In recent years, Flemish local authorities have increasingly started to rely on contractual employees, who receive a lower pension than their permanently appointed colleagues. In order to eliminate that difference and to continue to attract staff, most Flemish local authorities offer their contractual employees a supplementary pension. They have taken out group insurance for this with Belfius and Ethias.
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But they indicated in June that they would cancel the contract for those group insurance policies on New Year 2022. Both companies promised to fully guarantee the statutory minimum interest rate for supplementary pensions, which is 1.75 percent. But due to the ultra-low interest rates, that is gradually becoming unaffordable, the two insurers say.
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The Association of Flemish Cities and Municipalities (VVSG) worked out a solution together with OFP Provant, the pension fund of the province of Antwerp. They are supporting a new pension fund that offers a supplementary pension to some 90,000 employees at some 750 local authorities in Flanders. The boards contribute approximately 70 million euros annually to the Prolocus fund. This could develop into one of the largest pension funds in Belgium, although the VVSG emphasizes that the local authorities themselves decide whether to join.
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