Belgian Pensions Accounting Survey 2017 | KPMG | BE

Belgian Pensions Accounting Survey 2017

Belgian Pensions Accounting Survey 2017

Giving you an overview of the big trends regarding IAS19 assumptions.

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Belgian Pensions Accounting Survey 2017

Belgian Pensions Accounting Survey 2017

Giving you an overview of the big trends regarding IAS19 assumptions.
Managing your pension plans from a financial accounting perspective is a real challenge for Finance and Human Resources functions. In Belgium, you operate in a landscape with ever changing legislation and a market environment that requires adaptability. In addition, international accounting standards also require that companies determine the value of their pension liability. Both IFRS and ASC 715 standards prescribe additional assumptions and recommendations that are added to the measurement requirements.

In an effort to get to the bottom of IAS19 general trends in Belgium, KPMG Advisory introduces the first edition of the KPMG Pensions Accounting Survey in Belgium. In this benchmarking report, we take a closer look at the assumptions used by companies to value their pension liabilities for year-end 2016. As well as share insights on how the IAS19 or ASC 715 guidelines are implemented on the Belgian market. Overall, this gives us a good chance to identify and explain some of the key trends in accounting assumptions.

The presented figures are based on our analysis of the assumptions used by 50 companies on the Belgian market as well as general observations for the year-end 2016 situation. 

Discover the key insights

At year-end 2016, the big trends regarding IAS19 assumptions in Belgium were:

  • The average discount rates applied at year-end 2016 have decreased compared to year-end 2015. The deterioration of the discount rates results in negative yields for shorter maturities (up to 5 years) during the third quarter of the year.
  • Aligned with guidance from the ECB for the long term, the observed inflation rates remained stable around 1,85%.
  • On average, employees benefit from a merit increase of around 1,20% in addition to the salary increase related to the inflation rate. In contradiction with the usual market perception, we didn’t observe highly differentiated salary increases depending on the age or seniority of the employees.
  • The turnover rates are age dependent. For more senior people the observed rates remain stable until the end of their career.
  • The observed age correction on the mortality table MR/FR used in Belgium is three years on average. The appetite for prospective tables is currently rather limited.
  • On average the retirement age is 65 in participating companies. In some rare cases, remnants of the past legislation could still be observed (i.e. retirement age of 60 or 62). The recent legal changes regarding the retirement age were not reflected in the surveyed companies. 

© 2017 KPMG Advisory, a Belgian civil CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.

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