Companies need to prepare for Belgian reform - report
BELGIUM – Mercer Human Resource Consulting says companies in Belgium should start looking at their pension arrangements in the wake of the Vandenbroucke reform.
“Given that the law will apply from January 1 2004, we recommend that employers already look at the procedures in place and determine their preferred protocol for the future with a view to initiating discussions with the employee representatives later in the year,” the consultancy firm says.
“We recommend that all these changes be applicable by the end of the year,” says Mercer’s Maeve McCumiskey in a report on the new law, which was passed last month.
All plan documentation has to be formally modified to comply with the new legislation by the end of 2006, she adds.
The law, named after social affairs and pensions minister Frank Vandenbroucke, sets out a framework for the introduction of sector-wide, defined contribution-type occupational pension arrangements, which the Belgian government hopes could increase pension coverage to around two-thirds of the population.
Two parts of the Vandenbroucke law, those concerning prudential rules and social matters, were approved by the government commission last year.
The government says the new law takes into account “the completely different needs” of today’s older people.
According to the Belgian pension fund association, Belgian pension funds returned an average –11.92% for 2002 – making it the third straight year of negative returns. The Organisation for Economic Cooperation and Development recently said the Belgian pensions system was at a “crossroads”.