Agreement reached on workplace pensions schemes
The guaranteed minimum interest for workplace pensions will fall to 1.75%. However, this figure could increase depending on the long term interest rate. A maximum figure of 3.75% has been set.
Speaking on Wednesday evening Ms Sioen said that "The framework is in place, all we need to do now is the text and translate it. All the partners will consult their members on Friday to see if they can live with the accord.”
“A global agreement has been reached on the following issues workplace pensions schemes (the so-called “second pillar”, income-guarantee benefit and certain issues that were pending at the National Labour Council and the National Employment Office.”
Ms Sioen went on to explain that the agreement enjoys the full support of all the member of the Group of Ten.
Guaranteed minimum interest rate
The guaranteed minimum rate of interest on money saved in workplace pension schemes has been the source of much discussion in recent times.
The realisation had grown that the minimum rate of 3.25% for employee and 3.75% for employer contributions had become untenable in the current climate of low interest rates.
The employers had been calling for changes for some time as it is they that have to make up the difference if the insurers that run the pension funds pay under the guaranteed minimum rate. The unions see the workplace pensions as a kind of delayed wage payments and consequently want them to remain as attractive as possible.