EFRP MEETING MADRID BELGIAN ASSOCIATION OF PENSION FUNDS COUNTRY REPORT BELGIUM

EFRP MEETING MADRID A / Structure of Belgian Retirement Provisions  1 st pillar: PAYG legal pensions  2 nd pillar: supplementary, collective group insurance + pension funds  3th pillar: long term savings, individual

EFRP MEETING MADRID A/ Structure of Belgian retirement provisions

EFRP MEETING MADRID B/ Developments (1)  Political context = positive signals  PF established within CBA exempt from competitiveness law  Collective pension schemes based on capitalisation should be stimulated

EFRP MEETING MADRID B/ Developments (2)  Legal framework  Control legislation: 1999 => broadening of investment rules + revision of technical parameters  Multi campany PF: RD shortly due, will allow for smaller companies to jointly set up PF

EFRP MEETING MADRID B/ Developments (3)  Legal framework (2)  CDV/OCA: reporting of PF in line with euro- environment and changes to technical parameters and new investment framework

EFRP MEETING MADRID B/ Developments (4)  Legal framework (3)  Europe: progress towards directive  Important for ABPF  Freedom of investment + “prudent expert”  Security => seperation of assets of PF and sponsor  Level playing field => fiscal treatment

EFRP MEETING MADRID C/ Statistics (1)  CONTRIBUTIONS (bill.euro)  Pillar 1 = payments in PAYG system  62% private sector  28% public sector  9% self employed  Pillar 2  74% group insurance  26% pension funds  Pillar 3  87% life insurance  13% pension savings

EFRP MEETING MADRID C/ Statistics (2)  RESERVES (bill.euro)  Pillar 1 n.a.  Pillar 2  68% group insurance  32% pension funds  Pillar 3  80% life insurance  20% pension savings

EFRP MEETING MADRID C/ Statistics (3)  Asset mix  Bonds: decline  Stock: up => volume + price effect  Real estate: +/- 5%

EFRP MEETING MADRID C/ Statistics (4)  Return  1998: 17.2%

EFRP MEETING MADRID D/ Concerns + activities BAPF  Difficult environment  Complex regulation “appendix” of insurance companies  Legal / fiscal requirements abundant and untransparent  Different types of institutions in pillar 2  Need for distinct regulatory framework => concept 2000  Compilation of legal / fiscal dispositions, guidebook for establishing PF

EFRP MEETING MADRID E/ Outlooks  Belgium  Multi company PF  Government plans for adaptation of 2nd pillar  Europe  Cost effect of new regulation?  Level playing field?