Belgian pension funds closed the first half of 2025 with a modest positive return of 0.25%, Belgian pension fund association PensioPlus announced today.
In the first six months of the year, markets were plagued by geopolitical turbulence and rising government bond spreads.
Belgian pension funds tend to invest rather conservatively, with fixed income dominating most portfolios.
On average, funds in the country invest 46% of assets in bonds and only 37% in equities. Annual returns have averaged 3.9% over the past 10.5 years.
Minimum guarantee
The Belgian second pillar is characterised by the existence of a minimum guarantee.
This mechanism ensures that when members withdraw their capital at retirement, they will never receive less than the total contributions that were paid over the years, supplemented by a guaranteed interest rate that protects them against loss of value.
As a result, the second pillar offers an exceptionally safe way of building a pension, providing members with certainty regardless of market developments or economic conditions.
Since the beginning of this year, the guarantee has been raised from 1.75% to 2.5%, and it has now been confirmed by the regulator until the end of 2026. The flipside of this system of minimum guarantees is, however, that the risk appetite of pension funds is limited.
According to PensionPlus chair Jan de Smet, vigilance will continue to be required in the second half of the year, despite the European Central Bank being expected to possibly cut interest rates further, which could improve market sentiment.
“At the same time, geopolitical tensions and economic asymmetry across continents call for strategic caution,” said De Smet.
“Economic uncertainty remains elevated and may lead to further short-term volatility. But pension funds invest with a clear long-term vision. That is precisely their strength and added value,” he added.
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