Supplementary pensions in the context of mergers and acquisitions of companies

Strategic merger or acquisition plans are regularly on the table. Such discussions usually focus mainly on economic activities, financial ratios, value, market insight and customer relationships of the company of interest. However, attention should also be paid to the prevailing employee pay and working conditions of the emerging company. Valérie Rogge, Legal Consultant at Vanbreda Risk & Benefits, explains the importance of this.

Personen in meeting

As a specialist in supplementary pension schemes, our experience is that during such deals supplementary collective benefits are repeatedly overlooked and are only dealt with at a later stage. This matter is anything but just some negligible detail, as supplementary pension plans form an important part of the remuneration of employees who are being transferred. They weigh financially on a company’s social liabilities. In addition, your HR policy has every interest in maintaining the harmony that is required between your current and new employees.

Two types of merger or acquisition deals

One important factor requiring special attention in this area is a correct analysis of the type of deal that is created between companies:

  • If it is a merger or takeover in which the shares of the company are being acquired by the transferee, then we are talking about a share deal. Such a transfer only changes the shareholder’s structure. The company’s legal entity remains in existence, but control over the company changes. The employer’s legal entity remains unchanged with regard to its employees, the employment contracts continue to run and there is no impact on the employees at any time. Following this share deal, the existing collective pension schemes remain intact.
  • If it is a merger or takeover of (part of) the assets/liabilities of a company, then we are talking about an asset deal and we enter the legal waters of collective labour agreement 32bis. A national collective labour agreement known to many negotiators leads to the common misconception that supplementary pension schemes should not be taken into account within the company at all. This has to do with the fact that the CLA itself provides for a clear exclusion, stating that it “does not govern the transfer of employees’ rights arising out of the schemes for old-age, survivors’ and disability benefits granted under supplementary social security schemes. Nor does it prejudice the special arrangements provided for by law or by other collective labour agreements[1].”

[1] Article 4 CLA 32bis, dated 7 June 1985

As the transferee, how much freedom do you have?

Does the transferee have complete freedom or is he bound by a legal framework? Some nuance about the form of takeover is warranted:

  • If a complete legal entity is taken over in accordance with the rules of company law[2], then there is an automatic transfer of rights and obligations and the pension plan must be continued under the current conditions.
  • If the pension plan is set out in a CLA, then this follows the principle that collective labour agreements automatically transfer to the transferee. The CLA needs to be continued, as does the pension plan.
  • If the parties opt for a conventional transfer of business, only then can the freedom of negotiation as set out in CLA 32bis be fully implemented. After all, the transferee negotiates which assets and liabilities he is taking over, allowing him to choose not to continue with the supplementary collective pension scheme. However, this freedom does not mean that he is given complete autonomy. Employer contributions in a group insurance policy are part of the remuneration package and this package cannot just be changed unilaterally. In the event of a drastic cutand without compensation, you may end up on a legal roller coaster.

[2] Article 12:9 and Article 12:10 Company Code, 23 March 2019.

A few tips for your merger or acquisition negotiations

Be vigilant while conducting your merger or acquisition negotiations. Even if supplementary collective pension schemes do not fall within the scope of CLA 32bis, this does not mean that you have complete autonomy.

In practice, a large number of questions are raised, and it is important for you to be properly informed in good time and certainly before making any decision. Urgent questions need to be answered, such as:

  • Is the insurer prepared to continue this group insurance for the employees who have been taken over?
  • Can the plan design and the guarantees be maintained in exactly the same way?
  • Are the interest guarantees on accumulated reserves and premiums going to be taken over?

It is crucial to know the answer to these questions before the decision is made. After all, in the past it has been the case that an employer/negotiator was unable to honour his agreements because he had not been sufficiently informed beforehand about the practical options offered by the insurer of his supplementary pension scheme.

Related posts

I Stock 1201050386 HC extra

Insurers are increasingly evolving into a wellbeing partner for your employees


Being an employer, you strive to ensure that your employees are healthy and happy. Unfortunately, they sometimes encounter mental problems. At such times easily accessible care is of crucial importance to them. Fortunately, today’s insurers are no longer merely covering the cost of medical care or providing medical assistance. They are increasingly focusing on the mental wellbeing of your employees and offer a range of additional services to this end.

Read more
Read more about Insurers are increasingly evolving into a wellbeing partner for your employees
Tak 6 resize

Branch 6 and Branch 26: How To Build Up Your Business Cash Reserves?


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?

Read more
Read more about Branch 6 and Branch 26: How To Build Up Your Business Cash Reserves?
Ambulante plannen in opmars

A healthcare budget offers tangible value for all your employees


It is abundantly clear that it is not easy for most companies to attract new talent today. Shortages in the labour market and the war for talent represent a major challenge. Employees expect your company to offer a range of at least equally interesting fringe benefits in addition to an attractive salary. Which fringe benefits can you as an employer offer today in order to really make a real difference? Explore the various options to include a 'healthcare' budget: a benefit that offers added value to all your employees.

Read more
Read more about A healthcare budget offers tangible value for all your employees