In accordance with the Law of Supplementary Pensions, contributions to a supplementary pension plan have to yield a minimum return each year. This 'LCP' rate, which has to stay within the range of 1.75% and 3.75%, is based on the 10-year OLO (Belgian government bond) rates. It is calculated annually on 1 June and applies from 1 January of the following year.
LCP rate for 2026
According to our latest calculation, the LCP rate will remain at 2.50% in 2026. So no change from this year, as the 10-year OLO has remained fairly stable since the end of 2022.
How is this minimum return applied?
The minimum return applies to Defined Contribution and Cash Balance type plans. The default application of the LCP rate depends on the type of investment:
- Branch 21: the rate applies only to new premiums (horizontal method).
- Branches 23 and 44: the rate applies to new premiums as well as to all accrued reserves (vertical method).
What happens in the case of underfunding?
On premiums that are personally funded by the employee, the minimum return must be covered at all times. For this purpose, employer and personal premiums, as well as investments in financing funds may be taken into account to ensure this.
It is only when employees retire or move to another employer and request the transfer of their pension reserves, that the total pension reserve, from both employee and employer contributions, capitalised at the LCP rate, needs to be funded.
Our solutions
AG offers attractive and long-term pension plans. They are invested in funds within branch 21, branch 23 or a combination of both (branch 44):
- Branch 21 offers you an attractive guaranteed return each year added to any non-guaranteed profit sharing. By the way, did you know that we have a unique profit-sharing scheme at AG?
- Branch 23 invests in numerous diversified funds with excellent historical returns. A unique professional approach ensures excellent volatility control.
- Branch 44 offers a guaranteed return on part of the premiums and the opportunity to benefit from potentially higher returns by investing in funds. You decide how much risk you take.
While past results do not guarantee future returns, our healthy returns over the past few years do show that AG is a great choice. You can rely on us to come up with innovative solutions that will give you maximum support to meet the statutory minimum return.
Do you have any questions or would you like more information?
If so, feel free to get in touch with your usual contact at AG Employee Benefits. We’ll be happy to assist you.