Belgium to progressively equalise occupational pension rights for blue collar workers and white collar employees
Belgian labour law has been built on the distinction between blue collar workers and white collar employees.
In 2011, the Belgian Constitutional Court ruled that this distinction was no longer appropriate with how work is organised today and therefore deemed it illegal to offer different employment terms and conditions to blue collar workers and to white collar employees.
Consequently, the Belgian government has to remove all differences in benefits based on the distinction between blue collar workers and white collar employees. The first issue to be addressed on the long road to harmonisation is occupational pension entitlements.
In Belgium, occupational pensions schemes are granted at industry level by collective bargaining agreement (“CBA”) and/or at company level in the framework of a pension plan (as part of the employment contract or by company collective labour agreement). Moreover, some companies must apply CBAs from two different industry bodies: a joint committee for its blue collar workers and another for its white collar workers. As a result, blue collar and white collar occupational pensions could be very different.
For instance, it was common to create occupational pension schemes for white collars or executives in order to close the large gap between the state pension for this group and their last earned salary. Blue collar unions have focused rather on negotiating salary increases or other benefits. However, since the new occupational pension Act of 2003, blue collar workers more often benefit from an industry-wide occupational pension scheme, whereas white collars are not covered (even when they belong to the same industry). When in 2003, 42,95 % of workers were benefiting from an occupational pension scheme, this rate reached 75% in 2013.
Phasing out of differences
An Act of 5 May 2014 (published to the Belgian State Gazette of 9 May 2014) establishes a legal framework implementing a phasing out of differences in occupational pension schemes by 1 January 2025.
Achieving this will not be easy: occupational pensions are diverse – industry-wide or company level schemes, DB, DC or cash-balance schemes, schemes managed by an insurer or by a pension fund; Belgian employers will have to foot the bill for the reform, with additional pressure coming from unions wanting to level up.
The keys to achieving the reform will be time, progressivity and social dialogue. The harmonisation will be implemented in three stages within a ten-year transitional period. Industries will be asked to find solutions so that all differences will be removed by 1 January 2025.
If you have any questions, please contact Elke Duden (+32 3 203 63 69).