This is how you build up pension
The Belgian pension system is still a distribution system. This means that your pension will be paid by the people who work during the years that you are retired. However, the amount you will receive as a retiree does depend on your own career. The following factors are decisive.
1. Your status
Getting started as an employee, self-employed person or civil servant. That choice still has a major impact on your pension. In recent years, the pension of the self-employed has been seriously upgraded to the level of that of employees.
Permanent or statutory civil servants still enjoy the most advantageous statutory pension. However, permanent appointments will become the exception, contract officials the rule. Contractual officials accrue a pension like a private employee, with the difference that they hardly had access to a supplementary pension through group insurance. That should change in the future.
2. Your wages
The higher your salary, the more pension you will receive… up to a certain level.
- For a salaried worker is the annual wage that is taken into account per working year for the calculation of the pension, capped at EUR 58,447. Those who earn more, therefore, do not generate an additional pension.
- The situation is different for a civil servant. There, the wages of the years worked are not taken into account, but a reference wage (normally that of the last 10 years) is taken into account. This reference wage is multiplied by the number of assumable years of service and divided by 60. The maximum indexed amount taken into account for the calculation of a civil servant’s pension is 6,802 euros gross per month (March 2020).
- For a self-employed person The pension amount is calculated on the basis of the professional income (the amount on which the social security contributions were paid), for each year worked from 1984. For the years before, the self-employed person receives a flat-rate pension. The total pension is obtained by adding up the amount of all career years.
3. The length of your career
A full career is 45 years. Those who have only worked 42 years are entitled to a pension equal to 42/45ste. Since 2019, with the abolition of the career unit, the years worked above 45 career years are also taken into account for the calculation of your pension.
Anyone who can present a full career for the pension calculation today has only performed two thirds of this effectively. The rest is composed of assimilated periods. These are periods in which people have not worked (sickness, disability, unemployment, time credit, etc.), but which do count towards the calculation of the pension.
To prevent someone who has worked little from receiving more pension than someone who has worked all his life, the assimilation of certain periods limited. For example, the non-motivated time credit – which previously made it possible to take a sabbatical year, for example – no longer counts towards the pension since 2015. In the meantime, the system has also been completely abolished.
Other assimilated periods count less favorably than in the past for retirement. For example, long-term unemployment is no longer equated to the effective wage for the assimilated period, but on the basis of a minimum entitlement on an annual basis.
The conditions for eligibility for certain assimilated periods have also been tightened. For example, you must be 60 years old since 2019 and have a professional history as an employee of 25 years, if you want to gain access to end-of-career time credit at the end of your career, while you could before that at the age of 58 (or 55 with certain ).
4. Your family composition
If you live together legally or in fact, you cannot claim a family pension. Only if you are married, one of the partners can receive a family pension. Only 20 percent of current retirees receive a family pension. In that case, the pension will be increased by 25 percent.
However, this is only possible if the amount of the head of the family’s pension is higher than the sum of the two separate pensions. The pension services automatically investigate what is most advantageous in your case. If that is the pension of the head of the family, the individual pension of the ‘weakest’ partner is either suspended or deducted from the family pension.
Mind you, in the pension system of the civil servants do not have a family pension. If you or your spouse are a civil servant, you will both receive a pension as a single person anyway. Although a married retired civil servant whose spouse has no income of his own will be taxed more advantageously and thus have more net left over.