Employees are often more focused on immediate financial benefits, such as their salary, than on their future pension. It is important, however, that employers make provisions for the accrual of a supplementary pension and also clearly communicate on the importance and advantages of such a benefit. In a new episode of the video podcast Succes Verzekerd, Trees Dierickx discusses specific investment opportunities and the importance of returns, among other things. As an insurance expert in Employee Benefits, she emphasises the value of taking a long-term view of supplementary pensions for both employers and employees.
Sectoral salary increases and their positive outcome on employees' benefits package
The Interprofessional Agreement 2021-2022 provides the sectors with a 0.4% margin for wage cost development. Most sectors are still examining how to implement this wage standard and which freedoms they will give companies in this regard. This should become clear in the coming weeks. If employers are given the option to convert this wage increase into an equivalent benefit, you may consider introducing an additional insurance for your employees or optimising an existing one. We briefly outline the various options for you.
Employers may choose to use the sectoral salary increase to introduce a collective hospitalisation insurance or ambulatory costs insurance policy, or to optimise their existing health care insurance. There are several insurance options on the market that meet the sectoral salary increase budget for both hospitalisation insurance and ambulatory costs insurance.
In joint committees with no sectoral pension system in place or where the salary increase is not spent in a sectoral pension plan, employers may choose to use the salary increase to supplement an existing company pension plan or, if no supplementary pension is accumulated for employees, to introduce a new company pension plan. However, if a new pension plan has to be started, not all insurers are prepared to do so if the premiums are limited.
A sectoral pension system is in place within some joint committees. These sectors may opt to apply newly negotiated salary increases for the sector plan’s higher contributions.
In joint committees that allow companies to act outside the scope of the sector plan through their own company pension plan, this business plan should at least be similar to the sector plan at all times. For these companies, then, an increase in sector plan contributions implies an increase in contributions from their company pension plan − unless the contributions were already higher than those stipulated by the sector plan. For those company plans, the sector will impose a deadline for submitting a certificate from their insurer that states that their pension plan is similar to the sector plan. If the sector increase is not to be (fully) used for the increase in pension contributions, the employer may choose to spend the amount on other similar benefits.
Within the framework of the Unity Statute, the spending of the sectoral salary increase on a pension plan should not magnify existing differences between manual workers and employees or introduce new ones.
Sectoral salary increases can also often be used for other similar benefits, such as the introduction of or increase in meal vouchers or EcoCheques. A combination of various benefits is also possible in most cases.
Each joint committee establishes its own framework with possible options for employers via a biennial sectoral agreement. It is useful to know that the sectors always stipulate a period during which companies must decide how they want to grant this sectoral salary increase. If the company does not opt for an equivalent benefit in time, the sectoral agreement’s default option will be applied (e.g. increase in gross salary, introduction of EcoCheques, awarding of an annual premium, etc.).
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As an independent business owner, it is important to invest your funds in a tax-efficient manner with the prospect of a nice return. It is recommended to find a clever way of handling the excess reserves rather than letting them evaporate in the corporate account. But what are good and tax-efficient alternatives for your available funds besides the standard supplementary pension schemes such as EIP and PLCI?
We are there for you.
Would you like to view the specific options within your joint committee in order to spend a sectoral salary increase on insurance for your staff? If so, contact your Employee Benefits account manager.