On April 1st, 2010, a new law went into effect that seeks to discourage employers' use of certain early retirement programs in Belgium by increasing the contribution rate for participating employers. Among the programs affected by the new law is the so-called "conventional bridge pension," which provides an employer-sponsored supplement in addition to unemployment benefits to older workers who are laid off from their jobs before reaching the normal retirement age of 65. (The minimum age to receive this supplement is 58 in most sectors, but workers can qualify as early as age 50 under special circumstances.) The supplement is paid until the worker reaches the normal retirement age and is eligible for an old-age pension under the public pay-as-you-go (PAYG) system. Also, the number of years a worker receives the supplement counts as years of service under the PAYG system.
When the "conventional bridge pension" and related early retirement programs were introduced in the 1970s and 1980s, the government's goal was to free up jobs for younger workers while ensuring a decent income to older workers who lost their jobs. Largely as a result of such generous early retirement programs, the Organisation for Economic Co-operation and Development (OECD) found that the labor force participation rate of older workers in Belgium ranks among the lowest of all OECD member countries.
The new law changes the employer contributions to these early retirement programs from a fixed amount that decreased as an employee approached the normal retirement age to a percentage of the employee supplement. (The supplement is equal to 50 percent of the difference between an employee's previous net earnings and the unemployment benefit.) The percentage paid by the employer varies depending on an employee's age at the time benefits are first received: For employees aged 50–51, employers contribute 50 percent of the gross monthly amount of the supplement; for older employees, the rate decreases to 40 percent if aged 52–54, 30 percent if aged 55–57, 20 percent if aged 58–59, and 10 percent if aged 60 or older. The contribution rate may be further decreased on a case-by-case basis for companies in financial difficulty.
Aside from these employer-sponsored early retirement benefits, workers can receive an early pension under the state-run PAYG system at age 60 with at least 35 years of contributions. (The retirement age for a full pension is age 65 with at least 45 years of contributions.) Workers contribute 7.5 percent of earnings and employers contribute 8.86 percent of payroll, with the government providing annual subsidies.
Sources: Social Security Programs Throughout the World: Europe, 2008; OECD Economic Surveys of Belgium, 2007 and 2009; "Het Conventioneel Brugpensioen," Rijksdienst voor Arbeidsvoorziening, 1 januari 2010; "Wijzigingen Brugpensioen vanaf 1 april 2010," Centrum voor Loonbeheer, 12 maart 2010; "Brugpensioen Duurder vanaf 1 april," Nieuwsblad.be, 30 maart 2010; "Aanvul. Vergoeding Brugpensioen, Toeslag Bovenop een WLH-Uitkering en Toeslag bij Tijdskredietuitk.," Acerta, 30 maart 2010.