The definitive regulation for the Wijninckx contribution is into force since the beginning of 2019. This levy was introduced in 2012 and specifically targets the creation of substantial supplementary pensions.
Legal entities and employers must pay the Wijninckx contribution of 3% on supplementary pension schemes, for both salaried and self-employed persons, whenever the total contributions for life insurance, death insurance and tax-exempt premiums for 2018 exceed the threshold of EUR 32,472.00. This regulation applies to all pension schemes in the 2nd pillar (self-employed and salaried persons), except for internally financed pension fund commitments, PLCI/VAPZ, NIHDI and CPTI/POZ. Both contributions paid by the employer and the employee are added up to determine whether the threshold has been exceeded. If the premiums for the creation of the additional pensions (both life and death policies) exceed the threshold amount, the contribution is payable. This contribution is then calculated solely on the basis of the employer’s share, not on the contribution from the employee that exceeds the threshold.
If an employer has made a contribution of EUR 40,000 to a supplementary pension scheme for the contribution year 2018 (i.e. the premiums paid in 2017), a contribution of 3% is due on an amount of EUR 7,528 (EUR 40,000 – EUR 32,472), resulting in a contribution of EUR 225.84 being payable.
The definitive regulation will apply to those contributions paid in 2018 that trigger the payment of a Wijninckx contribution in 2019. The calculation of the definitive contribution is carried out in two steps:
The first step involves checking whether the threshold has been exceeded. In the second step, the amount of the Wijninckx contribution is determined in the event the threshold has been exceeded.
To determine whether the threshold has been exceeded, you need to take the combined total of the amounts for legal pensions and supplementary pensions. If this total exceeds the threshold for the maximum legal pension (i.e. the pension target amount) for the public sector of EUR 78,453.60 on an annualised basis, the contribution of 3% will be applied.
The definition of the legal pension is laid down by law, using a defined formula as follows:
- For salaried employees: ‘50% x pension ceiling for employees x the number of working years to date as a salaried employee/45’
- For self-employed persons: ‘25% x the amount of the 2nd step in the social security contributions scale for those who are primarily self-employed x the number of years worked as self-employed/45’
All supplementary pensions (including survivor’s pensions) must be included. These supplementary pensions are converted into a pension amount by applying a conversion coefficient, in order to then add them to the legal pension and so determine whether the threshold has been exceeded.
If it is established that the threshold has been exceeded, a contribution of 3% is owed. The base on which this 3% is owed, is calculated as explained below. The acquired reserve on 1 January of the year N is compared with the acquired reserve on 1 January of the year N-1 (including profit sharing). A correction is applied for capitalisation, using the average 10-year bond interest rate (OLO) in each of the last 6 calendar years prior to the contribution year.
In order to compare the reserves, supplementary pensions are included, meaning PLCI/VAPZ, NIHDI and CPTI/POZ contracts and internally financed pension schemes, as well as the reserves for plans where no premium is paid.
Sigedis will calculate whether a Wijninckx contribution is due at the end of 2019 for salaried employees and self-employed executives and if so, how much it will be.