Belgium needs both a robust first pillar and a widely accessible and sufficiently developed second pillar, according to PensioPlus, which argued that a strong second pillar is “not an alternative to the statutory pension, but an indispensable supplement”.

PensioPlus’ comments followed the release of the Study Committee on Ageing’s Ageing in Belgium by 2070 report, which found that the rise in pension expenditure has been significantly slowed down by the recent pension reform and that budgetary implications remain considerable, with social expenditure set to rise before becoming virtually stable.

The report also showed that over the period 2025–2070, the federal government’s measures will reduce the budgetary cost of pensions by 1.4 percentage points of GDP, although pension expenditure will still increase by 0.7 percentage points of GDP over the same period.

Over the longer term, pension adequacy is declining, with the benefit ratio – the ratio of the average gross pension to the average gross earned income – expected to be around 13 per cent lower in 2070 than it was in 2025.

As a result, the average pension is rising more slowly than the average earned income.

However, the Study Committee on Ageing is not the only organisation to have flagged this problem, as the separate budgetary and social assessment of the pension reform carried out by the Federal Planning Bureau has already reached a similar conclusion.

The Federal Planning Bureau suggested that the reform slows the growth in pension expenditure but, in the long term, leads to replacement rates and benefit ratios that are lower than those without reform.

But it noted that the precise impact varies depending on the pension scheme, gender and the pension policy in question.

In response to the findings, PensioPlus argued that sustainable pension policy cannot be evaluated solely from a budgetary perspective.

Instead, the association suggested that the financial sustainability of the state pension is essential, but it must go hand in hand with guaranteeing pensioners a decent standard of living, both now and in the future.

PensioPlus explained that the first pillar remains the foundation of the Belgian pension system, but given that the state pension is rising at a slower rate than earned income, a widely accessible and adequately funded second pillar is increasingly important.  

The association stressed that the supplementary pension is not a substitute for the state pension, but rather an essential complement to it.

Given this predicament, the Study Committee on Ageing’s figures highlight the urgent need to work towards both broadening and deepening supplementary pensions.

This includes ensuring all workers have access to a supplementary pension and that contributions are high enough to enable workers to build up a substantial supplementary pension by the end of their working lives.
 
The federal government agreement stipulates that, by 2035 at the latest, all workers, including contract staff in the public sector, must have a sound supplementary pension, funded by an employer’s contribution of at least 3 per cent.

And according to the government agreement, sectors that have not yet reached this threshold must, as a matter of priority, make an additional effort within the framework of their sectoral agreements.

PensioPlus argued that this objective needs to be translated into a concrete and credible growth trajectory leading up to 2035, and work on this must begin today.

The association acknowledged that building up a pension takes time, and the later the increase in contributions takes place, the shorter the period during which returns can be accumulated, and the greater the effort required to close the gap later.

“Only by investing simultaneously in a robust first pillar and a widely accessible and sufficiently developed second pillar will Belgium be able to reconcile the fiscal sustainability of its pension system with an adequate pension income for future generations,” PensioPlus said.

---