Belgian pension fund body PensioPlus has welcomed the concrete timing for expanded second pillar coverage set out in the country’s new coalition government agreement.

Last week the Flemish nationalist party New Flemish Alliance (N-VA) struck a coalition deal with four other parties, the so-called Arizona Coalition, and yesterday the leader of the N-VA and his cabinet were sworn in at the Royal Palace of Brussels.

In addition to first pillar reforms such as phasing out special benefits for some sectors, the coalition agreement includes an ambition to offer all employees a workplace pension with an employer contribution of at least 3% by 2035 at the latest.

PensioPlus said this gave sectors and companies a clear perspective for the development of a strong second pillar, which was crucial for a sustainable pension system.

“The proposed measures show that the new government recognises the need for a strong supplementary pension,” said Jan De Smet, chair of PensioPlus.

“The concrete elaboration of this now lies with the social partners. As PensioPlus, we are ready to support them in this with our technical expertise and practical experience.”

The expansion of the second pillar was desperately needed, said PensioPlus, pointing to a recent OECD study showing that Belgians depend on the first pillar for 85% of their monthly income, compared with an average of 57% in other developed countries. And at 45% of the last salary, far below the OECD average of 54%, this Belgian pension was often insufficient, noted PensioPlus.

“In concrete terms, a contribution of 3% means that many employees can see their pension increase by about a fifth compared to their last salary,” said De Smet of the proposed reform.

“That makes a big difference to their quality of life during retirement.”

Ann Verlinden, chief executive officer of PensioPlus, said: “By setting concrete objectives and a clear timeline now, we can finally catch up.

“The principles of the coalition agreement – including the focus on justice between generations and equality between men and women – form a solid foundation for this.”

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