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Official information and services: belgium.be Belgian Federal Public Services

Consolidated pension fund

For whom?

Employers affiliated with the consolidated pension fund

All local governments are in principle affiliated with the consolidated pension fund of the provincial and local governments for their established staff members. This applies for:

  • all provincial and local governments that were affiliated with pool 1 or pool 2 on 31.12.2011
    and
  • all local police districts that were affiliated with pool 5 on that date.

Are also affiliated with the consolidated pension fund:

  • a local government that no longer has any established staff members in its service, but for which the Federal Pensions Service (FPS) pays a public pension to its former established staff members;
  • every new local government (e.g. rescue areas, an autonomous municipal or provincial service, Public Social Service Centre affiliation under public law, ...) that:
    • was established after 31.12.2011 and
    • has established staff member in its service.

Are not affiliated with the consolidated pension fund:

  • The local governments that, within the framework of local autonomy, chose not to affiliate on 1.1.2012.

Provincial and local governments that were affiliated ex officio on 1.1.2012

The local governments that were affiliated with a pension institution or who had their own pension fund for their established staff members until 31.12.2011:

  • were ex officio affiliated with the consolidated pension fund for the provincial and local governments on 1.1.2012, unless
  • they informed the Minister of Pensions before 15.12.2011 by registered letter of their refusal to affiliate.

The ex officio affiliation was budget neutral for the local governments. The consolidated pension fund took over a volume of pensions that were already in effect that was equal to the pension contributions that the government was due to its established staff members in the year of affiliation.

Any more advantageous local pension schemes the local government awards its retired established staff members on the basis of a local pension regulation, remain guaranteed after the ex officio affiliation. The government must, however, fully bear the unconsolidated pension expenses. The FPS or pension institution sends the employer a separate invoice for the difference between the statutory pension and the legal pension scheme. The local government can never charge the consolidated pension fund for the provincial and local governments with the benefits of the more advantageous regulation.

The reserves the local government had built up in the past, were retained and were not transferred to the consolidated pension fund for the provincial and local governments. These reserves can be used to pay the pension contributions or to finance the pensions that were not transferred. The local government can have the reserves managed by a pension institution.

The local police districts that are affiliated ex officio

The local police districts and their active and retired established staff members are affiliated with the consolidated pension fund of the provincial and local governments. This is not the case for the established federal police personnel, among whom the former State Police and former CID members, who are affiliated with the Fund for the federal police pensions, which is also managed by the FPS.

The consolidated pension fund carries all pensions and pension shares that concern worked periods as an established staff member of the former municipal police (from before the police reform) or a local police district (after the police reform).

The pensions of the former municipal police that were already in effect upon the establishment of the integrated police pension fund on 1.4.2001, and that were carried by pool 1, 2, 3 or 4 until 31.12.2011, were transferred to the consolidated pension fund from 1.1.2012 onwards and are considered as a pension expense of the police district and not of the municipality.

Other local governments that were affiliated ex officio after 31.12.2011

Every local government that is established after 31.12.2011 or that for the first time has established staff members in its service after this date, is ex officio affiliated with the consolidated pension fund for the provincial and local governments. This was, among other things, the case for the rescue areas.

Local governments not affiliated with the consolidated pension fund

The following local governments were not affiliated with the consolidated pension fund for the provincial and local governments:

  • governments that had their own pension fund for their established staff members on 31.12.2011 or
  • that were affiliated with a provident institution.

They had to inform the Minister of Pensions before 15.12.2011 by signed letter that they did not want to affiliate.

The non-affiliated local governments handle the financing of their pensions themselves. They can opt for:

  • a repartition system;
  • a capitalisation system;
  • a mixed system.

The non-affiliated local governments can consign the management and payment of the pensions of their established staff members to a pension institution or to the FPS (on the basis of an agreement and for remuneration).

A non-affiliated government can, from 1 January of every calendar year, affiliate with the consolidated pension fund for the provincial and local governments.

Employees affiliated with the consolidated pension fund

All (active and retired) established staff members of the affiliated governments fall within the range of application, regardless of the date of the establishment.

Are also affiliated with the consolidated pension fund:

  • the regional collectors in the service of the Flemish and Walloon Regions.

Are not affiliated with the consolidated pension fund:

  • the retired established staff members of the affiliated governments whose pensions were not transferred or consolidated within the framework of the affiliation with the consolidated pension fund (from 1.1.2012 onwards) or with pool 2 (before 1.1.2012).

How to affiliate with the consolidated pension fund?

A non-affiliated government can, from 1 January of every calendar year, affiliate with the consolidated pension fund for the provincial and local governments.

A government that decides to affiliate with the consolidated pension fund has to inform the NSSO thereof by means of a signed letter. The letter specifies whether the government will consign the allowance, management and payment of the pensions to the FPS or a pension institution, and whether it will pay the pension contributions to the NSSO itself or cosign the payment of these contributions to a pension institution.

The NSSO estimates the amount of the wage bill the government will pay its established staff members in the affiliation year on the basis of the DmfAPPL details and provides the FPS with this estimate.

The government provides the FPS’s ‘Financial management civil service pension schemes’ service (email address: HB4@sfpd.fgov.be) with all the details necessary for the determination of the expenses of the retirement and survivor's pensions in the affiliation year. A register of the beneficiaries of the retirement and survivor's pensions or of the current pension shares on the date of affiliation, in order of their date of implementation, has to be delivered to the aforementioned FPS service and if necessary to the pension institution that will manage and pay the pensions. The register mentions the gross monthly amount on the date of affiliation for every pension and pension share. On the basis of these details, the FPS determines the provisory date of implementation on which the pensions and pension shares can be transferred for every government.

The FPS then determines, in the course of the year following the affiliation, the definitive date of implementation on which the pensions and pension shares can be transferred.

Managing and paying the pensions

A provincial or local government that is affiliated with the consolidated pension fund for the provincial and local governments can consign the management and payment of the pensions to the FPS or to a pension institution (e.g. Ethias, Ogeo Fund).

A pension institution is the institution for company pension provisions such as described in article 2, first member of the law of 27 October 2006 establishing the supervision of the institutions for company pension provisions or the insurance company as described in book II and III of the law of 13 March 2016 concerning the statute and supervision of the insurance and reinsurance companies with which the provincial or local government has concluded an agreement.

A provincial or local government that no longer wants to consign the management and payment of the pensions to a pension institution but to the FPS, must notify the FPS’s ‘Financial management civil service pension schemes’ service by means of a signed letter on 30 September preceding the year of transfer at the latest.

A provincial or local government that no longer wants to consign the management and payment of the pensions to the FPS but to a pension institution, must notify the FPS’s ‘Financial management civil service pension schemes’ by means of a signed letter on 30 September of the calendar year of the transfer at the latest.

The pension contributions: a basic pension contribution and an additional annual shortfall contribution

The pension contributions for the consolidated pension fund for the provincial and local governments consist of:

  • a basic pension contribution and
  • potentially an additional annual shortfall contribution.

The basic pension contribution:

  • must be paid by all local governments that are affiliated with the consolidated pension fund
  • is equal to a percentage of the wages of the established staff members subject to pension contributions.

For the period from 2012 until 2016, the basic pension contribution differed depending on the pension scheme the government was affiliated with until 31.12.2011, but the contribution rates were gradually harmonised. Since 2016, the basic pension contribution is fixed at 41,50 % for all local governments.

For the year 2017 and all following years, the Minister of Pensions fixes the basic pension contribution every year for the following three years on the basis of a proposition of the management committee for the pensions of the provincial and local governments of the FPS. The local governments are informed at the latest on 1 October of the basic pension contribution that will have to be paid in three years’ time.

The additional annual shortfall contribution only must be paid by the local governments that have been made responsible for their limited number of established staff members in proportion to the pension expenses of their former established staff members.

For these governments, the basic pension contributions that are collected on the limited wage bill of their established staff members do not suffice to finance the retirement and survivor's pensions of their former established staff members. They shift (a portion of) their own pension expenses on to the other participants of the solidarity scheme. Making these governments responsible consists in the consolidated pension fund charging these governments with (a portion of) the pension expenses in the form of an additional annual shortfall contribution that is calculated on an annual basis.

Annual investigations are carried out to determine whether the government owes an additional annual shortfall contribution and how much it amounts to, on the basis of the pension expenses of the former established staff members and of the wage bill of the established staff members of every local government.

The basic pension contribution

The legal basic pension contribution consists of an employee's contribution of 7,50 % and an employers' contribution that differed from 2012 up to and including 2015, depending on the pension pool the local government was affiliated with until 31.12.2011. Since 2016, the legislator has provided for a uniform basic pension contribution on the wages of the established staff member.

The table below shows how the legal basic pension contributions gradually were harmonised, depending on the pension scheme of application on 31.12.2011, until they amounted to 41,50 % for all affiliated local governments in 2016.

Legal basic pension contribution
Year Former Pool 1 Former Pool 2 Former Pools 3 and 4 Former Pool 5 Rescue Areas
2011 32 % 40 % / 27,50 % /
2012 34 % 41 % 34 % or 41 % 31 % /
2013 36 % 41 % 36 % or 41 % 34 % /
2014 38 % 41 % 38 % or 41 % 37 % /
2015 40 % 41 % 40 % or 41 % 40 % 41 %
2016 41,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2017 41,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2018 41,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2019 41,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2020 41,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2021 41,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2022 43 % 43 % 43 % 43 % 43 %
2023 44 % 44 % 44 % 44 % 44 %
2024 45 % 45 % 45 % 45 % 45 %
2025 45 % 45 % 45 % 45 % 45 %
2026 45 % 45 % 45 % 45 % 45 %

The legal basic pension contribution was reduced in the period from 2012 until 2025 by committing all available reserves.

The "Pool 1 Reserve fund" was built up in the past using surpluses in the pension contributions of the affiliates of the communal pension scheme and is solely used to reduce the basic pension contribution of the former pool 1 governments.

A portion of the other available reserves that was transferred to the ‘Sinking fund’ within the consolidated pension fund, was also used to give the governments a reduction in the legal basic pension contribution.

The legal basic pension contribution had already been reduced by using both reserves in the years 2012 up to and including 2015 and were further reduced by 3,50 % in 2016 and 2017 and by 3 % from 2018 up to and including 2025 for the governments of the former pool 1. In 2018-2021, the actual basic pension contribution amounted to 38,50 % for the governments of the former pool 1 and to 41,50 % for the other governments. In 2022, the percentages were respectively 40 % and 43 %, in 2023 41 % and 44 % and in 2024 and 2025 41 % and 45 %.

The table below gives an overview of the actual basic pension contributions from 2011 up to and including 2025.

Actual basic pension contribution
year former pool 1 former pool 2 former pools 3 and 4 former pool 5 rescue areas
(2011) (32 %) (40 %) / (27,50 %) /
2012 32,50 % 40,50 % 33 % or 40,50 % 29 % /
2013 34 % 41 % 35 % or 41 % 31 % /
2014 36 % 41 % 37 % or 41 % 34 % /
2015 38 % 41 % 39,50 % or 41 % 38,50 % 39,50 % or 4 %
2016 38 % 41,50 % 41,50 % 41,50 % 41,50 %
2017 38 % 41,50 % 41,50 % 41,50 % 41,50 %
2018 38,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2019 38,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2020 38,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2021 38,50 % 41,50 % 41,50 % 41,50 % 41,50 %
2022 40,00 % 43,00 % 43,00 % 43,00 % 43,00 %
2023 41,00 % 44,00 % 44,00 % 44,00 % 44,00 %
2024 42,00 % 45,00 % 45,00 % 45,00 % 45,00 %
2025 42,00 % 45,00 % 45,00 % 45,00 % 45,00 %

 

The additional annual shortfall contribution

General

An additional annual shortfall contribution is due if the own pension ratio (= OPR) of a local government during the calendar year exceeded the legal basic pension contribution. The own pension ratio of a government for a calendar year is equal to the proportion between:

  • Pension expenses (PE): the retirement and survivor’s pensions the consolidated pension fund carried for the former established staff members or their persons entitled, including the pension shares in these pensions at the expense of the consolidated pension fund;
  • Wage bill (WB): the wage bill of the active established staff members of the government subject to the pension contributions for the established staff members.

If a person successively worked for several governments affiliated with the consolidated pension fund for the provincial and local governments, the additional annual shortfall contribution of every government is calculated on the portion of the pension expense that applies to the duration of the admissible services.

To determine the additional annual shortfall contribution, the own pension ratio is compared to the legal basic pension contribution, and not to the actual basic pension contribution. A former pool 1 government that had its own pension ratio of 40,00 % in 2015 did not owe any additional annual shortfall contribution. A former pool 1 government that had its own pension ratio of 45,00 % in 2015 did owe an additional annual shortfall contribution.

Partial responsibility

A local government that has established staff members in its service is made partially responsible and only has to take on a portion of its individual pension expenses that are not covered by the basic pension contributions.

The additional annual shortfall contribution is a share in the difference between the individual pension expenses (paid to the former established staff members of the local government) and the yield of the basic pension contribution that was paid (by the local government). The percentage the local government has to take on by itself is called the responsibility coefficient (= RC). The balance is taken on by the consolidated pension fund for the provincial and local governments.

The responsibility coefficient is “equal” for all employers who have been made responsible, regardless of the pool the employer was affiliated with before 1.1.2012.

The additional annual shortfall contribution is “different” for every government because the pension expenses of the former established staff members and the individual wage bill of the current established staff members differ per government. The contribution equals the product of the responsibility coefficient with the difference between:

  • the pension expenses (PE) and
  • the basic pension contributions for the established staff members (BC% × WB).

When calculating the additional annual shortfall contribution for a local police district, the pensions of the municipal police that took effect before 1.4.2001 are included in the pension expenses.

Full responsibility

A local government that no longer has any established staff members in its service during a calendar year is fully made responsible. The wage bill of the established staff members equals zero, but the consolidated pension fund for the provincial and local governments still carries the pension expenses for its former established staff members. The government fully takes on its own pension expenses.

Established fire officers and responsibility

A specific calculation method is used for the established staff members of the fire brigade who within the framework of the fire brigade reform were transferred from a municipality or intermunicipal utility company to a rescue area. It ensures that the establishment of the rescue areas has no (positive nor negative) impact on the additional annual shortfall contribution of the municipalities that make up the area.

When calculating the additional annual shortfall contribution of a municipality or intermunicipal utility company, the municipality or intermunicipal utility company is expected to have remained the employer of the transferred staff, and to have paid the wages and basic pension contributions of the established fire officers. On the other hand, the pension expenses of the former staff members of the fire brigade that were of application at the time of the staff transfer to the rescue area, remain fully at the expense of the municipality.

The additional annual shortfall contribution of a rescue area is solely calculated on the pension contributions of the established fire brigade staff that were recruited by the rescue area itself. The pension contributions of the transferred established staff members are not taken into account. On the other hand, the pension expenses of the established staff members that were transferred by the municipality or intermunicipal utility company are fully attributed to the rescue areas, including the portion of the pension that concerns the years of service with the municipality.

The responsibility coefficient

The legal responsibility coefficient has been fixed at at least 50 %.

In a transition period from 2012 until 2015, DIBISS has used a portion of the other available reserves (Sinking fund) to finance a part of the additional employers’ contributions the local government that have been made responsible owe to the consolidated pension fund. By doing so, the legal responsibility coefficient could be reduced:

  • to 36,97 % in 2012,
  • to 38,26 % in 2013,
  • to 39,24 % in 2014,
  • to 45,41 % in 2015.

From 2016 up to and including 2021, the responsibility coefficient actually amounted to 50 %. In 2022, it was 52,94 % and in 2023 it was 70,17 %.

The procedure for the collection of the additional annual shortfall contribution

The additional annual shortfall contribution of a local government is determined on the basis of the FPS’s approved accounts for the calendar year (= N) in the month of June of the following year (= N + 1). The FPS determines on the basis of the exact amount of the pension expenses and the wage bill of the established staff members:

  • the responsibility coefficient for all municipalities that have been made responsible and
  • the additional annual shortfall contribution for all municipalities that have been made responsible.

During the course of the month September of the following year (= N + 1), the NSSO sends a message about the additional annual shortfall contribution to the e-Box of every government that is affiliated with the consolidated pension fund. If the government owes the contribution, it also receives an invoice in its e-Box stating the amount of the contribution the government has to pay by the end of December of the same year at the latest.

The monthly NSSO invoice does not contain an advance on the additional annual shortfall contribution. The FPS pre-finances the pension expenses of the former established staff members of the local governments that have been made responsible and that are not covered by the basic pension contributions. Every government is free to pay monthly advances of one twelfth of the estimated amount of the additional annual shortfall contribution.

Since June 2018, the additional annual shortfall contribution is collected monthly.

Every local government that owed an additional annual shortfall contribution for the penultimate year, has to pay this contribution by means of 10 monthly payments to the NSSO. The monthly instalments that have to be paid in the period from January up to and including October, amount to 1/12th of the probable amount of the additional annual shortfall contribution for the preceding year that is estimated on the basis of the amount of the contribution that was due for the penultimate year (= the last additional annual shortfall contribution charged to the government at that time).

In the months November and December, the government twice has to pay half the difference between the definitively fixed amount of the additional annual shortfall contribution for the previous year (which is calculated in September of the current year) and the sum of the 10 already paid monthly instalments. The government will receive a reimbursement if the difference results in a credit balance.

Since January 2019, the payment of the additional annual shortfall contribution has been brought forward by having the additional annual shortfall contribution paid in the year it applies to.

To limit the resulting additional financial burden for the governments that have been made responsible, the time of the additional annual shortfall contribution payment has been brought forward in phases:

  • from 2019 onwards, every year a greater portion of the additional annual shortfall contribution owing for the current year had to be paid in the form of (supplementary) monthly instalments.
  • at the same time, the monthly instalments for the payment of the additional annual shortfall contribution for the previous calendar year were reduced during this transition period.
  • since this transition period ended, the duration depending on the magnitude of the treasury needs of the consolidated pension fund, the monthly instalments that have to be paid only apply to the additional annual shortfall contribution of the current calendar year, as is the case since 2024.

Just as was the case for the 10 monthly instalments of the additional annual shortfall contribution for the previous calendar year (period from January up to and including October), the 12 (supplementary) monthly instalments of the additional annual shortfall contribution for the current calendar year (period from January up to and including December) are fixed at 1/12th of the probable amount of the additional annual shortfall contribution for the current year that is estimated on the basis of the amount of the last additional annual shortfall contribution charged to the government (= the additional annual shortfall contribution owing for the penultimate calendar year). In this way, the amounts of the monthly instalments and supplementary monthly instalments that had to be paid in 2019, 2020, 2021, … were fixed on the basis of the additional annual shortfall contribution that was charged in respectively 2017, 2018, 2019, …

Change in calculation method additional annual shortfall contribution - cost second pillar reduced

Article 12 of the law of 30 March 2018 adapted the calculation method for the additional annual shortfall contribution.

In particular, the provincial and local governments affiliated with the consolidated pension fund that provide a second pension pillar for their contractual staff members could, if this second pillar met certain conditions, deduct a part of the costs of this supplementary pension scheme from the additional annual shortfall contribution they owed from the year 2019 onwards.

The calculation of the pension contribution: examples

The calculation of the pension contribution

The total pension contribution of a government (TBC) that is affiliated with the consolidated pension fund equals the sum of the basic contribution and the additional annual shortfall contribution and is calculated using the formula:

TBC = BC + AASC = [BC % × WB] + [RC × (PE - BC)]

Whereby

  • TPC = total pension contribution
  • BC = basic pension contribution
  • AASC = additional annual shortfall contribution
  • BC % = basic pension contribution rate
  • WB = wage bill
  • RC = responsibility coefficient
  • PE = pension expenses

Example 1: Partial Responsibility

Every government that was affiliated with pool 1 until 31.12.2011, has a wage bill for the established staff members for the year 2015 that equals 1 000 000 euros and pension expenses of 700 000 euros. The fictitious responsibility coefficient amounts to 50 %.

Details

  • wage bill (WB) = 1 000 000 euros
  • pension expenses (PE) = 700 000 euros
  • basic pension contribution rate (BC %) = 40 %
  • responsibility coefficient (RC) = 50 %

First step: Calculating the basic contribution (after reduction)

  • BC without reduction = BC % × WB = 40 % × 1 000 000 = 400 000 euros
  • BC with reduction = 38 % × 1 000 000 = 380 000 euros

Second step: Calculating the responsibility on the basis of the own pension ratio

  • OPR = PE / WB = 700 000 / 1 000 000 = 70 %
  • As the own pension ratio (70 %) exceeds the legal basic contribution (40 %), the government is made responsible.

Third step: Calculating the additional annual shortfall contribution (with reduction)

  • AASC without reduction = RC × (PE - BC) = 50 % × (700 000 - 400 000) = 150 000 euros
  • AASC with reduction = 45,41 % × (700 000 - 400 000) = 136 230 euros

Fourth step: Calculating the total pension contribution

  • TPC = BC + AASC = 380 000 + 136 230 = 516 230 euros

Example 2: Full Responsibility

An intermunicipal utility company that was affiliated with pool 1 until 31.2.2011, no longer has any established staff members in its service in 2015 but does employ 53 contractors. The consolidated pension fund paid 120 661 euros in pensions to this government’s former established staff members. The employer must take on the full pension expenses of its former established staff members.

Details

  • wage bill (WB) = 0 euros
  • pension expenses (PE) = 120 661 euros
  • basic pension contribution rate (BC %) = 38 %
  • responsibility coefficient (RC) = 50 %

First step: Calculating the basic contribution

  • BC = BC % × WB = 38 % × 0 = 0 euros

Second step: Calculating the responsibility on the basis of the own pension ratio

As there are pension expenses but no basic contribution, the government is fully (= 100 %) made responsible for the pension expenses.

Third and fourth step: Calculating the additional annual shortfall contribution

The additional annual shortfall contribution owed amounts to 120 661 euros.

Restructuring a provincial or local government

Once affiliated with the consolidated pension fund for the provincial and local governments, the local government cannot cancel this affiliation. The affiliation is permanent and irrevocable.

Transfer to a government unaffiliated with the Fund

If a local government affiliated with the consolidated pension fund transfers one or several activities along with the established staff members employed in them to another (local or otherwise) government that is not affiliated with the fund, this second government must contribute to the pension expenses of the former established staff members of the original government.

The pension expenses that are transferred, consist of:

  • A share of all current pensions of the transferred former established staff members at the expense of the consolidated pension fund; the share in these current pension expenses equals the proportion between the wage bill subject to pension contributions of the transferred staff and the total wage bill of the original local government at the time of the transfer;
  • The future pension shares of the transferred active established staff members that concern the years of service with the original local government. No pension shares are at the expense of the consolidated pension fund for the provincial and local governments for these years of service.

Transfer to a government affiliated with the Fund

If a local government affiliated with the consolidated pension fund transfers one or several activities along with the established staff members employed in them to another (local or otherwise) government that is also affiliated with the fund, this restructuration is not always neutral for the calculation of the additional annual shortfall contribution (for additional information, please consult the notice concerning the impact of restructuring local governments on the additional annual shortfall contribution).

Notices