A summary of the most important changes to the law on group insurance
For a while now, the minimum return guarantee of 3.25%-3.75% on supplementary pension schemes has been an item for discussion. In addition, there have been many questions about the consequences of the raised retirement age on supplementary pensions. Here, we give you a summary of the most important changes to the law on group insurance, valid as of January 1st 2016.
1. The minimum guaranteed return is now variable
The minimum guaranteed return on premiums paid since January 1st 2016 shall, from now on, vary between 1.75% and 3.75%. The exact return shall depend on the average return over the last 24 months on Belgian Government Bonds maturing in 10 years (linear bonds).
Notice: the guaranteed return applicable on reserves already accumulated shall still be the former one of 3.25% or 3.75%, until the end date of the contract or until retirement.
2. Retiring employees shall have an extra option
From now on, retiring employees shall have three options:
They can keep their accumulated returns;
They can keep their accumulated pension reserves and death benefits;
New: they can convert their pension returns in death benefit insurance. If an employee opted for a mere accumulation of pension reserves instead of a death benefit scheme, he will lose his reserves at the time of his decease before the agreed retirement age. He can now reconsider that decision.
3. The supplementary pension cannot be paid out until the statutory retirement age
The employer has to pay the supplementary pension at the time of effective legal retirement. In some cases, the contract shall have to be extended until the date of the effective legal retirement age, or will have to be shortened until such date. Transitional measures have been put in place.
Of course, there are exceptions and special cases, which we have not addressed here. If you want to know what the impact is of the new legislation on your particular situation, we invite you to contact our specialist Employee Benefits Rudy Peeters or your trusted contact person.
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