Employee Benefits
AG EB ONLINE
Published on 18/11/2022
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Temporary unemployment measures in the context of the energy crisis: how pensions and cover are affected
If your company uses a lot of energy, you might need to furlough some of your employees to save costs. In such cases, the law of 30 October 2022 on temporary support measures in the context of the energy crisis (Belgian Official Gazette, 3 November 2022) includes measures on continuing the supplementary pension contributions and risk cover for your employees under certain conditions. There is also the option of deferring premium payments for you as an employer.
UPDATE ON 1/10/2023: Pursuant to this law, you are required to formally amend your pension plan regulations and/or pension plan agreement: they must clearly state whether or not coverage was maintained during periods of temporary unemployment due to the energy crisis All pension plan regulations must be formally amended by 31 December 2023 at the latest.
The "Energy Crisis Addendum" is part of this requirement. This Addendum outlines the extraordinary measures that temporarily applied during the energy crisis. It must be appended to each of your plan regulations in AG EB Online. Not a user of AG EB Online? You will then receive the Addendum by ordinary mail with a request to append it to each of your pension plan regulations.
This official, legally required amendment is for pension plans only. It has no impact on healthcare contracts.
If your company uses a lot of energy, you might need to furlough some of your employees to save costs. In such cases, the law of 30 October 2022 on temporary support measures in the context of the energy crisis (Belgian Official Gazette, 3 November 2022) includes measures on continuing the supplementary pension contributions and risk cover for your employees under certain conditions. There is also the option of deferring premium payments for you as an employer.
UPDATE ON 1/10/2023: Pursuant to this law, you are required to formally amend your pension plan regulations and/or pension plan agreement: they must clearly state whether or not coverage was maintained during periods of temporary unemployment due to the energy crisis All pension plan regulations must be formally amended by 31 December 2023 at the latest.
The "Energy Crisis Addendum" is part of this requirement. This Addendum outlines the extraordinary measures that temporarily applied during the energy crisis. It must be appended to each of your plan regulations in AG EB Online. Not a user of AG EB Online? You will then receive the Addendum by ordinary mail with a request to append it to each of your pension plan regulations.
This official, legally required amendment is for pension plans only. It has no impact on healthcare contracts.
Quick refresher: under normal circumstances, what happens with contributions towards a supplementary pension and the different risk covers if your staff member has been temporarily laid off?
Temporary unemployment means that your staff member's employment contract has been suspended. This generally means that they stop accruing a supplementary pension and that the risk covers (death, hospitalisation, outpatient care, income protection and waiver of premiums) will also be terminated.
Under normal circumstances, as an employer, you must report the temporary unemployment to AG, and premium payments will then be suspended.
In some cases, however, the pension plan regulations and/or assurance policy do allow for the continuation of supplementary pension contributions and risk covers in the event of temporary unemployment. In these cases, the policy terms and conditions continue to apply and the covers remain intact. There is no need for you to take any further action. It is therefore important to check the specific wording of your pension plan regulations or insurance agreement(s).
If you have set up a cafeteria plan for your staff members, then the various covers included in the plan will count a single commitment, and the suspension (or continuation during any periods of temporary unemployment) will apply to all of the covers.
What about temporary unemployment in the context of the energy crisis?
But circumstances these days can hardly be considered normal. Which is why Belgian lawmakers have made an important exception to the above principle, valid until 31 March 2023. If your staff members have been furloughed in the context of the energy crisis, they will remain enrolled in the insurance plans (supplementary pension/death/hospitalisation/outpatient care/income protection/waiver of premiums) that you have taken out for them, and their covers will remain intact. In addition, the legislation allows you to defer premium payments until 31 March 2023.
- Which companies does this apply to?
The special system of temporary economic unemployment, as referred to in this law, applies to energy-intensive companies that suffer operational losses due to the increase in natural gas and electricity costs as a result of the Russian military aggression against Ukraine. Your company must meet one of the following two conditions:
- Either its energy procurement (including energy products other than natural gas and electricity) comprised at least 3% of the company’s added value for the 2021 calendar year.
- Or its final energy bill for the quarter preceding the application for temporary unemployment in the context of the energy crisis has doubled in comparison of the final energy bill for the same quarter last year.
For companies belonging to the social profit sector, these criteria can be deviated from by ministerial decree.
- How long is the scheme in effect for?
- From 1/10/2022 to 31/03/2023 inclusive.
- This period can be extended by Royal Decree.
For more information on this special scheme, please visit the RVA/ONEM website: Dutch information - French information
As was the case with the COVID-19 measures, the law provides that pension accrual and risk coverage will automatically continue for employees who are furloughed as a result of the energy crisis, under a collective employer’s commitment.
However, you do have the option of suspending cover (except for death) and deferring premium payments. Here’s an overview:
Option 1. Maintain cover until 31 March 2023 (automatic default option)
The supplementary pension plans, healthcare insurance plans (hospitalisation, outpatient care expenses) and occupational incapacity plans (income protection, waiver of premiums) will automatically be continued for furloughed staff members while they are temporarily out of work as a result of the energy crisis. This applies to both full and partial energy crisis related unemployment.
Under the new legislation, maintaining the covers is the default option. So there is no need for you to take any further action. You don't even have to report the temporary unemployment to us.
Premium payments will normally continue as planned, but as an employer, you have the option to defer premium payments (both employer and employee contributions) for furloughed staff members until 31 March 2023. This is stipulated in the legislation, and only during the period of temporary unemployment.
If you would like to make use of this option, please call your usual AG contact person.
Please note that the end date of 31 March 2023 could be extended.
Option 2. Temporarily suspend one or more covers
As an employer, you can also opt to suspend the covers during the period of energy crisis related temporary unemployment, with the exception of death benefit coverage which must be maintained until at least 31 March 2023.
Any suspension of coverage will apply per commitment. If your staff members have their covers via a cafeteria plan, your decision will apply to all of the covers included in that plan. In any event, death benefit coverage will continue until 31 March 2023. Note that the option you select must be the same for the entire group of furloughed staff members. For example, you cannot choose to keep the covers for your Board members and suspend them for ordinary employees.
If you decide to suspend the covers, you must notify us within 30 days after the communication you received of your intention to suspend coverage for staff members that are temporarily unemployed as a result of the energy crisis.
This means that contributions will no longer be set aside for your staff member's supplementary pension during this period. In addition, they cannot make any claims against the policy(ies) you have taken out with AG and will not be entitled to any refunds or other compensation. It is important that you inform your employees of your decision to suspend coverage.
How can you inform us of your decision?
- If you opt to continue contributions to a pension plan and to maintain the risk covers, there is no need for you to take any further action. Under the legislation, continuation and maintenance are the default options.
- If you wish to defer premium payment or suspend contributions to a supplementary pension and the risk covers for the period of temporary unemployment, you will need to call your usual AG contact person within 30 days of the communication you received. Any premiums you have paid to AG in the meantime will not be refunded.
- Already informed us of your intentions? Then no further action is needed from you.
The law provides a limited period for you to reflect your decision in your pension regulations. We will be contacting you again later on this subject. (Update: this has since been done - see additional information in the introduction)
Very important: inform your staff members of your decision
Whatever option you select (to continue the covers or suspend them temporarily), make sure you communicate your decision clearly to your staff members as well as the consequences. The law requires you to inform your affiliated employees comprehensively about this matter.
- Do you want to continue contributions to a supplementary pension and maintain the risk covers? Then clearly explain what the consequences of this decision are on any individual contributions your staff members may have to make. Also be sure to clarify the conditions for withholding a portion of the staff member's salary and how the deductions will be spread over time.
- Rather not continue contributions to a supplementary pension or maintain the risk covers during the period of temporary unemployment? Be sure to inform your staff members and explain the consequences to them. Also mention that death benefit coverage will be maintained until 31 March 2023.
What about family members who are also enrolled in the corporate-sponsored supplementary healthcare plan?
The legislation on maintaining the covers also applies to family members of furloughed staff members.
Are there any sectors-specific regulations?
Under the new legislation, continuing pension contributions and risk cover until 31 March 2023 will be the default option. This also applies to employees who come under a sector-specific pension scheme and/or collective insurance. So, if you are happy with this option, you don’t need to do anything further.
What if I have a social pension plan?
In that case, you can opt to continue building up the supplementary pension as a ‘solidarity benefit’. This means you can fund this cover during a period of temporary unemployment caused by the energy crisis through your solidarity commitment. Please get in touch with the relevant provider and with AG through your regular contact.
Please note that the information set out above about suspending contributions and cover, deferring premium payments, the obligation to provide information and informing us about your choices also applies to sectors.
Have additional questions about this legislation and the extraordinary measures?
In that case, please get in touch with your usual AG contact person.
