Voluntary Supplementary Pension Scheme for Employees
Vrij aanvullend pensioen voor werknemers, VAPW
Coverage
Voluntary participation
- All employees: in case the person does not obtain any (or a very low) supplementary pension with a plan set up by the employer or sector (see occupational pension schemes for employees), it is the voluntary choice of the employee to participate in the VAPW; participation can be stopped at any time by the employee.
Financing
General finances
- Personal pension plans based on contribution payments and capital revenues with minimum guarantee.
- A pension capital (system of capitalisation) based on the investment of deposits by the employer and/or person involved and increased by the investment returns.
Contribution payments
- Contributions paid by employee only (deducted from net salary); paid at regular intervals.
- No fixed share/contribu-tion rate; amount of contribution payments can be chosen freely within predefined range.
- No minimum contribution, but contribution ceiling: annual amount is EUR 1,630 (in 2021) or 3% of the gross salary received in the previous two years (if this exceeds the annual amount).
- The employer will deduct the employee's chosen contribution from the net salary and transfer it to the pension institution.
Tax support & incentivising strategies
- Tax reduction (between 30% and 40%) and insurance tax (except social pension commitments).
Administration
- Obligation to outsource to an external partner.
- The ‘Financial Services and Market Authority’ (FSMA) monitors pension institutions' compliance with social legislation as well as the financial health and appropriate organisa-tion of pension funds.
Qualifying Conditions
- The payment of the supplementary pension is linked to the statutory retirement pension (exceptions possible if provided for in pension regulations).
- Conditions are regulated in pension regulations.
Benefits
Pension payments
- The payment can be made via one lump-sum capital payment or spread over time with a periodic (monthly or annual) interest rate or, in certain cases, a combination of both.
- There is no guaranteed return in the case of the VAPW.
Taxation and social security contributions
- The benefits in capital are taxed at a lower tariff at a rate between 10% and 20%.
- In addition, there is a withholding of health care and solidarity contributions and municipal surcharges.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Voluntary participation
- All employees: in case the person does not obtain any (or a very low) supplementary pension with a plan set up by the employer or sector (see occupational pension schemes for employees), it is the voluntary choice of the employee to participate in the VAPW; participation can be stopped at any time by the employee.
General finances
- Personal pension plans based on contribution payments and capital revenues with minimum guarantee.
- A pension capital (system of capitalisation) based on the investment of deposits by the employer and/or person involved and increased by the investment returns.
Contribution payments
- Contributions paid by employee only (deducted from net salary); paid at regular intervals.
- No fixed share/contribu-tion rate; amount of contribution payments can be chosen freely within predefined range.
- No minimum contribution, but contribution ceiling: annual amount is EUR 1,630 (in 2021) or 3% of the gross salary received in the previous two years (if this exceeds the annual amount).
- The employer will deduct the employee's chosen contribution from the net salary and transfer it to the pension institution.
Tax support & incentivising strategies
- Tax reduction (between 30% and 40%) and insurance tax (except social pension commitments).
- Obligation to outsource to an external partner.
- The ‘Financial Services and Market Authority’ (FSMA) monitors pension institutions' compliance with social legislation as well as the financial health and appropriate organisa-tion of pension funds.
- The payment of the supplementary pension is linked to the statutory retirement pension (exceptions possible if provided for in pension regulations).
- Conditions are regulated in pension regulations.
Pension payments
- The payment can be made via one lump-sum capital payment or spread over time with a periodic (monthly or annual) interest rate or, in certain cases, a combination of both.
- There is no guaranteed return in the case of the VAPW.
Taxation and social security contributions
- The benefits in capital are taxed at a lower tariff at a rate between 10% and 20%.
- In addition, there is a withholding of health care and solidarity contributions and municipal surcharges.
Legal Basis: Law of 28 April 2003 on Supplementary Pensions for Employees, the tax regime of these pensions and some supplementary social security benefits (Wet betreffende de aanvullende pensioenen en het belastingstelsel van die pensioenen en van sommige aanvullende voordelen inzake sociale zekerheid); Law of 6 December 2018 on the Voluntary Supplementary Pension for Employees and different provisions concerning supplementary pensions (Wet tot instelling van een vrij aanvullend pensioen voor de werknemers en houdende diverse bepalingen inzake aanvullende pensioenen).