must also be taken into account. Practice will show how this is effectively calculated.

2. For the employers

  • The employers must deduct the contribution from the wage and transfer it to the pension provider. This will involve extra administration as, in addition to the transfer, all individual choices and later adjustments must be kept up to date.