What is the issue?

New legislation on extra-legal pensions has been introduced. The goal of this legislation is three-fold:

  • to avoid burdening employers with a huge financial cost;
  • to protect the goals of the law on extra-legal pensions (namely to increase the number of workers benefiting from an extra-legal pension scheme); and
  • to give unions and employers time to negotiate the necessary amendments to industry-level pension schemes.

In consideration of the advice given by Belgium’s National Labour Council in February 2014 the gradual removal of the difference in treatment of blue collar and white collar workers in terms of extra-legal pension benefits will take place in three periods as follows:

  • the first period runs up to January 1, 2015. All differences in treatment that derive from periods of employment in this period will remain in place and will not have to be removed.
  • On January 1, 2015 a “standstill” period will commence. During this standstill period, any new extra-legal pension scheme shall not distinguish between blue collar and white collar workers and any existing extra-legal pension scheme shall not widen any different treatment of blue collar and white collar workers. During this period the (existing) differences in treatment will not be unlawful, but employers will have to implement a gradual plan leading to harmonized treatment by January 1, 2025.
  • From January 1, 2025 (the “cut-off date”), any extra-legal pension scheme may not distinguish between blue collar and white collar workers. For the extra-legal pension schemes introduced by CBA at industry-level, the cut-off date is set two years earlier: at January 1, 2023. If the industry-level negotiations do not result in the conclusion of a CBA by January 1, 2023, a Royal Decree will determine the measures implementing the harmonization.

What should Employers do?

Employers can simply wait for the result of the industry-level negotiations before adding harmonization of the treatment of blue collar and white collar workers in their extra-legal pension scheme. However, at industry-level CBAs are only negotiated every two years and cover an array of subjects including immediate salary increases. Employers may therefore wish to start to evaluate the cost of different scenarios aiming at “equalizing” the extra-legal pension of blue collar and white collar workers without waiting for the result of the negotiations at industry-level.