Chapter VII: Old-age Chapter VII: Old-age
Applicable statutory basisRoyal Order No. 50 of 24 October 1967 and the Royal Order of 21 December 1967, with important modifications made by the Royal Order of 23 December 1996.
Basic principlesA system of current income financing ("pay as you go") based primarily on contributions.
Field of applicationCompulsory insurance for all wage and salary earners.
Exemptions from compulsory insurance for insignificant employmentNone.
ConditionsNone.
Career duration equivalent to 41 years (for women) and 45 years (for men).
Women: 61 years (the age is raised progressively to 65 during a transitory period running from 1997 to 2009);
Men: 65 years.
Age 60 for women and men; on the condition that 20 years of professional activity can be proved.
None.
BenefitsThe amount of earnings taken into account, the duration of insurance, family status and sex (until 2009).
For each year taken into consideration, a pension share is granted according to the following formulas:
Single or married without dependent spouse:
Married with dependent spouse:
S = reference salary (see category below).
Calculation of salary considered:
Years prior to 1st January 1955:
Years 1955 - 1980:
Years after 1980: gross earnings limited to BFR 1,383,993 (ECU 33,948).
On the condition that certain legal conditions will be met, the following periods of non-activity are generally taken into account: involuntary unemployment, contractual early retirement, certain periods of career interruption, incapacity for work, maternity rest, annual holiday periods, military service, recognised strikes, preventive detention, recognised studies, etc.
In the event of the presence of a dependent spouse, the household rate (75%) shall be applied (see above, "Calculation method or pension formula").
No supplements.
(however see Table X "Family benefits. Special cases. 2. Pensioners": special benefits for pensioners.)
None.
Guaranteed minimum pension for a complete career, as well as for the equivalent of 2/3 of a complete career (following stated amounts prorata):
This maximum amount does exist in theory when taking the annual earnings ceiling into account for the calculation basis:
Entitlement to retirement pension from aged 60, provided that a minimum career of 20 years can be proved. Calculation according to calculation methode for normal pension, see category above, "Calculation method of pension formula").
None.
AdjustmentAn automatic pension adjustment of 2% occurs if the average consumer price index varies by 2% in relation to the former pivot index.
Adaptation of the pension amount to changes in the general well-being by establishing an annual flat-rate increase or adaptation coefficient in the form of an allowance.
Partial pensionA law of 26 July 1996 for modernising the statutory pension schemes lay down the legal groundwork for establishing a part-time pension. Enforceable provisions have not yet been effected.
Accumulation with earningsOnce the pension has taken effect in 1998, the accumulation is authorised as long as earnings from a professional activity do not exceed BFR 287,760 (ECU 7,059) per year (gross income of salaried workers) or BFR 230,207 (ECU 5,647) per year (net income of self-employed). These amounts will be raised to BFR 431,640 (ECU 10,588) and BFR 345,311 (ECU 8,470) respectively if the pensioner has a dependant.
If the income from a professional activity surpasses the previously mentioned amounts by less than 15%, then the pension is reduced by a percentage of the pension amount that is equivalent to the percentage which is exceeded. With earnings in excess of 15%, the pension is not paid.
TaxationBenefits are fully liable to taxation.
No tax relief for incomes below a certain threshold. However, there is the possibility of a tax reduction.
The basic amount of the tax reduction corresponds to the tax that would be paid by a beneficiary who is neither in receipt of any taxable income nor has any dependants. Marital status is taken into account. The basic amount is determined according to total net income and the family status (single person, couple with or without children).
If these net income values are not exceeded, then tax reduction for social security benefits is not limited and social security benefits are consequently not subject to taxation.
Social security contributions from pension1. A 0-2% contribution of solidarity for the sum of statutory and non-statutory pensions.
2. A 3.55% pension reduction on the condition that this does not have the effect of reducing the monthly pension amount to below BFR 45,939 (ECU 1,127) or - without any dependants - to BFR 38,762 (ECU 951).