The Act of 27 June 2018 (Belgian Official Gazette 5 July 2018) provides for the implementation in Belgian law of Directive 2014/50/EU, which contains several minimum requirements for enhancing worker mobility between Member States by improving the acquisition and preservation of supplementary pension rights. To this end, it amends the Supplementary Pensions Act in a number of respects. In principle, the amendments will have consequences for all employees under the age of 25 and for all employees who change employers, and therefore also for those who stay within Belgium and have not exercised the right to free movement.
Immediate affiliation with the supplementary pension scheme
The first new provision abolishes the possibility of including a minimum affiliation age of 25 years in the pension commitment and also abolishes the possibility of imposing a waiting period for affiliation on an employee who has not yet reached the age of 25. As a result, as of 1 January 2019, all employees who fall within the scope of application of the supplementary pension scheme must immediately be affiliated with the scheme. This measure puts an end to the disadvantaging of employees who start working at a young age.
Abolition of the one-year vesting period
The second new provision abolishes the possibility of including a vesting period in the pension commitment. The vesting period is the period of active affiliation required in order for the employee to be entitled to acquire supplementary pension rights. Currently this period can be a maximum of one year. The vesting period of one year has had adverse consequences for mobile workers who, every time they changed employer, were faced with a period of up to one year without any entitlement to supplementary pension rights.
As from 1 January 2019, the employee will immediately be entitled to his vested reserves and vested benefits upon affiliation with the supplementary pension scheme.
In the event that the vested reserves do not exceed EUR 150 when the employee departs, the employee must leave these reserves in the pension institution of his former employer. In this case, he is not entitled to have his vested reserves transferred. This restriction was introduced to keep the administrative burden of the new regime within bounds. Upon retirement, however, the employee will continue to be entitled to payment of the pension benefit arising from these reserves.
A new information obligation
Finally, the Act of 27 June 2018 imposes a new information obligation on the pension institution and the organiser of the supplementary pension scheme. The pension institution or the organiser must share the following information at the affiliate's request, to the extent that this information is not yet included in the pension plan rules:
- for the employed affiliate, the conditions governing the acquisition of supplementary pension rights and the effects of their application when the employment relationship is terminated;
- the conditions governing the supplementary pension rights after termination of the employment relationship.
This information must be communicated in writing to the affiliate within a reasonable period. The affiliate can request this information only once a year.
Entry into force
The Act has entered into force with retroactive effect as of 28 May 2018 with regard to the information obligation.
The other provisions will come into force on 1 January 2019. Consequently, on 1 January 2019, any conditions regarding entitlement to supplementary pension rights will be deemed to have been fulfilled. On 1 January 2019 there will be immediate affiliation with the pension scheme for employees who have not yet reached the minimum age for affiliation or who are still subject to a waiting period.
The new provisions will apply even if the pension plan rules have not yet been formally amended.