Interview with Hans Maertens (Voka) on the challenges of the new government - AG Employee Benefits
Interview with Hans Maertens (Voka) on the challenges of the new government

Published on 27/05/2024

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We need a government that dares to make reform part of its agenda

​​​​​​​​Interview with Hans Maertens

Elections are right around the corner. Our next government will have its hands full when it comes to improving the adequacy and sustainability of healthcare and the pension system. What should be their top priorities? Hans Maertens, Managing Director of Voka, the biggest Flemish network of companies, shared his views on the subject.

What do you see as the main priorities for the pension system?

Hans Maertens: "At Voka, we champion business and entrepreneurship: we represent 18,000 companies and 70% of employment in Flanders. In our memorandum "Building the Future of Business Today", we explain why action needs to be taken now for business to thrive in the future. We're counting on the next Flemish and federal governments to roll up their sleeves and make the much-needed reforms. The labour market, healthcare, the pension system, the economy... in other words, major state reform. We hope they'll have the courage to give our country, our society, our economy and our policies a major rehaul.

While the current Vivaldi coalition has already taken steps to reform our pension system, it's nowhere near progressive enough. Not to mention that the current reforms are already over budget, which hasn't escaped the scrutiny of the European Commission. So yes, we'll really have to re-think our pension system and take the necessary measures. We have an increasingly ageing population, and the number of people over 80 is expected to double by 2050. By then, our pension liabilities will have risen by more than 3% of GDP, or roughly another €20 billion in the next 25 years. Alarming figures, aren't they? It's clear that we need to reform the pension system ASAP."

Which measures would Voka put at the top of the agenda?

Hans Maertens: "First and foremost, measures that give people an incentive to keep working. Even with a higher statutory retirement age, many people still leave the labour market early. One of our ideas is to introduce a retirement "penalty". In other words, the earlier you retire, the lower your retirement benefits. This is already the case, but it can be amplified, as seen in Germany.

Another proposal is to increase state retirement age as life expectancy rises. This can be done automatically. In some countries, for example, once life expectancy has risen by six months, retirement age will increase by two or three months. We should also try to phase out equivalent periods and end-of-career schemes, such as the unemployment scheme with company supplement (SWT) and soft landing schemes. And pensions for civil servants should also be up for discussion." 

​"One of our i​deas is to introd​​uce a retirement penalty." 

​"The pension system should also reward people for working longer, especially in a tight labour market. The second pillar can act as an incentive as it builds up an additional pension nest egg. I think we need to make it much clearer to employees that the way to earn pension entitlements is by working. Not only via the first pillar, a pay-as-you-go system, but also via the second pillar, a capitalisation system that spreads pension risk. A combination of these two pillars creates an extra financial cushion. With the state pension only, many people end up with a replacement rate that's much lower than their pre-retirement earnings."

How do you feel about a 3% contribution for the second pillar? Is it enough?

Hans Maertens: "Look, that should also be up for discussion. Our companies, which already have a very high wage handicap compared to other European countries, are concerned that higher second-pillar pension contributions will further weaken our competitiveness. So we'll have to come up with creative solutions, such as cafeteria plans where people can convert part of their salary into a second-pillar pension contribution. Or why not apply some of the salary indexation towards a second pillar contribution? (frowns briefly) Of course, we're against this indexation system, let that be clear. 

Not only will we have to find new forms of remuneration, but we also need more transparency, according to the majority of employers. When companies pay into to the second pension pillar, their employees don't necessarily see it as part of their salary or as additional savings towards their pension. The effort is insufficiently appreciated or - even worse - completely unnoticed. Part of the problem is that the annual benefits statements are too complicated. I think we need to communicate much more transparently about contributions and accrued entitlements, in plain language."

Employees with an AG group insurance plan have a user-friendly app that shows them how much their employer contributes as well as the current size of their pension nest egg.

Hans Maertens: "Yes, and that's very important. I welcome any initiatives taken by a pension fund or insurer to increase transparency in this area. To show how much is contributed and what it means in the long run. I think we need to drag the pension issue out of the shadows, especially for people in their 20s and 30s. Because by 2050, people in their 30s will be in their 50s and 60s​."

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So a lot of reforms are needed. Would you say that the stability of the pension policy isn't a pressing issue yet?

Hans Maertens: "I hope we'll have a  government that won't shy away from reforms. With a strong Minister for Pensions that will push through a reform agenda that will go the distance. There are more than enough reports, studies and blueprints on the table, including from the ageing population commission, from universities... Now it's time to go ahead and do it, ideally in one term. If the reforms get spread out over several terms, it will end up being a stop-and-go policy. The government will have to get this done in the first two years, and it won't be pretty. Like a lot of issues the next government will have to address. Because when we consider the budget deficit and the challenges we have in healthcare and the pension system... We're really going to have to tackle all of this in one single term. For that, we need a strong government, a strong coalition agreement. And yes, plenty of courage too!"

You've rightly pointed out the challenges in healthcare. Absenteeism rates remain very high. How can we reverse this trend?

Hans Maertens: "There are two ways to address this problem. The first is prevention. With the right prevention, we can keep people from needing to take sick leave in the first place. Currently, 1.6% of the healthcare budget in this country goes to prevention. This is too low, especially when compared with international figures and the World Health Organisation's recommendation. It should be closer to 5%. A 3.4% increase does not necessarily mean additional costs. Because whatever we invest in prevention, we get back twice as much with fewer people on sick leave. So it's not about simply trying to reduce the number of workplace accidents but really focusing on health. 

The second aspect is tackling the 500,000 long-term sick leave cases in our country. There are currently more people collecting disability benefits than unemployment, which represents a very high cost and a major challenge. In the workplace, there is a huge loss of productivity and colleagues are forced to pick up the slack. I don't think anyone likes being stuck at home sick. A large proportion of them are able to return to work temporarily and/or on a part-time basis at some point. Maybe in another position, maybe even in another company. But today we're in a binary system: sick or healthy, with nothing in between. Which is why we're pushing for a system where employees have to provide a "wellness" certificate in addition to a "sickness" certificate, as is the case in the Netherlands. A prescription for things they can still do, such as working one or two days a week, a less demanding job, a few hours a day... There are so many possibilities. We need to look at what someone can still do instead of what they can't do.

We'd also like to see more involvement from occupational physicians in the recovery process. Employees on sick leave are treated by their own GP or specialist, and this practitioner decides whether or not they are able to go back to work, without any knowledge of the work or the company. This is why we want occupational physicians to take on a bigger role. Initial contact should already happen after four weeks of sick leave, and an individually-tailored return-to-work programme can then be designed based on a medical questionnaire. It shouldn't only cover the option to return to work on a part-time basis and/or workplace accommodations, but also, for example, training and reorientation. People who are unable to go back to the same job get classified as inapt for work and continue to collect disability benefits, even though they may be able to do other things."

​"Currently, 1.6% of the healthcare budget in this country goes to prevention. This is too low. It should be closer to 5%​." 

What you're saying is that we should aim higher?

Hans Maertens: "Exactly. After all, there are 500,000 long-term sick leave cases among the working age population in Belgium including 15,000 unsuccessful participants in return-to-work assistance programmes, so clearly there's something wrong with this picture. That's why we're recommending a target of 40,000 to 50,000 assistance programmes on an annual basis."

So employers should take an active role in this area as well?

Hans Maertens: "Employer involvement in return-to-work programmes is absolutely necessary. Their input is instrumental in getting employees on sick leave back to work, whether full-time, part-time or temporarily in a new position. These are also major challenges for HR departments. At Voka, we've written a paper with plenty of recommendations for companies (Voka wijzer). Of course, some people are genuinely ill, and when they're unable to do anything anymore while still in the prime of their life, it's very sad. But there are definitely people on sick leave that we can ease back into the labour market. And that will require a lot of flexibility from everyone. The current systems and programmes can be greatly improved and expanded, with a greater role for the occupational physician. In the end, a win-win situation for everyone."

Will occupational physicians have enough time to take on these extra responsibilities?

Hans Maertens: "Medicine has also become a profession with more vacancies than qualified candidates. And the question is whether we should rethink the practice of medicine. Doctors can be assisted by nurses for many tasks. Of course, the shortage of nurses must also be addressed. In short, if we want to permanently reduce the 500,000 long-term sick leave cases, we need to reform the entire healthcare system. And so the next government will have to be a really bold one, one that takes immediate action!"

Return To Work: going the extra mile in reintegration assistance

Employees who have had to take extended sick leave due to a stress-related condition such as burnout need the right guidance to get back to work safely and successfully. So we've enlisted the help of external qualified partners who can design a scientifically-proven return-to-work assistance programme together with your staff members. To highlight its importance, this type of assistance is included in Income Care at no extra cost. Find out more about the Return-to-Work assistance programme.