mast image

Impact Investing

IPE special report May 2018

Sections

Hands off the tiller

Related images

  • Hands off the tiller

Belgium was without a government for the second half of last year. Did anybody notice? George Coats investigates

As a country Belgium tends keep a low profile. Indeed, when non-Belgians talk of ‘Brussels' they are usually referring to the EU, not the national capital. The one thing non-Belgians might have noticed about the country last year was that it spent 197 days without a government after last June's general election. This followed the failure of political parties to agree a constitutional framework and reflected the division of the Belgians into two main communities, the Dutch-speaking Flemings and the French-speaking Walloons.

The deadlock ended after a fashion in December when outgoing premier Guy Verhofstadt  (pictured above) was given a three-month mandate to draft a new budget and try to agree institutional reform.

But did this political hiatus have any real impact on the pensions arena?

"Yes, of course because we were without a government for three months," says Frank Rummens, senior consultant at Pragma. "There are priorities. There were issues around pension funds and other major problems that have not been resolved."

"There are a few things on the table that we'd hoped to make some progress on," says Edwin Meysmans, managing director of the KBC pension fund. "On the pan-European level it had an impact on the road shows for the new OFP. Some were done and more were planned but if you don't have a prime minister, finance minister and a minister of pensions who know whether they will be in the next government, it doesn't make much sense to do any of these things."

"A lot of companies are doing feasibility studies and some of the decision makers in large multinationals want to see somebody from the government side," explains Philip Neyt, chairman of the Belgian Association of Pension Institutions (ABIP/BVPI). "The feeling is that while the OFP framework is very attractive, Belgium has a mixed track record for consistency in the long run. So now they will have to wait to see somebody from the next government and that delay has not helped a lot. I have already been asked what I think the next government will do and I think that they will be very consistent since the law was unanimously approved by parliament and all political parties support the move towards pan-European pension funds."

"Companies considering domiciling their pension fund in Belgium want political security," agrees Henk Becquaert, head of the pension department in the Belgian supervisor CBFA. "They want to ask the prime minister and the finance minister whether this law will continue, they want assurance that the environment won't change and they can only get this message from government. But I always point out to anyone who is interested that when the law was voted in parliament nobody was against it, so I don't think we want to change it. However, I can understand that in company headquarters they want to have that reassurance from the highest level."

And more detailed issues have been delayed. "A caretaker government is only competent to deal with ongoing dossiers and is not in a position to take on new measures," says Meysmans. "A royal decree implementing a political agreement to align the tax treatment of an OFP with that of insurance companies by exempting them from withholding tax instead of them having to pay it then filing a return and getting it back later was on the table. But this was not something that could be qualified as an ongoing matter and so there has been no minister to sign it."

Verhofstadt is due to hand over to a new administration at the end of this month.

Have your say

You must sign in to make a comment