Since there are still very few actual pension funds in Belgium, the scope for consultancy remains narrow. This is the view of Sander Winckel of Pragma Consulting in Brussels. “The industry here is still in its infancy,” he says. Occupational pension schemes are only now being established following changes in Belgian pension fund regulation last April.
Erwin Van Doorn of Arthur Andersen in Brussels, however, identifies a more healthy and ever-growing consultancy industry. “More and more companies are opting to set up pension funds,” he says. This is despite 2000 not displaying the same level of prosperity as previous years, where the long-term average now shows that pension funds clearly outperform the more traditional insurance companies. He believes that this is because people are beginning to understand the importance of saving for their retirement. “People are now mature enough to recognise the financial opportunities that a pension fund can bring.”
Traditionally, consultants in Belgium have been used for liability assessment and other actuarial and administrative work. Winckel states that despite Pragma’s expertise in asset consultation, this situation remains largely unchanged. “In Belgium we see more consultancy on the liability side than on the asset side in which we specialise”. He hopes that this will change as new legislation calls for a greater number of second pillar pension funds to be set up. “This is definitely an area of growth for us,” he says. However, third pillar schemes have yet to make an impact, because the Belgian tax system hinders their growth. “The tax structure here is unfavourable towards private plans, but hopefully this will change.”
Danny Vercruyce of Watson Wyatt in Brussels says that there is a greater tendency to use consultants for asset liability modelling (ALM) because traditionally Belgian pension funds are too small to carry this out themselves. “Most pension funds in Belgium do not have the size for internal ALM capacity.” Van Doorn also notes the shift in consultants’ traditional actuarial and book-keeping role. “Theoretically we provide a full range of actuarial and administrative advice, but more and more we are being asked to help with ALM studies to determine the appropriate asset mix.” He says that the different ends of the consultancy scale are getting involved in this. “Actuarial and financial experts are combining their knowledge to provide the optimum model and advice.”
Winckel says: “One of the major features of Belgian pension funds is that they are particularly international and diversified.” He says that the market is generally too small and that’s why small local firms are not so involved in asset consulting. “If you look at the total figures for the pensions industry here, you see that it is not that big yet. It is a very small player in the wider European arena.”
Vercruyce sees growth in the need for professional independent advice. “Pension funds are now more aware that this level of consultation pays off,” he says.
New legislation is expected to have a major impact on ALM and investment opportunities. “We are on hold at the moment but it looks very exciting,” he says.

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