In Belgium, everyone has a right to a state pension. You too. This is guaranteed by the Belgian government.
This state pension is paid via a redistributive system. How does this work?
The working population pays the pensions of those who have retired, through the social security contributions payable on gross salaries.
It is a good principle. However, this system is under great strain. You probably know the reasons why:
1. The size of the working population that must pay your future pension is declining.
An ever smaller proportion of the population in Belgium is economically active. This situation is unlikely to change in the immediate future. After 2030, fewer than one person in every two will be active on the labour market.
2. Over that same period, the number of pensioners will increase.
Between 2010 and 2030 the majority of baby boomers will retire. This will lead to a shortfall in pension funding. Making up this shortfall will not be easy. Given the sharp fall in the birth rate since 1965, not everyone leaving the labour market will necessarily be replaced by an economically active individual.
3. The average Belgian retires too early.
The official retirement age is 65. In practice, however, not many people work beyond the age of 55 in Belgium. On average, we work until we reach the age of 57. The European average age is 61.
4. We are living longer. The average Belgian woman lives until the age of 82.4; for men this is 76.5. The overall outcome is that we are retired for longer.
5. To fund your pension, the Belgian government has few alternatives.
With the recession, our public debt – already very high – is rising still higher. There are no budget surpluses to finance the fund for old-age benefits (Fonds de vieillissement/Zilverfonds). Belgium currently has the worlds' third-highest tax burden. Raising taxes even higher is no solution.
Conclusion: if you are looking for security, you should look into supplementary ways of funding your twilight years.
You need the best advice available on your pension.