What are the new federal government’s plans for our pensions?

The new government intends to reform the pensions system in order to prevent an ever-growing percentage of government government revenue having to go pensions. “Without sweeping policy changes, the affordability of Belgian pensions is at serious risk. Belgium risks ending up in a situation where it will no longer be able to meet its pension obligations without significant tax increases or drastic cuts elsewhere in the budget”, the coalition agreement reads. If this were to happen it would be bad for the country's economy and for competitiveness and it could also serve to undermine people's trust in the government and affect younger generations’ prosperity, the coalition parties argue.

According to the new government everyone should ideally be given “a basic level of financial security” after retirement. It says that the principle its reform, is to strengthen the link between the actual amount of time a person has worked and their accrued pension rights. To make pensions more consistent and fair the different systems will be gradually brought together into one system for civil servants, employees and the self-employed.  

Those that wish to retire early will be able to do so. However, they will feel it in their pocket as a “malus” will be deducted from their pension. Meanwhile those that work beyond their statutory retirement age will receive a bonus on top of their pension.

• The malus works as follows. Those that retire early but have not worked for 35 years will see their pension amount fall by 5% a year from 2040 onwards. The malus percentage will steady increase between now and 2040. It will be -2% between now and 2030, -4% between 2030 and 2040 and -5% beyond 2040.

• The bonus will be given to those that work beyond their statutory retirement date and have had a career of at least 35 years in which they

• applies to those who work after the statutory retirement age and have a career of 35 worked years of 156 days.

• The level of the bonus will also increase gradually between now and 2040. Between now and 2030 it will be 2%, 4% between 2030 and 2040 and +5% after 2040. 

Currently around one third of all the pension rights accrued by people in Belgium come from so-called “equivalent days”. These are periods during which a person was, for example on sick leave or maternity leave. These days are counted towards a person’s pension rights as if they had worked them.

The new rules will change this. From 2027 “equivalent periods” that account for more than 40% of a person’s career will no longer count towards their pension rights. From 2031 this will be 20%, as is currently the case for civil servants.

However, periods of sick leave and leave taken to care for a relative are not included in the new measure. Periods of long-term unemployment and a variety of scheme that enable people to retire early or be inactive in which receive payment from the state to which their (former) employer makes a contribution will be included though.

For those that have reached the legal retirement age but have monthly income of less than €1,549 (single people) or €1,032 (cohabitants) an addition benefit called the Guaranteed Income for the Elderly (IGO).

Those who want to claim it must in future have lived legally and continuously in Belgium for at least 5 years. There will also be stricter monitoring of those that stay abroad for long periods while receiving IGO.

Surviving relative pension is given to the spouse or orphans of a person that has died. The new government says that this is “an inactivity and poverty trap for a lot of widows”.

From 2026, this pension will be replaced by a transitional benefit, which can be combined with a professional income. The benefit will be limited in time to a maximum of two years (or three to four years for those with young dependent children).

The new government wants all public sector employees to have a pension plan from their employer. By 2035 the employer's contribution should be at least 3%.

Currently you can take early retirement from 61 or 62 if you have worked for 43 years or from 63 or 64 if you have worked for 42 years. For those wishing to take early retirement, the conditions for white- and blue-collar workers, civil servants and the self-employed will be made the same. Only calendar years during which at least 2 quarters were work will count for all from 2027.

However, a transitional period is provided for those close to early retirement. Those aged 60 or over from the new legislation comes into force will have to work a maximum of 1 year longer. Those aged 59 will have to work a maximum of 2 years longer.

The retirement age for military personnel (now 56) and of rail staff (now 55) will gradually be raised to the statutory retirement age for all other employees and civil servants. From 2027, its age will rise by 1 year each year (except for those close to retirement).

For the police, the option to retire from the age of 59 remains for the time being. However, the conditions will be stricter.

In education, a 1.05 per cent increase coefficient will continue to apply to calculate pensions until 2027. The increase coefficient means that a year of service weighs slightly more heavily, so you reach a full pension faster. From 2027, it decreases annually by 0.005 percentage points per year to reach 1.025 in 2032.

By 2062, the level civil servants' pensions will be calculated on their full career of 45 years (rather than the last 10 years as is the case today). From 2027 that calculation period will lengthen a little each year. Once pensions of civil servants with tenure becomes equal to the pension of contractual employees they also be offered an employee pension plan.

In future, civil servants will also no longer be able to accumulate sick days that they can then take off en bloc at the end of their career. For federal civil servants, the new government will switch to disability and invalidity insurance as is the case in the private sector.

A system whereby civil servants' pensions can rise on top in excess of inflation will be scrapped from 2026.

The government is exploring the possibility of introducing a system of part-time pension. This would allow those aged 60 or over to receive half their pension while continuing to work 50%. This would be conditional on them meeting the requirements for early retirement or statutory retirement.