Individual Pension Commitment

Are you a self-employed business owner? Opt for a top-drawer five-star pension … paid by your company.

What is the Individual Pension Commitment (I.P.C.)?

The I.P.C. is a pension plan from AG Insurance specifically designed for self-employed business owners. The company pays the premiums and can immediately deduct them from its tax bill. You yourself receive a comfortable lump sum when you reach retirement age.

Advantages

  • Tax-deductible: the company can, under certain conditions, deduct the premiums from corporation tax.
  • Guaranteed: your plan remains intact, whatever happens (bankruptcy, merger, restructuring, if you leave the company, etc.).
  • Property financing: the policy can be used to purchase, build, convert, repair, or renovate a property within the European Economic Area.
  • Flexibility: premiums are not fixed for the term of the policy. If you wish, premiums may vary according to changes in your salary, but always within certain limits (the rule of 80%).
  • Profit-sharing bonus: your I.P.C. premiums may benefit from a profit-sharing bonus in addition to the guaranteed rate.
  • Extended cover possible: if you wish, additional risks can also be covered (a replacement income if you become unfit for work, repayment of I.P.C. contributions during the period when you are unfit for work, capital sum paid on death or capital sum paid on accidental death).
 

 

 

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The objective of your Individual Pension Commitment is to provide you with an additional lump sum on retirement. How large this lump sum will be depends on the premiums paid and the rates at which the premiums were invested.

 

If you die before expiry of the policy, we pay at least 100% of the reserve already built up to the beneficiary you have designated in your policy.

 

The only restriction on your Individual Pension Commitment for the tax deduction of premiums is an upper limit: when you retire, the total of your legal pension, your I.P.C. and any other additional pension plans you may have converted into an annual annuity, may not exceed 80% of your last normal gross annual pay, taking your whole career into account.

Expand your Individual Pension Commitment by adding additional cover:

  • fix a minimum lump sum to be paid if you die prematurely
  • decide the supplementary death benefit to be paid in the event of accidental death
  • opt for replacement income if you become unfit for work
  • get refund of premium payments during a period of disability, while retaining full coverage

We invest all your premiums the same day that they are paid by your company. The rate that will be applied for the term of the policy will be the rate prevailing at the time the premiums are paid. You may also benefit from a profit-sharing bonus.

All the premiums can be deducted in full from corporation tax as business expenses, resulting in an immediate reduction in the tax liability of your company. The rule of 80% must of course be respected.

 

Advantageous taxation on maturity

Your capital is subject to an advantageous rate of 16.5% on maturity, if you take the capital between the ages of 62 and 64. The tax applied is only 10% if you work to the age of 65 or over and if you do not receive payment of the pension capital until that age. If you take the capital at the age of 61, tax of 18% will be applied, and at the age of 60, the rate is 20%. No final tax is due on profit-sharing bonuses. This information is based on Belgian tax legislation in force on 1 June 2012 and may therefore be subject to change.

Jurgen is 35 years old. He manages his own office of chartered accountants and earns a salary of EUR 40,000 per year.

Jurgen has already been working in his office as a self-employed individual for five years. He worked for five years prior to that as a salaried employee. He had no pension agreement at that time, which allows him to include these years within the scope of his individual pension scheme (EIP [Engagement Individuel de Pension]), a Branche 21 life insurance product.

 

According to the 80% rule, Jurgen can accumulate capital totalling a maximum of EUR 257,494.23. His company wants to make the maximum premium a deductible. It pays an annual premium of EUR 5,270.93 (including tax) into an individual pension scheme (EIP) in order to accumulate a pension capital of EUR 257,494.23. This capital will be paid out when Jurgen reaches 65.

 

Jurgen also wishes to protect himself and his family against financial consequences if he is rendered unable to work by illness or an accident. For this reason, he is opting for the supplementary insurance module "premium repayment". In other words, the premiums that would have been paid into his EIP during the period that he is unable to work will be reimbursed to his company without altering the coverage. To benefit from this additional cover, the company pays just EUR 141.41 per year.

 

To give his family even better protection, Jurgen also wants the ability to access his pension fund while he is unable to work. He is aware that all that he will actually be able to access from the INAMI will be a small amount of legal compensation for the duration of his illness or the period that he is unable to work due to an accident. He opts for an annuity of EUR 25,000. His office contributes a risk premium of EUR 670.74 per year towards this.

 

The premiums that Jurgen's company pays for his EIP are deductible from the company's tax so long as the 80% rule is respected.

 

When Jurgen turns 65 and his individual pension scheme matures, his capital will have amounted to EUR 257,494.23 (which, apart from a technical tax rate of 2% – a gross annual rate of income tax on the premium minus taxes and admission fees – will remain identical for the duration of the agreement). To this will be added any amounts due from the profit-sharing bonus.

 

This example is intended merely as an illustration and is neither binding on the client, nor BNP Paribas Fortis nor AG Insurance. It is based on the conditions valid on 1 July 2014 and on a fictitious situation.

 

Leaflet (pdf, FR)General terms and conditions (pdf, FR)

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This is in reference to an AG Insurance product, distributed by BNP Paribas Fortis.

 

AG Insurance sa/nv – 53 boulevard Emile Jacqmain, B-1000 Brussels – RPM/RPR Brussels – VAT BE 0404.494.849 – www.aginsurance.be.
Accredited insurance company licenced under code number 0079, under the supervision of the National Bank of Belgium, 14 boulevard de Berlaimont, 1000 Brussels
BNP Paribas Fortis sa/nv, 3 Montagne du Parc, B-1000 Brussels – RPM/RPR Brussels – VAT BE 0403.199.702, registered with the FSMA under n° 25.879A and acting as a contractually appointed insurance agent on behalf of AG Insurance sa/nv.

 
 

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