Employer does not have to pay for group insurance in 2019
The Supplementary Pensions Act (WAP) obliges employers who offer their employees group insurance to deliver an average return of at least 1.75 percent per year over the term of the contract. Until a few years ago, employers could still leave the return guarantee to the insurer that manages the group insurance, because the market interest rates were sufficiently high at the time. But due to the sharp fall in interest rates, insurers today only guarantee a return of 0.25 to 0.75 percent.
In addition to that guaranteed return, the insurers do offer a profit share, which depends on their investment results. Thanks to this profit-sharing, insurers were nevertheless able to achieve an annual return of 1.75 percent in recent years, so that employers did not have to make any additional payments.
That was also the case in 2019, according to a survey by De Tijd. Thanks to the good stock market climate, the profit participations in 2019 were able to compensate for the low guaranteed interest. Market leader AG Insurance offered the highest gross return of 2.45 percent, which equates to 2.25 percent net. The guaranteed interest of 0.75 percent will be lowered to 0.5 percent on April 1.
Vivium also achieved a net return of 2.25 percent with the Cash Balance Plan. Another group insurance of the P&V Group achieved a net return of 1.91 percent. At Belfius, the net return was 1.88 percent, at KBC and Baloise at 1.75 percent.
Exception
Only Allianz came out below the threshold with one of his two formulas. Within the Stability Plan, the gross return was 1 percent. The Stability Plan is an atypical formula because the guaranteed interest rate of 0.1 percent also applies to future deposits. For other group insurance policies, an interim adjustment of the guaranteed return has an impact on future deposits.
Only Allianz came below the 1.75 percent threshold with one of its two formulas.
“Due to the type of guarantee, the vast majority of affiliates in our Stability plan still enjoy historical guaranteed interest rates higher than 1.75 percent,” says Paul Moller of Allianz. “This is not the case for recent connections, where the return is lower than the WAP rate.”