Will you also be saving towards a supplementary pension?
On top of a salary, many employers also include fringe benefits in their pay package, such as group insurance.
By enrolling you in the company's group insurance plan, your employer sets you up with a considerable added sweetener that you can use once you've retired. Your employer may also provide supplementary death benefit coverage. If so, your beneficiaries will be entitled to collect a certain amount if you pass away before you reach retirement.
The ABCs of supplementary pensions
A supplementary pension is a nest egg that you build up throughout your career with the help of your employer or the sector you work for. The savings set aside will be paid out to you when you retire, on top of the state pension payable by the federal government.
Roughly 75% of employers set up a supplementary pension plan for their staff members. There are good reasons for this:
- The state pension in Belgium is one of the lowest in Europe, so a top-up is more than welcome.
- With a supplementary pension plan, your employer is also protecting you and your family's purchasing power after you retire.
- On top of a supplementary pension nest egg, your employer can provide additional benefits such as death benefit coverage. With this type of coverage, your named beneficiaries will collect a lump-sum payout if you die before you reach retirement age. In this way, your employer provides another layer of protection for your family.
- For both you and your employer, a supplementary pension is a tax-efficient form of remuneration. On a net basis, you'll end up with more in your pocket.
Find out more about building up your supplementary pension on the detailed "What is a supplementary pension?" page.
What is death benefit coverage?
Death benefit coverage is a type of life insurance that your employer can take out for you and your colleagues as a supplementary benefit. Your employer then specifies in the pension plan regulations that a pre-set amount (the death benefit) will be paid out if you die before retirement age. Your employer pays a premium in exchange for this benefit. In some cases, your employer will allow you to set your death benefit coverage level yourself.
You may also be interested in the following questions:
- Who will collect your death benefit?
The beneficiaries of your death benefit are determined by law. You can, however, opt out of the standard order of priority. For more information, go to the detailed page.
- Can you do anything with your death benefit coverage now?
Yes, you can already use it to buy or build a home, as an alternative to outstanding balance insurance and/or to pay off a mortgage.