Once the administrative formalities have been completed, AG can start the payment process.
How much will you collect?
On My Global Benefits, our digital platform, you can check the size of your supplementary pension benefits that have accrued to date. By clicking on "Details" you will find under "accrued reserves" the amount to which you are entitled when you leave your employer.
Keep in mind that this is the gross value of your group insurance benefits, including profit sharing. In most cases, you can expect to take home roughly 80% of this amount after taxes.
At the time of retirement, certain taxes will be deducted from the gross benefits such as withholding tax, an INAMI/RIZIV contribution and a solidarity contribution. These deductions represent roughly 20% of the total value. For a complete overview of the tax implications, go to the "Taxation of your group insurance" page.
Lump sum or annuity?
Your pension plan regulations stipulate how you can collect your supplementary pension benefits:
- as a one-time cash lump-sum payout
OR
- as a regular annuity for the rest of your life.
Tip: Tax treatment will vary depending on whether you collect your supplementary pension benefits as a one-time cash lump-sum payout or as a regular annuity.
Lump sum
Taking the amount as a one-time lump-sum payout is by far the most common option in Belgium. You simply collect
the entire cash lump sum on your retirement date, less any withholding tax (see below).
Annuity
If you take your group insurance proceeds as a lifelong annuity payment, you essentially get
an additional source of income on top of your state pension. Payment frequency for this annuity can be monthly, quarterly, semi-annually or annually.
Tip:
If your pension plan regulations require you to take your proceeds as one-time cash lump sum, you can always convert it into a regular annuity payment afterwards. In this case, tax treatment will be different than for an annuity originally foreseen in the group insurance regulations.
Not a Belgian resident?
If your tax home or seat of wealth is outside of Belgium, AG is required by the Belgian tax authorities to deduct withholding tax at the time your supplementary pension benefits are paid out. This is not the case, however, if you fulfil both of the following criteria:
- You are a resident of a country that has signed a double taxation treaty with Belgium.
- You are taxable in this country.at the time of payment of your supplementary pension benefits.
If you fulfil these conditions, please fill out the "Foreign Tax Certificate - Settlement outside Belgium of pension benefits under a group insurance contract" form.
To find out whether there is a double taxation treaty between Belgium and your country of residence, we recommend that you contact Belintax on +32 (0)2 57 634 70 or by e-mail at
belintax@minfin.fed.be.
Taken out an advance or pledge against your group insurance benefits?
If you have taken out an advance on your supplementary pension and fulfil the criteria below, you will be taxed when your group insurance proceeds are settled in full.
- You have taken out an advance against your group insurance benefits to purchase, build, renovate, remodel or repair a home.
- This property in question is located in the European Economic Area.
- It is your sole and unique residence.
- This home is exclusively for your personal use and that of your family members.
When you cash out of your group insurance plan, the proceeds are normally subject to a one-time tax. But if you take out an advance or pledge against your group insurance benefits, your tax liability can be spread out over time in the form of a theoretical annuity:
- 1 to 5% of the borrowed amount (depending on your age at the time you take statutory retirement)
- For 10 or 13 years
- Up to a maximum cap (EUR 81,610 in 2020)
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Important!
If you remain actively employed until your statutory retirement date, you'll be taxed on 80% of the amount you borrowed, up to a maximum cap (EUR 81,610 in 2020).
If you pass away prior to collecting your supplementary pension benefits, your beneficiaries will also be taxed through a theoretical annuity.
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