Employer contributions to bridge pension allowances and early retirement benefits were standardized and increased on April 1, 2010.
Under new legislation, employers are now required to make larger contributions to social security for employees drawing bridge pensions, whether due to early retirement or redundancy. The government has introduced the new law in order to dissuade employers from using early retirement to release employees. Although the employer contribution has been increased, the employees affected will not receive any additional benefits from this.

The rise in employer contributions applies to all employees notified of early retirement or made redundant after October 15, 2009. It became effective on April 1, 2010. Employer contributions will be calculated based on the allowance payable on top of the retirement benefit, at a fixed percentage based on the employee’s age at the time of receiving early retirement benefits. The contributions will no longer decrease as the employee nears the standard retirement age.

Increased employer contributions
Until April 1, employer contributions were 32.25% of the additional allowance at the minimum early retirement age of 50. Employers are now obliged to make the following contributions on the additional allowance:
Age 50 - 51: 50%
Age 52 - 54: 40%
Age 55 - 57: 30%
Age 58 - 59: 20%
Age 60 or older: 10%

Companies in financial difficulties can apply to pay lower contributions.

Assistance for employers
To help companies deal with the new legislation, Swiss Life Network partner Delta Lloyd Life can assist companies by assuming the payments of additional allowances and employer contributions for former employees. In order to do this, a single premium amount is calculated and charged to the employer, after which Delta Lloyd Life is liable for the payment of allowances to former employees. The solution also enables the tax optimisation of the costs of redundancy and corporate restructuring, since a one-off payment and hence cost allocation is now possible. This is also a practical solution for companies wishing to run-off their operations in Belgium.