I would recommend to read my first hub on this subject before you start reading this one.

Retirement is something that concerns us all. I will try to give you a more detailed description about how retirement is arranged in Belgium and maybe it can be an example of how it can be done.

I ended my first hub by explaining that we receive various allowances, including:

1. retirement and survivor's pensions;

2. unemployment;

3. insurance for accidents at work;

4. insurance for occupational diseases;

5. family benefits;

6. sickness and disability insurance;

7. annual vacation.

8 income guarantee for the elderly;

9 guaranteed family benefits;

10 benefits for disabled persons

Let me try to give you a little bit more information.

1- Old-age pensions

Below we shall list the specific regulations of the entire pension sector. Our starting point is the salaried persons' scheme, and then we will indicate the differences with the other schemes. But first, we should explain the difference between retirement pensions and survivor's pensions:

- a retirement pension is a benefit you obtain after a given age through former employment;

- a survivor's pension is a benefit you obtain through the employment of the deceased spouse.

We will discuss these two pension types separately.

To obtain a retirement pension, you have to meet a number of conditions. First, you must have reached a given age and second, you can no longer exercise a professional activity.

Pension age:

The normal pension age for women is established at 64 years and at 65 years for men. From January 1991 until June 1997, every salaried person had the possibility to take retirement at the age of 60. Women would have to prove 40 years of salaried service for a full career, men 45 years. To erase this difference, it was decided to establish the normal pension age for both men and women at 65 years, after a long transition period. In other words, both men and women shall have to work 45 years to be entitled to a full pension.

Since 1 January 2006, the normal pension age for women is 64 and a full career for women consists of 44 years. As from 2009, the pension age will be 65 years for a career of 45 years. The normal pension age for men is already 65 and a full career takes 45 years.

The possibility to anticipate your retirement earlier than the normal pension age remains available. For male and female employees, this is possible at the age of 60, if the career counts at least 35 years.

The pension age for self-employed persons is 64 years for women and 65 for men. Just like salaried persons, the self-employed may also anticipate their pension from the age of 60 years onwards. Per year of anticipation, the pension is lowered with 5%, unless the career counts at least 44 years. Just like in the scheme for salaried workers, the required number of career years (for men and women) amounts to 35 since 2005, and the normal pension age for women will be 65 years in 2009.

The normal pension age for permanent civil servants is equal for men and women: 65 years. Civil servants can request to be retired as from the age of 60, on the conditions that they have at least five years of service an that they can assert services or qualified periods accomplished after 31 December 1976.

For certain categories of civil servants, the age limit may be higher (for magistrates e.g.) or lower (for certain military personnel).

Contractual civil servants receive the same pension as salaried workers.

Employment as a

- salaried person (private or public sector)

Before the normal pension age: 7,421.57 EUR

As from the normal pension age: 17,149.20 EUR

- self-employed person (net amounts)

Before the normal pension age: 5,937.26 EUR

As from the normal pension age: 13,719.35 EUR

Per career year, the following formula is applied:

Annual salary adapted to the inflation x 60% (single person) or 75% (family)

                                                   44 (woman) or 45 (man)

The results are added up and give the gross pension amount.

Depending on the family situation, you will receive 75% or 60%. If you are head of the household, i.e. that your spouse depends on your (no personal pension and no or limited professional revenues), you will be entitled to 75%, else only to 60%.

Career

Career years are years qualifying for the calculation of a pension. Apart from the proven activity years, there are also assimilated periods, with or without payment of contributions. Inactivity periods that are assimilated, without payment of contributions, to periods of employment as a salaried person are, among others, periods of unemployment, sickness and invalidity periods, holiday periods, military service, etc. The study periods after the 20th birthday can also be regularised by means of an application with the National pension office (ONP-RVP) within 10 years after the studies and with payment of a personal contribution.

The number of career years that is eventually used for pension calculation should never exceed 44 for women and 45 for men. If you have more years, the least favourable years will not be taken into account.

Gross salaries

Apart from the number of career years, gross salaries also play a major part in determining the pension amount. Here, we distinguish between the real salaries (salaries on the basis of which the pension amounts were calculated), fictitious salaries (which are related to inactivity periods that are assimilated) and lump sum salaries.

Survivor's pensions

A survivor's pension is only granted to widows or widowers, according to the professional past of their deceased spouse. Just like with retirement pensions, you have to satisfy a few conditions to be entitled.

- In the first place, you should have reached a given age. In principle, you have to be 45 years for entitlement to a survivor's pension (for the survivor's pension of civil servants, there are specific rules for persons under the age of 45 years). If, however, you have a dependent child or if you have an incapacity for work of at least 66%, this age condition is not required.

- Secondly, you must have been married to the deceased. The marriage should have lasted at least one year or a child should have been born in the marriage. If you have other dependent children as well - for instance from a former marriage - the marriage requirement is not compulsory, either. If the decease was the result of an accident or an occupational disease that took place after the marriage, the prescribed marriage duration does not have to be respected, either. If, however, the surviving spouse remarries, the survivor's pension is suspended.

- For the entitled to survivor's pensions, there is also a limit to the professional activities, but for persons younger than 65, this limit is distinctly higher than for those receiving a retirement pension.

If the deceased spouse was a salaried worker or a self-employed person, there are two possibilities.

If the deceased spouse was not retired yet, the survivor's pension is calculated as follows:

Per career year, the following formula is applied:

                    Annual salary adapted to the inflation x 60%                           

The number of years between the 20^th anniversary and the decease

The results are added up and give the gross pension amount

The shorter the period taken into account, the higher the amount this calculation can result in, because the recent salaries, which are usually higher, are taken into account. As a consequence, a limitation is applied, fictitiously supposing that the career is complete an taking into account a (relatively low) lump-sum salary for the fictitiously added years.

The salary taken into account for career years fulfilled by the deceased spouse or assimilated depends of the status in which he or she was employed.

If the deceased spouse (male or female) already benefited from a retirement pension, the entitled shall receive a survivor's pension for employees equal to 80% of the retirement pension at family rate of the deceased spouse (equivalent to a single person's pension).

It could be that the surviving spouse was already entitled to a retirement pension. He or she may combine this retirement pension with a survivor's pension, up to a maximum of 110% of the survivor's pension. However, if the survivor's pension is derived from an incomplete career, the ceiling is established as if the career were complete.

Obviously, a survivor's pension is only reserved to spouses who were married on the date of the decease. Still, divorced spouses can apply for an old-age pension on the basis of the professional activity their former spouse exercised during the years of their marriage (this rule does not apply to civil servants).

There are also rules for minimum pensions, which resemble those for retirement pensions.