New measures regarding occupational pensions for self-employed company leaders

Transcription

1 February 2016 New measures regarding occupational pensions for self-employed company leaders Title 4 of the Act of 15 May 2014 (hereunder the OPACL - Occupational Pensions Act for Company Leaders ) introduced a minimal legal social framework with respect to occupational pensions for self-employed company leaders. Recently, the Act of 18 December 2015 introduced new measures regarding occupational pensions, of which some are applicable to occupational pensions for self-employed company leaders as well. This Act aims to strengthen the complementary character of occupational pensions with respect to state pensions, the first being considered as a necessary complement to the second. In this respect, the legislator: (i) (ii) clarified the notion of retirement age to be found in pension rules, with a view to aligning such retirement age with the statutory retirement age ( âge légal de la pension / wettelijke pensioenleeftijd ); ensured that the point at which occupational pension benefits are paid out corresponds to the point at which the affiliated company leader effectively retires; and Table of contents 1 Social aspects of occupational pensions for self-employed company leaders (OPACL) 2 New measures (recent amendments to OPACL) 2.1. Statutory retirement age 2.2. Payment of occupational pension benefits 2.3. Prohibition of favourable calculation methods for early payment of occupational pension benefits (iii) prohibited the application of favourable calculation methods for early payment of occupational pension benefits. The formal modifications to be brought in to pension regulations (in the case of collective pension schemes) or to pension agreements (in the case of individual pension commitments) as a result of these new measures have to be implemented by 31 December 2018 at the latest. Before giving you an overview of these new measures, we outline below the main principles applicable as regards the social aspects of occupational pensions for self-employed company leaders. New measures regarding occupational pensions for self-employed company leaders 1

2 1 Social aspects of occupational pensions for self-employed company leaders (OPACL) Pension schemes for self-employed company leaders are governed by a pension regulation/agreement. The latter must specify the age of retirement under the scheme. Save for some exceptions, the pension scheme s organiser is bound to entrust the execution of the pension scheme to a pension institution, i.e. an insurer or a pension fund ( externalisation obligation). The Financial Services and Markets Authority (hereunder the FSMA ) is in charge of supervising the application of the OPACL s provisions. In this respect, the pension scheme s organiser has information duties towards the FSMA. The pension scheme s organiser has transparency obligations towards the FSMA and the affiliated company leaders (these obligations are implemented through reporting). Both the pension scheme s organiser and the pension institution have stringent information duties towards the affiliated company leaders. Upon conditions, the pension regulation/agreement may provide for the possibility for the affiliated company leader to benefit from an advance payment of benefits, to pledge ( mettre engage / inpandgeven ) his/her pension rights or to allocate the surrender value ( valeur de rachat/ afkoopwaarde ) for the reconstitution of a mortgage loan. Failure to comply with the provisions of the OPACL may lead to criminal sanctions. Disputes relating to occupational pensions for self-employed company leaders (which have arisen as from 29 June 2014) are in principle subject to a five-year statute of limitation, with a unified starting point. The OPACL does not contain statutory or default rules regarding: (i) (ii) (iii) (iv) any mandatory affiliation age; the consequences of the exit of affiliated company leaders (e.g. whether vested reserves can be transferred to other pension institution); a statutory return being applicable to the premiums paid under the scheme (in practice, return is subject to the freedom of the parties); and any death coverage in case affiliated company leaders cease to be company leaders within the company of the pension scheme s organiser or cease to work for this organiser (in practice, parties to an occupational pension scheme for self-employed company leaders are therefore free to provide something in this respect). New measures regarding occupational pensions for self-employed company leaders 2

3 2 New measures (recent amendments to OPACL) 2.1. Statutory retirement age The term statutory retirement age ( âge légal de la pension / wettelijke pensioenleeftijd ) is now defined by the OPACL, by reference to the relevant legislation which lays down the age on which one is entitled to a state pension (the so-called first pillar of pension ). Until 1 January 2016, upon certain circumstances, the retirement age prescribed in the pension regulations/agreements might still be lower than the statutory retirement age. This will change in future. As for newly established pension schemes (i.e. established as from 1 January 2016), the retirement age prescribed in the pension regulation/agreement may not be lower than the statutory retirement age in force. As for existing pension schemes, as regards company leaders whose affiliation to the scheme starts from 1 January 2019, the retirement age prescribed in the pension regulation/agreement may not be lower than the statutory retirement age in force. Additionally, if the retirement age prescribed in the pension regulation/agreement existing on 1 January 2016 is amended, such retirement age may not be lower than the statutory retirement age in force at the time of the amendment Payment of occupational pension benefits Before 1 January 2016, as a general principle, a company leader affiliated to an occupational pension scheme was entitled to the payment of his/her occupational pension benefits (i) at the time of his/her retirement ( au moment de sa retraite / op het ogenblik van zijn pensionering ) or (ii) as from the time he/she reached the age of 60, provided that the pension regulation/agreement expressly provided for this possibility. Since 1 January 2016, occupational pension benefits may be paid out as from the retirement ( mise à la retraite / pensionering ) of the affiliated company leader only. The term retirement is now defined by the OPACL, it being the effective starting date of the state pension related to the professional activity in the framework of which the pension benefits concerned have been accrued (in the case at hand, the pension regime for self-employed people). One exception remains: where the affiliated company leader continues working beyond (i) the legal retirement age or (ii) the age when he/she qualifies for early retirement (i.e. this person does not effectively retire although he/she meets the requirements), he/she is entitled to request the payment of his/her occupational pension benefits at one of the abovementioned dates ((i) or (ii)) provided that the pension regulation/agreement expressly allows it. In order not to affect the legitimate expectations of affiliated company leaders who were about to be entitled to the payment of their occupational pension benefits, transitory measures have been provided. New measures regarding occupational pensions for self-employed company leaders 3

4 Affiliated company leaders aged 55, 56, 57 or 58+ in 2016 may request the payment of their occupational pension benefits respectively as from the age of 63, 62, 61 and 60 (even if, at this age, they are not effectively retiring), provided that the pension regulation/agreement, as existing before 1 January 2016, allows for this possibility of early payment. The terms of the existing pension regulations/agreements will therefore need to be observed. Age in 2016 Age required for the payment (if provided in the pension regulation/agreement) It should be noted that the pension scheme must continue to be in force until the retirement of the affiliated company leader (except if the pension scheme is wound up in the meantime), even if this retirement occurs after the affiliated company leader reached the statutory retirement age. As regards company leaders who are retired but resumed working and benefit, on 1 January 2016, from a pension scheme for self-employed company leaders, their pension rights must continue to be accrued as long as they are a company leader within the company of the pension scheme s organiser and insofar as the pension regulation/agreement allows for this possibility. This will no longer be the case in future for retired people who resume working. For the time being, affiliated company leaders must inform the pension institution of their retirement at the latest 90 days before this retirement. As from 1 January 2017, this obligation will be taken over by Sigedis (DB2P). It may be concluded that the timing of the payment of occupational pension benefits is now connected with the point at which the affiliated company leader effectively retires and no longer, as it used to be, with the retirement age prescribed in the pension regulation/agreement. Additionally, as for advance payment of benefits, pledging ( mise en gage / inpandgeving ) of pension rights or allocation of the surrender value ( valeur de rachat / afkoopwaarde ) for the reconstitution of a mortgage loan, which is agreed upon after 1 January 2016, the term age may not be lower than the statutory retirement age. New measures regarding occupational pensions for self-employed company leaders 4

5 2.3. Prohibition of favourable calculation methods for early payment of occupational pension benefits As of 1 January 2016, any provisions in pension regulations/agreements promoting early payment of pension benefits will be regarded as null and void. Such provisions are those that aim, or have as result, to: reduce or remove the consequences of a retirement before the statutory retirement age, in terms of amount of occupational pension benefits; reduce or remove the consequences of the fact that the company leader ceases to be a company leader within the company of the pension scheme s organiser, in terms of amount of occupational pension benefits; and grant additional advantages due to the retirement or the fact that the company leader ceases to be a company leader within the company of the pension scheme s organiser; Contacts For further information please contact: Elke Duden Counsel elke.duden@linklaters.com Florence Thirion Associate florence.thirion@linklaters.com it being understood that these measures lead to an increase in the vested reserves and/or the acquired benefits or any other additional advantage as a consequence of the fact that the company leader retires or ceases to be a company leader within the company of pension scheme s organiser. This prohibition is not applicable to those affiliated company leaders who reach the age of 55 at the latest on 31 December Other additional transitory measures are applicable. The implementation of this new prohibition may in any case not result in a decrease of the affiliated company leader s vested reserves, as existing on 1 January 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 Please refer to 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 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 ing marketing.belgium@linklaters.com Rue Brederode 13 B Brussels Telephone Facsimile Linklaters.com New measures regarding occupational pensions for self-employed company leaders 5