News & Warnings

Conversion of pension capital into a temporary and/or deferred benefit

News
News article
02/05/2018

The FSMA has published two additional opinions (available in French or Dutch only) regarding the possibility of converting a pension in the form of a capital sum into a benefit. In the FSMA’s opinion, a pension commitment or pension agreement that pays out the capital in the form of a lump sum may provide that the capital can be converted into a temporary and/or deferred benefit. Such benefits, moreover, do not fall within the scope of Article 28, § 1 of the Law on Supplementary Pensions for employees (WAP/LPC) or of Article 50, § 1 of the Law on Supplementary Pensions for the self-employed (WAPZ/LPCI).

The provision of such additional conversion options does not in any way derogate from the right of the pension plan member to request the conversion of his or her pension capital into a lifelong benefit that begins immediately and that meets the minimum requirements of Article 19, § 1 of the Royal Decree implementing the Law on Supplementary Pensions for employees (KB WAP/RA LPC) or of Article 3, § 1 of the Royal Decree implementing the Law on Supplementary Pensions for the self-employed (KB WAPZ/RA LPCI).

The sponsoring undertaking (for employees) and the pension institution must, moreover, communicate clearly about all payment options when a benefit is due.