Belgium begins reviewing tricky pension reform
The pension reform review starts this week in Belgium. The minister of Pensions and Social Integration, Karine Lalieux (PS), has a double mission: to adjust last year's summer agreement, which promises to be expensive for public coffers as it is, and to propose additional measures as agreed with Prime Minister Alexander De Croo (Open VLD).
The current "Vivaldi" governing coalition gathers the liberals (Open Vld and MR), the socialists (PS and Vooruit), the greens (Groen and Ecolo) and the Christian democrats of CD&V. Besides pensions, the government, in the coming weeks, will discuss budget cuts and tax reform, which are also problematic.
Lalieux needs to find "budget-neutral" measures and new measures to ensure the long-term sustainability of pensions. And, at the same time, allow Belgium to respond to European criticism and to demand the release of a first tranche of funds from the European recovery plan (approximately €850 million).
Demographic change is starting to take its toll in Belgium: there are fewer active people, who contribute less or not at all, but the costs of an ageing population keep coming, with pensions and health insurance. The federal government will spend 65 billion euros on pensions this year, just under half of all social security spending.
For the Belgian newspaper De Standaard, Lalieux wants to refute the impression that the PS does not want this reform. "She even questions some taboos. The question remains whether everything is enough to keep pensions affordable," remarks the newspaper.
De Croo submitted a memorandum in December to limit the growth of these costs by tying early retirement to a minimum number of days worked. "The PS saw this as a 'breach of trust'", considered De Standaard. But Lalieux has now risen to the challenge and is looking for a way to include De Croo's proposal.
Public service pensions
Another taboo topic that should be tackled by the minister deals with the equalization system, according to which public servants' pensions increase according to the current salaries of civil servants.
De Croo proposed ending this equalization, which would "raise" almost 200 million euros to the Belgian State. On the other hand, Lalieux indicates the current system is actually "unfair and lacking in solidarity", because not all civil servants benefit from it. She proposes replacing the equalization with a potential increase of no more than half a percent for all civil servants' pensions and it would be financed with all the pensions.
Minimum pension and military
The Pensions minister also suggests harmonizing access to the minimum pension and changing the retirement of soldiers and train conductors, which De Croo wanted to exclude in his memorandum. Many countries in Europe have separate regulations for the military, but Lalieux reckons that few people benefit from this system.
The socialist coalition agreement spoke of an increase to 1,500 euros net of the minimum pension. The value eventually stood at 1,616 euros at the beginning of 2024, due to various indexes. According to Lalieux, discarding this latest increase would affect confidence in the system.
The debate promises to be long in the coming days. The coalition intends to complete this work by the end of February.
#FlandersNewsService | Belgian Minister of Pensions and Social Integration, Karine Lalieux, during a plenary session of the Chamber at the Federal Parliament in Brussels on 2 February 2023. © BELGA PHOTO (NICOLAS MAETERLINCK)