BELGIUM - The Belgian authorities are considering setting up a compensation scheme along the lines of the Pensions Benefit Guaranty Corporation (PBGC) in the US or the Pension Protection Fund (PPF) in the UK.
There have been calls from some sections of the industry to establish such a scheme following the introduction of the new law on supplementary pensions which imposes a guarantee of 3.25% on all DC schemes.
Françoise Masai, director at the Belgian regulatory authority, the Banking Finance andInsurance Commission, said:
“We are considering if we need to have such an arrangement. It is always possible thatpension funds may not have enough assets if plan sponsors go bankrupt.”
In the UK, the PPF has been established to protect members of private sector defined benefit schemes whose sponsors become insolvent with insufficient funds in their pensionscheme.
Henk Becquaert, principal private secretary at the Belgian Ministry of Pensions, said: “I think the initiative for this kind of thing has to come from the pensions industry. I know there are some who are interested in this kind of arrangement while some othersare not. We don’t want to impose anything on the industry.”
He added: “In Belgium, we are under slightly less pressure for such a system because wehaven’t had any major accidents so far. But I think in the end we may have to look to organise another way of dealing with the short-term guarantees that arise when an individual leaves his or her company.
If we have a system where companies could transfer their short-term guarantees to sucha scheme, it would not be a problem for them any longer.”
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