A lot of words have been written in the press concerning the new proposal of Law on Occupational Pensions (LOP) in Belgium. At this time we can tell you that there are still some major discussions going on. As such it is not obvious that the law will be voted before the summer recess of the parliament.

Most articles of the new law would have effect from January 1, 2003.

However, we do know that this new law will bring along some major changes to most of the companies where a complementary pension scheme is in place. This is why we want to draw your attention to one important issue that might require action before the law is voted, or immediately afterwards.

Individual pension promises: The new law will not allow employers to draw up individual pension promises for their employees within the period of 3 years before (early) retirement, bridging pension or similar conventional career ends. Moreover, as of the 6th month after the law has been published, it will only be possible to conclude individual pension promises for employees if a collective pension scheme exists for all employees within the company.

Subject to possible amendments to the draft bill with respect to the entry into force of the LOP provisions addressing the treatment of individual pension promises:

- there may be an opportunity to set up an individual pension promise before the law comes into force. Individual pension promises that have been contracted before the new law becomes operative will not fall within the scope of the Act,

- self-employed company key-men (directors etc.) will not automatically fall under the scope of the law, which means that the “old regime” of pension promises can continue for them.

Please do not hesitate to contact us in case you have further questions.