The Belgian Federal Coalition Agreement for 2025–2029 outlines the government’s plans to expand pensions coverage and improve the sustainability of the social security pension system. Under the proposal, employers would be mandated to provide occupational pensions for their employees, employees would be encouraged to delay retirement (“bonus-malus” system), and periods of non-work would be reduced in the pension calculation.
The 2025–2029 Federal Coalition Agreement calls for employers to provide occupational pension benefits to all employees, with a minimum employer contribution rate of 3% of pay by 2035. The tax treatment of occupational pension benefits would be changed to reduce the tax disadvantage of annuities compared with lump sum payments. In addition, a (to be determined) higher solidarity contribution rate (currently 0% to 2%) would be applied to accrued pension capital above 150,000 euros.
Under the proposed new bonus-malus system for retirements from 2026, social security retirement pensions of employees who retire after normal retirement age (NRA, currently age 66) with at least 35 years of insured employment would initially be increased by 2% per year of retirement after NRA, then by 4% from 2030, and by 5% from 2040. This pension bonus would replace the existing one, which is payable as a lump sum to those who retire up to three years after their early retirement eligibility date. Conversely, pensions of employees who retire before NRA with under 35 years of insured employment would initially be reduced by 2% per year of retirement before NRA, by 4% from 2030 and by 5% from 2040. Also from 2026, social security survivors’ pensions would be replaced by a survivors’ allowance payable for two years (up to four years for surviving spouses with dependent children), which could be combined with income from employment; current claimants would be granted a transition period to select between the old and new systems.
To strengthen the link between time worked and pension rights, the agreement proposes capping “assimilated” periods of non‑work that now are counted fully in the calculation of an individual’s social security pension. Starting in 2027, assimilated periods that total more than 40% of an individual's career would be excluded from the calculation, with the threshold gradually decreasing to 20% by 2031. However, socially useful assimilated periods (e.g., carer and sick leaves) would continue to be included fully in the calculation, and periods of long-term unemployment and non-work prior to retirement under certain programs (e.g., bridging pensions) would no longer be taken into account.
The reforms, which the government intends to legislate over the course of 2025, will be challenging to implement to say the least but would bring about significant changes to the country’s pension system if approved. The agreement also includes a number of pension reforms for the civil service and the self-employed, so the stakeholders to these reforms cover pretty much the entire workforce and most employers. Note: The agreement does not address the harmonization of supplemental pension plans in the private sector for salaried and hourly wage workers begun in 2014, now postponed to 2030, which is a separate huge challenge by itself.
Employers should monitor the progress of the agreement closely, especially as it concerns occupational pension benefits.
