BELGIUM - The Belgian government has been accused of "creative accounting" following the transfer of the assets of a first pillar pension plan into its coffers.
According to one industry source, who asked not to be named, assets transferred from the Port of Antwerp pension fund to the state were deposited as “recurring income to reduce the public deficit”.
He said the claim that the transferred assets would decrease the public deficit was “nonsense” because the government’s liabilities should have simultaneously increased as a result of taking on the plan’s pension promises.
“It tends to decrease the public deficit but... you should also take a charge onto your balance sheet because there are more liabilities coming in. In effect it is a zero sum operation – but it is accounted for as income by the government,” the source said.
The assets and pension promises of the e236.2m Port of Antwerp pension fund were transferred to the government in December. In the same month, the SNCB/NMBS national rail group paid the Belgian government e295m to assume its future obligations to all employees.
The transfer is seen to echo moves made in 2003 and 2004, in which the Belgian government assumed the assets and liabilities of the first pillar plans for the telecommunications group Belgacom, and the Brussels International Airport Company (BIAC), respectively.
“The press have been calling it creative accounting and people are getting used to it because they played the same trick with Belgacom and BIAC,” the source said.
However, the Belgian government described the accusations as “unjust”.“In two consecutive decisions, in October 2003 (with respect to unfunded schemes) and February 2004 (with respect to funded schemes), Eurostat clearly stated the rules concerning the treatment of the compensation for taking over the pension obligations,” said a spokesperson for Freya Van den Bossche (pictured), the minister for the budget.
“In both cases, it can be recorded as revenue with a positive impact on government surplus or deficit.”
A spokeswoman for the Port of Antwerp said the transfer had been in the best interest of the employees and the port authority: “Now [employees] have a guarantee from the government and we don’t have the pension fund to take care of.”
A SNCB spokeswoman commented: “For the SNCB group it was considered to be a good operation, as a safeguard for the future.”
By Lisa Haines
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.