A high level task force, commissioned by Belgian Prime-Minister, Guy Verhofstadt, to investigate supplementary pension schemes has disintegrated in acrimonious circumstances, after the Belgian liberal party tried to push forward a proposal for a second pillar 401k system.
The working group, including Phillip Neyt, managing director of the Belgacom retirement scheme, had been charged with finding a consensus on the country’s second pillar to present to the government before October’s crucial pension announcements.
However, Henk Becquaert, adviser to Frank Vandenbroucke, the Belgian Minister for Pensions, comments: “The working group is finished. We had several meetings and in reality we had some disagreements in the group for which we couldn’t find a solution.
Becquaert explains: “There was a sentence in the government proposals saying that we will try to put more second pillar sector-wide pensions into place. This was put very clearly in the documents of agreement between the parties and I think everyone accepts the general idea.
“However, the Liberal party was actively pushing a system of very individual, 401k type plans in Belgium as part of the second pillar. These would be very liberal with a lot of possibilities for people to do what they want with their money.
“The president of the working group – Emile Broekhoven, a liberal, presented this to the group and pushed for it, but he wasn’t alone in the proposition.”
Becquaert says the proposal went against the original remit of the
working group. “The other parties said ‘no’ because this is a third pillar issue – but it wasn’t a complete no. If we have fiscal reform, which will also be on the agenda in October, then the suggestion was to do this type of fund – but not in the second pillar.”
Becquaert says the working group also stumbled on the question of the appropriateness of some DC supplementary plans.
“We discussed this in the working group and you could feel that some parties don’t like this system too much. At the individual third pillar level there is less of a problem. Both myself and my minister really feel that employers are evading their responsibilities in some ways.
“A well governed DC plan is no problem, but when you go to cafeteria style plans or even some which seem even like ‘casino’ plans – where you can do almost anything you want such as 100% in equity in South East Asia or Russia or something – if you install such plans who takes the risk? We really have a problem with that. You can’t expect employees to know international markets and the dangers and opportunities.”