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BELGIAN ASSOCIATION OF PENSION FUNDS

BELGIAN ASSOCIATION OF PENSION FUNDS. COUNTRY REPORT BELGIUM. A / Structure of Belgian Retirement Provisions. 1 st pillar: PAYG legal pensions 2 nd pillar: supplementary, collective group insurance + pension funds 3th pillar: long term savings, individual.

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BELGIAN ASSOCIATION OF PENSION FUNDS

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  1. BELGIAN ASSOCIATION OF PENSION FUNDS COUNTRY REPORT BELGIUM EFRP MEETING - 2001

  2. A / Structure of Belgian Retirement Provisions • 1st pillar: PAYG legal pensions • 2nd pillar: supplementary, collectivegroup insurance + pension funds • 3th pillar: long term savings, individual EFRP MEETING - 2001

  3. A/ Structure of Belgian retirement provisions EFRP MEETING - 2001

  4. B/ Developments (1) • Political context: growing awareness of impact on social security of demographic evolution and the need for action • “zilverfonds” • reform of 2nd pillar EFRP MEETING - 2001

  5. B/ Developments (2) • “zilverfonds” • rescue of 1st pillar pensions? • gradually funded up to 120 bn EUR by 2030 • non-fiscal financing • also considerations of debt management EFRP MEETING - 2001

  6. B/ Developments (3) • reform of 2nd pillar • facilitating access to complementary pensions for larger part of population • complementary pension = complementary social protection EFRP MEETING - 2001

  7. B/ Developments (4) • reform of 2nd pillar • “sectorschemes” in key role • organise “solidarity” • set up by CBA • minimum return for DC-plans EFRP MEETING - 2001

  8. B/ Developments (5) Legal framework • Royal Decree 7 may 2000: Control legislation finalised • Multi campany PF: final RD still pending, will allow for smaller companies (not belonging to sector) to jointly set up PF • Law proposal “reform 2nd pillar” shortly before parlement EFRP MEETING - 2001

  9. C/ Statistics (1) 1998 Contributions (bill.euro) • Pillar 1 = payments in PAYG system • 62% private sector • 29% public sector • 9% self employed • Pillar 2 • 79% group insurance • 21% pension funds • Pillar 3 • 92% life insurance • 8% pension savings EFRP MEETING - 2001

  10. C/ Statistics (2) 1998 Reserves (bill.euro) • Pillar 1 est. • Pillar 2 • 68% group insurance • 32% pension funds • Pillar 3 • 74% life insurance • 26% pension savings EFRP MEETING - 2001

  11. C/ Statistics (3) 1999 Asset mix • Bonds: decline • Stock: • strong increase • in ‘99 for the first time > 50% of assets • Real estate: +/- 5% EFRP MEETING - 2001

  12. C/ Statistics (4) 1999: Average annual return over period of x years EFRP MEETING - 2001

  13. D/ Concerns of BAPF (1) • Need for distinct regulatory framework, no longer “appendix” of insurance companies • True “level playing field” • Multi company PF legislation • fiscal reform • Law proposal “reform 2nd pillar” shortly before parlement. EFRP MEETING - 2001

  14. D/ Concerns of BAPF (2) Law proposal “reform 2nd pillar” shortly before parlement. Many concepts still have to be specified: • “guaranteed return”in DC-plans • what will be the actuarial impact? • content of guarantee? EFRP MEETING - 2001

  15. D/ Concerns of BAPF (3) Law proposal “reform 2nd pillar” shortly before parlement. Many concepts still have to be specified: • Concept of “solidarity” • what does it mean? • Interest versus capital • Interest payment is always an option. • minimum level for conversion? • Concept of “transparancy” => mandatory information => “red tape” ?? EFRP MEETING - 2001

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