Opportunities in Fund Raising: Belgium’s Pension System

Knowledge for getting the most from the advinda Premium goBenelux Pension Funds Package.

Population: 11.3 million

Pension system design

The pension system in Belgium consists of three pillars:

  1. statutory pay-as-you-go financed public pension system
  2. non-obligatory by law, but quasi-mandatory occupational pensions
  3. private pension schemes with tax benefits
  4. private pension schemes without tax benefits

The asset allocation of the Belgian pension funds consisted of 8.7% alternative assets in 2016, from which the majority was real estate at 5.1%.

Public pensions

  • employed, self-employed and civil servants are compulsorily insured under a statutory pension scheme
  • Belgian state grants a minimum income for elderly people for every person older than 65 whose pension and other income is below a certain threshold
  • pension income depends on preceding earnings, current income level and family status
  • maximum pension benefit equals 60% of pensionable income for singles and 75% for married individuals
  • pension calculations are subject to a ceiling (€ 54,648.70 in 2017), while employee’s and employers’ contributions are not, currently amounting to 7.5% (employees) and 8.86% (employers)

The official retirement age is 65 years for men and women with a contribution record of at least 45 years from which at least 30 years must have been working years. Retirement at 62 is possible with a working time of at least 40 years. The future retirement age will be raised to 66 in 2025 and 67 in 2030.

Occupational pensions

  • Occupational pension plans are provided mainly to white-collar employees:
    • company schemes
    • industry-wide schemes
    • individual pension promises
  • Industry-wide pensions schemes can be established as a result of collective bargaining between employer associations and the trade unions. Each industry can have just one pension scheme.
  • Employers are obliged to join these schemes unless the collective agreement allows them to contract out.
  • The collective agreement thus sets minimum standards for each sector, creating a highly competitive and professional pension market.
  • Company pensions can be funded either through an insurance company or a self-administered pension fund; book-reserve (or unfunded) systems are not permitted

Private pension schemes with tax benefits

Because of current demographic changes, the emphasis in the future will be more on the second and third pillar; this will result in more capital flowing to corporate and public pension funds. To stimulate the third pillar, the Belgian government has increased the amount of the tax benefit from €960 to €1230.

Private pension investments equivalent to: 5.8% of GDP (2016)

Private pension assets 2014: $ 27,560.9 million USD (all forms of private investment with a value associated to a pension plan over which ownership rights are enforced by institutional units, individually or collectively. This indicator is measured in millions of USD; source: OECD)

Pension funds’ assets 2016: $ 30,612.2 million USD (assets bought with the contributions to a pension plan for the exclusive purpose of financing pension plan benefits. The pension fund is a pool of assets forming an independent legal entity. This indicator is measured in millions of USD; source: OECD)

Net pension replacement rate 2016: 66.1% (individual net pension entitlement divided by net pre-retirement earnings; measures how effectively a pension system provides a retirement income to replace earnings. This indicator is measured in percentage of pre-retirement earnings by gender; source: OECD)

Private pension schemes without tax benefits

The fourth pillar is the collection name for all private pension schemes which do not result in tax benefits.


The Organisation for Economic Co-operation and Development (OECD) – http://www.oecd.org

Federal Pensions Service of Belgium – http://www.onprvp.fgov.be

European Actuarial & Consulting Services – http://euracs.eu/summaries/belgium-pension-summary/

Pensioplus – http://pensioplus.be/