Belgium to progressively equalise occupational pension - PDF document

Belgium to progressively equalise occupational pension rights for blue collar workers and white collar employees 1 May 2014 Belgium to progressively equalise occupational pension rights for blue collar workers and white collar employees. This progressive approach aims at guaranteeing legal certainty, avoiding the huge financial costs that a hasty harmonisation would entail, preserving the definite objective of democratising the occupational pensions and granting enough time to the social partners to remove the differences and adapt gra dually to the new system. Three stages For the periods of work before 1 January 2015, differences of treatment in occupational pension schemes are not regarded as an illegal discrimination. Between 1 January 2015 and 31 December 2024, a “standstill” prin ciple applies. During this transitional period, differences of treatment will not be considered as illegal discrimination provided that these differences existed prior to 1 January 2015 and that the employers concerned commit to a harmonisation process. E mployers will only be able to modify their current pension schemes if that modification reduces the existing difference between the two categories of workers. As from the cut - off date of 1 January 2025, any differences in an occupational pension scheme will be regarded as an illegal discrimination. Those discriminated against will therefore be entitled to the benefits of the advantaged category and/or to be gran ted damages equalling the lost benefits. Nevertheless, when a scheme in force on 1 January 2015 is modified or replaced before the cut off date in order to reduce the existing differences, the affiliated workers have the right to object to participating in the new/modified scheme and to keep being affiliated to the old scheme (unless a CBA makes it mandatory to affiliate to the new/modified scheme). The objecting affiliated workers will, however, keep the possibility of joining the new modified – and pote ntial less beneficial – scheme later on when it is again modified or even when it is replaced. Contents Three stages 1 Priori ty given to industry - level negotiations 2 Tailor - made instrument 3 Belgium to progressively equalise occupational pension rights for blue collar workers and white collar employees 2 As a result of this grandfathering clause, differences in occupational pension schemes will long continue to exist in the Belgian pensions landscape, even after the cut - off date. This clause is, however, required to preserve the acquired rights of the already affiliated workers when the industry - wide organiser or the employer has no choice but to level down the pension benefits to harmonise them. It is obvious that most white collar employees will opt out of the new (defined contribution) pension schemes as they will most likely be less beneficial than their current defined benefit scheme. As for schemes taken over by a purchaser as part of a transfer of an un dertaking or a merger, a difference of treatment can be maintained during the standstill period provided that this difference existed before 1 January 2015. The schemes will have to comply as well with the new standards by 1 January 2025. The grandfatheri ng clause also applies in this case. Finally, it must be noted that occupational pension schemes are in principle not mandatory as such; to the extent that no CBA applies, an employer may even consider closing down its pension scheme and grant different b enefits. We emphasise that this harmonisation does not prevent industries or employers from granting different pension benefits to their workers to the extent that the criteria used comply with the anti - discrimination legislation (e.g. HR job qualificatio ns such as Hay - classification). Let us hope that the principles of the standstill period can be applied in practice since, as all pension professionals know, it can be difficult to assess, over a long - term period and with no idea of how careers will evol ve, which pension scheme or benefit is more advantageous and therefore, when a difference is really reduced or increased. Priority given to industry - level negotiations In the first phase, the social partners are empowered with implementing the harmonisat ion. This is logical since in Belgium most remuneration and working conditions are determined at industry level in joint committees. Negotiations will then begin at industry level, between the concerned joint committees, with the view of reaching an agree ment which organises the abolition of the differences of treatment by 1 January 2025. This agreement has to be settled in a industry - level CBA before 1 January 2023. The progress of the industry - level discussions will be monitored at national level every two years by means of a reporting system. Industries failing to harmonise by 1 January 2023 will face sanctions. After 1 January 2023, companies will be responsible for implementing the harmonisation at company level. In the meantime, they can either choo se to wait for the results of the industry - level discussions or begin their own harmonisation while keeping an eye on the industry - level negotiations in order to ensure that they are in compliance. Belgium to progressively equalise occupational pension rights for blue collar workers and white collar employees 3 Tailor - made instrument In Belgium, all joint committee s, which operate at industry level, can implement an occupational pension scheme for their workers by concluding a joint committee level CBA. Under current legislation, a joint committee can only conclude a CBA regarding its own field of competence. Yet, t his can be a problem when a blue collar joint committee and another for the white collar employees of the same industry have to set up a common occupational pension scheme. The new system allows the joint committees to have a common occupational pension s cheme organiser that each of them appoints via its own CBA. As a result, several joint committees can now collaborate to create a common occupational pension scheme for their blue collar workers and white collar employees. Author: Elke Duden and Florence Thirion This publication is intended merely to highlight issues and not to be comprehensive, nor to provide legal advice. Should you have any questions on issues reported here or on other areas of law, please contact one of your regular contac ts at Linklaters. © Linklaters LLP. All Rights Reserved 2013. Please refer to www.linklaters.com/regulation for important information on the regulatory position of the firm. We currently hold your contact details, which we use to send you special reports s uch as this and for other marketing and business communications. We use your contact details for our own internal purposes only. This information is available to our offices worldwide and to those of our associated firms. If your details are incorrect or have recently changed, or if you no longer wish to receive this newsflash or other marketing communications, please let us know by e - mailing marketing.belgium@linklaters.com Contacts For further information please contact: Elke Duden Counsel, Employment +32 3 203 6369 elke.duden @linklaters.com Florence Thirion Associate, Employment +32 2 501 9217 florence.thirion @linklaters.com Rue Brederode 13 B - 1000 Brussels Telephone (+32) 2 501 94 11 Facsimile (+32) 2 501 94 94 Linklaters.com Belgium to progressively equalise occupational pension rights for blue collar workers and white collar employees Issue  2 0 4 / / Author: Elke Duden and Florence Thirion This publication is intended merely to highlight issues and not to be comprehensive, nor to provide legal advice. Should you have any questions on issues reported here or on other areas of law, please contact one of your regular contacts at Linklaters. © Linklaters LLP. All Rights Reserved 2013. Please refer to www.linklater s.com/regulation for important information on the regulatory position of the firm. We currently hold your contact details, which we use to send you special reports such as this and for other marketing and business communications. We use your contact detail s for our own internal purposes only. This information is available to our offices worldwide and to those of our associated firms. If your details are incorrect or have recently changed, or if you no longer wish to receive this newsflash or other marketin g communications, please let us know by e - mailing marketing.belgium@linklaters.com Start of Back Page This is a separate section and text must be added to this page separately from the first section. The back page content must be made to fit on this one page.