Pension reform - state pensions employees: Royal Decree concerning the so-called equivalent periods

With respect to the state pensions of employees which enter into force as of 1 January 2013, a number of periods of inactivity ("equivalent periods") as of 1 January 2012 will only be taken into account in a limited way. The concrete implementation of these new rules on equivalent periods is determined in the Royal Decree of 27 February 2013, which was published in the Belgian Official Gazette of 8 March 2013.

Until recently, some periods of inactivity (such as time credit, unemployment, unemployment with company allowance (UCA - former bridging pension), ...) were taken fully into account for the calculation of the statutory pension, based on the normal fictional remuneration (the average of the last remuneration, limited to the maximum amount for the calculation of the statutory pension).

One of the most important reforms, introduced by the Butterfly Agreement, is that a number of equivalent periods as of 1 January 2012 will only be taken into account in a limited way for the calculation of the state pensions which enter into force as of 1 January 2013. With this arrangement, the government wishes on the one hand to facilitate and boost the reintegration of long-term unemployed workers, and on the other hand to keep older employees at work.

The concrete implementation of this measure has now been published in the Belgian Official Gazette of 8 March 2013.

Essentially, the new arrangement means that periods of career interruption and time credit, except for the "motivated" time credit and thematic leave, will only be taken into account for the calculation of the state pension for a maximum of 12 months. With regard to four other equivalent periods, the statutory pension will no longer be calculated based on the normal fictional remuneration, but based on the reference remuneration, which is used to calculate the so-called "minimal right per year of service". This "limited fictional remuneration" amounts to 22.189,36 EUR (index 136,09 on 1 December 2012) for a full year (312 days). It concerns the following four equivalent periods:

- the third period of unemployment (long-term unemployment);

- the regime of unemployment with company allowance until the month of the 59th birthday of the employee concerned;

- the semi bridging pension arrangements (so-called Canada Dry systems) until the month of the 59th birthday of the employee concerned;

- the "landing jobs" for employees of 50 years and older and similar reductions of employment in the context of career interruptions at the end of a career.

The R.D. includes a lot of exceptions to the previously mentioned general rules and it also contains a number of transitory provisions additional to those provided by the Act of 28 December 2011 and the Recovery Act of 20 July 2012 (cf. Newsletter of 13 January 2012 and of 6 July 2012).

> Action point:

Employees who (have to) enter into a regime of time credit, UCA, Canada Dry or a "landing job", should examine the impact on their statutory pension.