Pensions and benefits in a changing world
The world is changing fast, and so is the landscape of pensions and employee benefits. Belgium faces the same challenge as many other European countries: an ageing population. With people living longer and lower birth rates, the number of retirees compared to those working is expected to rise to 37% by 2040. This puts significant pressure on the public pension system
Pension system undergoing change
To tackle this, Belgium is gradually reforming its pension system. The official retirement age will increase from 66 to 67 by 2030. There’s also a shift towards employer-sponsored pension schemes. The government wants more older workers to stay employed and requires employers to have policies in place to help employees on long-term sick leave get back to work. These steps aim to keep the public system sustainable in the long run.
The growing importance of occupational pensions
One way to judge a pension system is by how well retirees can maintain their standard of living. In Belgium, the average net replacement rate is 61% (according to OECD data from 2022). This means many people see a significant drop in income after they retire.
That’s why occupational pensions - those organized by employers - are becoming more important. Around 85% of Belgian workers are part of such schemes. On average, retirees receive a lump sum of about €36,000. However, the amounts people have saved vary a lot. The government plans to improve this by introducing a minimum pension contribution of 3% for employers.
Dealing with long-term illness
In 2023, over half a million people in Belgium were on long-term disability; more than double the number 15 years ago. With new limits on unemployment benefits coming in 2026, this number is expected to rise further. Employers are looking for ways to prevent employees dropping out and to get them back to work as soon as possible. The government encourages this by imposing fines of up to 30% of the disability coverage paid for the two months after the guaranteed income period.
Employers, Be Ready!
The future of pensions and benefits in Belgium means employers need to take a proactive role. They will increasingly share the costs that are currently covered by public funds. This calls for fresh thinking to create competitive and tailored benefits that fit the changing market.
By preparing now, employers can stay ahead of the curve. Deloitte is here to help you design the right strategy and set up the best pension plan for your organization.
