Federal government’s pension measures curb ageing costs, study committee says
The pension measures on which the federal government is working are slowing the rise in social spending, affecting pensions and healthcare, the Belgian Study Committee on Ageing notes in its latest annual report. On the other hand, there are social consequences because the measures lead to lower pensions, especially for civil servants and employees.
Social spending is on the rise due to the ageing population. According to the study committee, it will increase from 25.8 per cent of gross domestic product (GDP) in 2024 to 27.5 per cent in 2070.
The difference in total social spending between 2040 and 2070 will amount to 1.7 percentage points of GDP. This difference represents the long-term budgetary costs of the ageing population.
In last year's report, this was 3.6 points for this period. Compared to the 2024 report, this increase is therefore smaller - a difference of 1.9 percentage points of GDP - due to the measures planned by the government for social benefits, pensions in particular.
"The government's reforms are not easy but extremely necessary"
Looking at pensions alone, the budgetary costs will decrease by 1.8 percentage points of GDP between 2024 and 2070 as a result of the pension measures.
This difference is “not insignificant”, said Greet T'Jonck, chair of the Belgian Study Committee on Ageing. The budgetary cost of pensions will continue to rise, but to a lesser extent. The impact is particularly noticeable in the pension schemes for employees (-0.9 percentage points of GDP) and civil servants (-0.8 points).
The government "will halve the increase in ageing costs”, said Pensions minister Jan Jambon at the presentation of the report. He said the government's reforms “are not easy” but “extremely necessary” due to “the very unfavourable budgetary situation”.
Pensions minister Jan Jambon © BELGA PHOTO JAMES ARTHUR GEKIERE
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