Cent index: direct impact on supplementary pension capital

Index-linked percentage increases will apply only to the portion of employees’ gross pay up to 4,000 euros in 2026 and 2028 rather than to the entirety of their pay. At an inflation rate of 2%, this would mean a gross increase of 80 euros, regardless of the amount by which pay exceeds this amount. For many Belgians, though, the cent index means not just lower index-linked pay but a reduction in second-pillar pension capital. As 70-80% of all working Belgians have a second-pillar pension plan – for example, through a sectoral scheme – this measure affects a large group.

The exact extent of the impact and who will feel it most in their portfolio depends on several factors. In the following calculations, we only consider defined contribution pension plans, where the amount paid in is a percentage of salary.

We have calculated that the effect on supplementary pensions varies significantly depending on:

• The type of pension plan (flat rate vs. step rate – see table below)
• The employee’s age
• The salary level

Source: Vanbreda Risk & Benefits

Conclusion: for flat-rate plans, the impact is relatively slight. For step-rate plans, especially for those earning around the statutory ceiling, the impact is more significant.

In this case, the longer the time to retirement, the greater the cumulative effect on the final pension capital. Two examples:

• Employees over the age of 55 will experience a holding loss of several thousand euros towards the end of their career.
• For younger people (under 35) with above-average pay, the gross loss could be 15,000 to 20,000 euros by the time they retire.

In concrete terms: the table below shows the impact for a 35-year-old employee with a median defined contribution plan, based on various pay levels.

*The loss to the portion above the statutory pension ceiling becomes less significant as pay increases (from 6,000 euros). This explains the percentage decrease in capital loss. In absolute terms, however, the loss increases as pay rises.

For a gross salary of 5,000 euros (with a multiplier of 13.92 (= annual salary including thirteenth-month bonus and holiday pay)) this is as follows for 2026:

• Full index salary = 5,000 * 13.92 * 1.02 = 70,992 è Premium * 3% = 2,130 euros
• Capped salary = (5,000 + 80) * 13.92 = 70,714 è Premium * 3% = 2,121 euros

The cumulative effect has been taken into account. The calculations include future premiums with and without index-based salary increases up to retirement age (67). The effect of compound interest is the main reason why a small adjustment early in a career has a relatively large impact by retirement age. There is also no cap on the increase in the statutory pension ceiling.

As well as the interest on the 9 euros (see example above), we have also taken account of the accrual of future premiums. We have assumed inflation of 2% in the projections. The table below shows the compound effect of the decrease in premiums and the loss of interest on this portion of premiums that has an impact at retirement age:

This measure comes at a time when the government and employers are committed to taking greater responsibility for pension accrual. It is therefore essential for both employees and employers to be aware of this side effect and think about compensation options to ensure a financially secure future.

Do you have any questions about this press release, or would you like to receive more information? Contact:

• Isabelle Hoes 
• Senior Advisor External Communication at Vanbreda Risk & Benefits
• Email: pers@vanbreda.be