Additional pension accrual via the VAPW: what, who, why and how?

What is the VAPW?

At the end of last year, our government decided to expand the second pension pillar with the VAPW

, the Voluntary Supplementary Pension for Employees. The VAPW is a fiscally attractive solution to build up supplementary pension and was created for employees who do not have, or only have a limited, collective pension plan with their employer. This new pension vehicle came into effect on March 27, 2019.

The basic principle is that an employee can ask their employer to withhold an amount from their net salary and deposit it into a VAPW contract.

Who can build additional pension through the VAPW?

Employees without a pension plan or group insurance with their employer

Employees who already build up pension through a pension plan or group insurance with their employer

, but whose total of the premiums in the group insurance and any possible sector plan is less than €1,600 per year or 3% of their reference salary*

Or put differently: employees who already save through their employer 3% of their reference salary

or more than €1,600 as supplementary pension are excluded from the VAPW.

Did you know... that on the website https://mypension.onprvp.fgov.be/nl/mypension/Paginas/default.aspx target="_blank">MyPension.be you can easily calculate whether you are eligible to build up supplementary pension through the VAPW? You can also find the amount of your already accumulated pension reserves in the second pillar there.

What are the advantages of the VAPW?

The VAPW offers an additional opportunity to build up supplementary pension to

a group of employees who so far have not been able to save for their pension through the second pillar.

Building up a pension through a VAPW contract entitles you to a 30% reduction of

the saved amount on the personal income tax.

The VAPW can be combined with individual pension savings and long-term savings.

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The employee decides themselves how much to save each year via the VAPW. There

is only a statutory annual limit of 3% of the reference salary, with a minimum of €1,600.

The employee chooses themselves in which formula to build up supplementary pension

: Branch 21, Branch 23, or a combination of both.

How does the VAPW work?

The principle of the VAPW is simple: the employee asks their employer to withhold an amount from their

net salary and transfer it into a VAPW contract. -8729b6e72f4a">

You are an employee: what to do if you want to take out a VAPW?

You must first take out a pension contract yourself (through your broker) with an insurance company

. You will then receive a certificate to give to your employer. From then on, a monthly contribution will be deducted from your net salary and deposited into your pension savings contract.

You are an employer: what to do if an employee wants to take out a VAPW?

Many employees first turn to their employer if they want to start a VAPW. However, they must first

take out a pension agreement themselves with an insurer. They will then receive a certificate which they need to give to you. After receiving this certificate, you can withhold the desired monthly amount from your employee's net salary and transfer it to the insurer or pension institution chosen by your employee.

As an employer, you bear no further responsibility. For example, you do not have to guarantee any return. In this respect, the VAPW differs from a standard group insurance, where as an employer you are obliged to provide a minimum return guarantee of 1.75% (cf. the Act on Supplementary Pensions or WAP).

How does Van Dessel support you?

In our role as broker, we are happy to advise you on the various options for building up a

-entity-substitution="canonical" data-entity-type="node" data-entity-uuid="73a4c882-51f4-4932-8beb-7dade04aff82" href="/node/255">supplementary pension. If you choose the VAPW, we will explain through which formulas you can save and what the possible risks and expectations regarding return are.

More information or advice?

Feel free to contact us at 03 482 15 30 or mailto:leven@vandessel.be

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*In the context of the VAPW, the reference salary is the gross annual salary, including other

salary elements (bonus, holiday pay, etc.), that the employee received two years prior to the year in which he actually saves.