On 6 March 2017, the Court of Cassation rendered a long-expected decision: in the context of occupational pensions for workers, the employer is obliged to make up the deficits of the acquired reserves and the deficits in respect of the "guaranteed return" upon termination of the employment agreement, regardless of the cause of the deficits.
Context
The amounts granted to the affiliated worker as part of the liquidation (in deficit) of the pension institution Apra Leven were less than the amount of the statutory guaranteed return. The worker claimed that the employer had to make up this difference. The Labour Court of Antwerp ordered the employer to make up the deficit.
Decision
The Court of Cassation confirmed the decision of the Labour Court: the organiser (employer) is obliged to make up the deficits of the acquired reserves and the deficits in respect of the guaranteed return (defined contribution plan) upon termination of the employment agreement, regardless of the cause of those deficits. This follows from article 30 of the Occupational Pensions Act. The fact that the employer paid all contributions to the pension institution correctly and did not make any mistakes does not exempt it from this obligation. The Labour Court rightly ordered the employer to make up the difference between the amounts granted to the affiliated worker as part of the liquidation of Apra Leven and the amount of the statutory guaranteed return.
Impact
In case of deficits in respect of the guaranteed return (defined contribution plan) or the acquired reserves upon termination of an employment agreement, the employer will have to pay the difference, even though the employer already paid all the required premiums and did not make any mistakes.
The Occupational Pensions Act does indeed provide the affiliated worker with sound protection –but, as a result, the employer will sometimes have to pay twice.