Increase of the statutory return guarantee on group insurance from 01/01/2025

The FSMA has announced that the interest rate of the statutory return guarantee that must be applied to pension commitments for employees will be 2.50% from 01/01/2025. The interest rate of the statutory return guarantee has been 1.75 % since 2016.

What does the statutory return guarantee entail?

See also our article from early 2024 on this.

The statutory return guarantee constitutes a guaranteed minimum return for employees, borne by the employer.

In the case of a pension commitment of the fixed-contributions type financed by the employer, the member is entitled, at the moment of leaving the employer (their withdrawal), retirement or in the event of early payment of the benefits before their retirement or in the event of termination of the pension commitment, to the amounts paid by the employer, reduced by the costs limited to 5%, capitalised at the interest rates of the statutory return guarantee, i.e.:

- 3.25% until 31/12/2016, - 1.75% until 31/12/2024, - 2.50% from 01/01/2025

There is one exception to this principle. If one of the following events occurs during the first five years of joining (withdrawal of the member, retirement or payment of the benefits before retirement, termination of this pension commitment), the capitalisation of the employer contributions provided above at the interest rates of the statutory return guarantee is replaced by an indexation on the basis of the consumer price index, if this leads to a lower result.

In the case of personal financing by the member, they are entitled, at the moment of their departure from their employer (their withdrawal), their retirement or in the event of early payment of the benefits before their retirement or in the event of termination of the pension commitment, to the amounts paid by the member, capitalised at the interest rates of the statutory return guarantee, i.e.:

- 3.75% until 31/12/2016, - 1.75% until 31/12/2024, - 2.50% from 01/01/2025.

How are the payments capitalised?

If the capitalisation method applied within the framework of the pension commitment is the so-called “horizontal” method. According to this method, in the event of a change in the interest rate of the statutory return guarantee: the old interest rate applies to the contributions that were due before the change in the interest rate until the earliest of the following events: withdrawal, retirement or payment of the benefits before retirement, termination of the pension commitment; and the new interest rate applies to the contributions that are due from the date of the change until the earliest of the following events: withdrawal, retirement or payment of the benefits before retirement, termination of the pension commitment.

If the capitalisation method applied within the framework of the pension commitment is the so-called “vertical” method. According to this method, in the event of a change in the interest rate of the statutory return guarantee:

the old interest rate applies to the contributions that were due before the change in the interest rate, and the new interest rate applies to the contributions due from the change in the interest rate as well as to the contributions due at the old interest rate that have been capitalised up to the change.

What is the effect of this change on the pension plan in my organisation?

Feel free to contact one of our advisers.

Last update: 21/11/2024