BELGIAN ASSOCIATION OF PENSION FUNDS

1
BELGIAN ASSOCIATION OF PENSION FUNDS

• COUNTRY REPORT
• BELGIUM

2
A / Structure of Belgian Retirement Provisions

• 1st pillar PAYG legal pensions
• 2nd pillar supplementary, collectivegroup
  insurance pension funds
• 3th pillar long term savings, individual

3
A/ Structure of Belgian retirement provisions
4
B/ Developments (1)

• Political context growing awareness of impact on
  social security of demographic evolution and the
  need for action
• zilverfonds
• reform of 2nd pillar

5
B/ Developments (2)

• zilverfonds
• rescue of 1st pillar pensions?
• gradually funded up to 120 bn EUR by 2030
• non-fiscal financing
• also considerations of debt management

6
B/ Developments (3)

• reform of 2nd pillar
• facilitating access to complementary pensions for
  larger part of population
• complementary pension complementary social
  protection

7
B/ Developments (4)

• reform of 2nd pillar
• sectorschemes in key role
• organise solidarity
• set up by CBA
• minimum return for DC-plans

8
B/ Developments (5)

• Legal framework
• Royal Decree 7 may 2000 Control legislation
  finalised
• Multi campany PF final RD still pending, will
  allow for smaller companies (not belonging to
  sector) to jointly set up PF
• Law proposal reform 2nd pillar shortly before
  parlement

9
C/ Statistics (1) 1998

• Contributions (bill.euro)
• Pillar 1 payments in PAYG system
• 62 private sector
• 29 public sector
• 9 self employed
• Pillar 2
• 79 group insurance
• 21 pension funds
• Pillar 3
• 92 life insurance
• 8 pension savings

10
C/ Statistics (2) 1998

• Reserves (bill.euro)
• Pillar 1 est.
• Pillar 2
• 68 group insurance
• 32 pension funds
• Pillar 3
• 74 life insurance
• 26 pension savings

11
C/ Statistics (3) 1999

• Asset mix
• Bonds decline
• Stock
• strong increase
• in 99 for the first time gt 50 of assets
• Real estate /- 5

12
C/ Statistics (4) 1999 Average annual return
over period of x years
13
D/ Concerns of BAPF (1)

• Need for distinct regulatory framework, no longer
  appendix of insurance companies
• True level playing field
• Multi company PF legislation
• fiscal reform
• Law proposal reform 2nd pillar shortly before
  parlement.

14
D/ Concerns of BAPF (2)

• Law proposal reform 2nd pillar shortly before
  parlement. Many concepts still have to be
  specified
• guaranteed returnin DC-plans
• what will be the actuarial impact?
• content of guarantee?

15
D/ Concerns of BAPF (3)

• Law proposal reform 2nd pillar shortly before
  parlement. Many concepts still have to be
  specified
• Concept of solidarity
• what does it mean?
• Interest versus capital
• Interest payment is always an option.
• minimum level for conversion?
• Concept of transparancy gt mandatory
  information gt red tape ??