Explanation of the pension scheme

Please find below a summary of the key points of the pension plan of the Section DuPont Belgium. The defined benefit plan is only applicable to employees who joined the company before 1 October 2006. This summary has no legal value. Exclusively the official text of the pension regulations is legally binding.

Introduction

In order to gain an accurate insight into the facilities of the pension plan, we recommend that you thoroughly review the text below. Any additional questions may be presented to CallHR or the local HR department. The official text of the pension regulations, which serves as a basis for the interpretation of the provisions, is available from the menu on the right of this page under Downloads.

The pension plan provides:

  • a pension capital supplementary to the statutory pension;
  • a surviving partner’s pension or capital upon death;
  • an orphan’s pension;
  • an occupational disability pension.

The defined benefit pension plan of DuPont de Nemours (Belgium) first came into effect on 1 April 1962. It was subsequently subject to various revisions and improvements. As per 1 October 2006, no new participants were accepted into this pension plan. On 1 February 2015, the pension plan was transferred from insurer AG Insurance to DuPont European Pension Fund OFP.

When will the pension capital be paid out?

In principle, since 1 January 2016 you can have the pension capital resulting from your pension plan paid out exclusively upon the statutory (early) retirement date. However, some exceptions apply to employees who left the company before their retirement date.

The capital can be paid out early to employees who left the company:

  • from the date on which all conditions have been fulfilled that apply to taking statutory early retirement as an employee, without effectively taking up this early statutory retirement, or;
  • depending on age (born before 1962):

– age 60 for those born before 1959 (in 2016 they will be age 58 or older);
– age 61 for those born in 1959 (in 2016 they will be age 57);
– age 62 for those born in 1960 (in 2016 they will be age 56);
– age 63 for those born in 1961 (in 2016 they will be age 55).

Please visit www.mypension.be to view the earliest statutory retirement date that applies to you personally and an overview of your service years.

Pension capital in the event of early pay-out

In view of early retirement or early pay-out under SWT, the pension capital will be paid out upon leaving the company in accordance with the rules applicable to regular retirement at age 65.

If you were born before 1 January 1962, this is not subject to a reduction for early pay-out of the capital (i.e. before age 65). Naturally, the pension capital calculated will be proportionally reduced for the number of service years completed compared to the number of service years that would have been completed at age 65.

Part-time factor

If an employee worked part-time, the number of years of participating in the plan will be based on the hours the employee actually worked.

Example: a participant worked full-time for 6 years and 50% for 10 years. In that case, all pension calculations are based on participating for 11 years.

(6 years x 100%) + (10 years x 50%) = 6 years + 5 years = 11 years.

Furthermore, the pension capital is always based on a full-time salary. The part-time factor in the formula therefore only affects the number of service years.

Retirement pension

The total retirement pension will consist of the statutory pension plus the corporate pension.

Statutory pension
The statutory pension amount depends, among others, on the number of service years (actually worked or equivalent periods) and the wages you received during your service years. A full statutory pension is achieved after 45 service years, which amounts to 14,040 full-time days.

Both the participation years and the wage considered in the calculation of the statutory pension are different for each employee. Furthermore, statutory pension is subject to changes at any time. This is why it is not possible to accurately forecast the future statutory pension.

In the near future, you will be able to calculate your estimated future statutory pension on www.mypension.be. The tool is expected to become available in late 2017.

You will also automatically receive an estimate of your pension if you have worked as an employee and reside in Belgium upon reaching age 55. After receiving an automatic estimate at age 55, this estimate will be recalculated annually based on the most recent career data. This is available in www.mypension.be. From age 55, you can also request an estimate based on different career choices and other factors from the DEPF Pension Administration department.

Corporate pension
The pension plan ‘Defined Benefit’ provides a capital to be paid out upon survival of the participant on the target retirement date. The amount of this pension capital depends on:

  • the total period during which the employee participated in the pension plan (service years);
  • the participant’s remuneration;
  • a pension ceiling to be determined annually.

The pension capital will be calculated in accordance with the following formula: [(1.75% x S x N1) – (50% S £ S1 x N2/40)] x 12.085,

where S = the annual wage considered, calculated as the arithmetic mean of the 36 best successive basic monthly wages (increased with the shift allowances) in the last 10 years, multiplied by 13.9967 for the basic monthly wage and by 12.92 for the shift allowances.

The following examples are based on the assumption that the full-time annual wage (S) is equal to 13.9967 times the average monthly salary of the last 36 months prior to retirement.

S1 = the applicable pension ceiling € 54,648.70 (2017)
N1 = the number of years of participation in the pension plan
N2 = same as N1, but capped at 40 years

S ≤ S1 should be interpreted as follows in the formula:

– if S (the annual wage) is lower than or equal to the pension ceiling, S will apply;
– if S (the annual wage) is higher than the pension ceiling, the
amount of the pension ceiling (S1) will be applied.

The pension formula applied does not discern between genders. The pension capital as calculated does not impact  the relevant participant’s family situation.

Situation 1: 40 service years at age 65

S = average € 2,383.60 x 13.9967 = € 33,362.53

S is lower than the pension ceiling (S1), therefore S is applied in the formula.
50% of S = € 16,681.27

The pension capital is equal to:

[(€ 33,362.53 x 1.75% x 40) – (€ 16,681.27 x 40/40)] x 12.085 = € 80,637.17

Situation 2: 30 service years at age 65

S = average € 4,000 x 13.9967 = € 55,986.80

S is higher than the pension ceiling (S1), therefore S1 is applied in the formula.
50% of S1 = € 54,648.70 x 0.5 = € 27,234.35

The pension capital is equal to:

[(€ 55,986.80 x 1.75% x 30) – (€ 27,234.35 x 30/40)] x 12.085 = € 108,369.91

Can the pension capital be converted into a pension?

Upon retirement, a participant has a choice to convert the pension capital into a life-long annuity benefit. The monthly benefit will be determined in accordance with the factors that apply to him/her at the time.

Cover upon death

Depending on the participant’s civil status and the number of children in his/her household, a death cover has been arranged for the beneficiaries of participants employed by DuPont Belgium.

The capital upon death will be paid out by default to the beneficiaries in the priority order as set out in the pension regulations.
There is an option of deviating from this rule by assigning a third-grade beneficiary and/or to change the aforementioned beneficiary order. Please find the relevant change form in the menu on the right of this page under Downloads.

The capital upon death will by default be paid out in the following priority order:

  1. The employee’s partner, except if, at the time of the participant’s death:

– the spouses are legally separated; or
– legal divorce proceedings were started.

  1. If 1 is not applicable, to the children (the definition of children includes all legal, legally adopted, adopted or recognised biological children).  If one of the children died before the participant’s date of death, the portion of such child will be distributed to his/her children, if any.  If the relevant deceased child did not have any children, the relevant portion will be equally distributed to the other children of the participant.
  2. If 2 is not applicable, to the beneficiaries assigned by the employee in a signed appendix.
  3. If 3 is not applicable, to the parents of the participant in equal parts.  If there is only one parent, then the full amount is allocated to the surviving parent.
  4. If 4 is not applicable, to the brothers and sisters, if any, of the participant in equal parts.  If a brother or sister died before the participant’s date of death, his/her share will be allocated to the children of the relevant brother or sister.  If there are no such children, to the other brothers or sisters of the participant in equal parts.
  5. If 5 is not applicable, to DEPF.

Surviving dependant’s pensions for married or cohabiting participants

Upon the death of a married or cohabiting participant, the pension plan provides a monthly surviving dependant’s pension for the person who is the participant’s partner at the time of the participant’s death.

Upon the death of the participant, his/her beneficiary has the option of converting the surviving dependant’s pension into a one-off capital upon death.

The surviving dependant’s pension amounts to 60% of the pension formula applied to calculate the retirement pension, taking into account the service years up to the standard retirement age. The arithmetic mean of the salary is not taken into account for the calculation of the surviving dependant’s pension.

The death cover is equal for participants cohabiting without marriage (same sex or not) and for married participants, insofar as they form an actual household. Cohabiting participant is defined as a participant living together with a person, on the condition that the participant can provide such proof to the employer by submitting an official deed issued by the registrar’s office of the place of residence.

It is important to note that getting married after divorce will not affect the entitlement to surviving dependant’s pension.

Example: a participant dies at age 50 after 25 years of employment at the company. He would have had 40 service years at age 65.

S = € 2,383.60 x 13.9967 = € 33,362.53

S is lower than the pension ceiling (S1), therefore S is applied in the formula;
50% of S = € 16,681.27

The annual surviving dependant’s pension then amounts to:

60% x [(€ 33,362.53 x 1.75% x 40) – (€ 16,681.27 x 40/40)] = € 4,003.50

The surviving dependant’s pension is supplementary to any statutory pension received by the surviving dependant.

Capital upon death for single persons participating in the pension scheme

The pension plan provides a capital to be paid out upon death of a single participant, amounting to:  100 % S + 75% S per child.

The definition of child is:

  1. any child of the participant and any child of the participant that is adopted, legally recognised or a recognised biological child (born to or conceived/fathered by him/her) that is entitled to statutory child support. This includes the children of a divorced participant who lives separate from his/her non-participating ex-partner, whose children are listed on his/her tax return.
  2. each child that is one of the two family members in terms of the tax return (legally or actually). This includes children that are stated on the tax return of the cohabiting partner, and children that the participant’s new spouse brought in from a former relationship.
  3. any other child for which the participant is entitled to statutory child support. This includes cousins or godchildren that are the economic responsibility of the participant (not on the tax return due to being a second-degree relation), for which the participant is entitled to statutory child support.

Relating to children within the scope of 2 and 3, proof is required in the form of a residence certificate proving that the children involved are part of the family and live at the same address. Payment of an orphan’s pension to children of a cohabiting partner (situation as referred to in 2) is subject to the requirement of the cohabiting partner’s eligibility for a surviving dependant’s pension.

Example: a participant dies during active employment at the company. At the date of his death, he has no partner, but he does have two children that fall within the definition of the pension rules.

S = € 3,452.90 x 13.9967 = € 48,329.21

The capital upon death for the surviving beneficiaries amounts to:

(100% + 2 x 75%) x € 48,329.21 = € 120,823.03

Orphan’s pension

An orphan’s pension will be paid out to the children for which the deceased participant is responsible. Normally, such a pension will be paid until the child’s 18th birthday. If the child is disabled or attending full-time day education, the orphan’s pension will be paid out up to age 25. For the description of the term ‘children’, please refer to the explanation in the previous item.

We request you to verify that the children that should be defined as ‘under your responsibility’ in your specific case is actually classed as such with the local HR department.

The orphan’s pension is expressed as a percentage of the pension formula applied to calculate the retirement pension. These percentages are 10% for each half orphan (an orphan with one surviving parent) and 20% for full orphans (a child without surviving parents) and children of deceased single participants (such in the broadest sense of the word, in particular all single participants that are not classed as married or cohabiting by the pension rules).

An orphan’s pension cannot be converted into a capital sum to be paid out. The arithmetic mean of the salary is not taken into account for the calculation of the orphan’s pension.

Example: a participant dies at age 50 after 25 years of employment at the company. In addition to his widow, he also leaves 2 children. He would have had 40 service years at age 65.

S = € 2,383.60 x 13.9967 = € 33,362.53

S is lower than the pension ceiling (S1), therefore S is applied in the formula;
50% of S = € 16,681.27

In addition to the annual surviving dependant’s pension for the widow, the pension fund pays out an orphan’s pension. The orphan’s pension per child amounts to:

10% x [(€ 33,362.53 x 1.75% x 40) – (€ 16,681.27 x 40/40)] = € 667.25 per year

Disability pension

A participant with economic occupational disability of at least 25% due to disease or an accident in his/her private life is entitled to a disability pension subject to a qualification period of 181 days. This monthly pension is paid at the end of every month.

The disability pension is terminated:

  •  As soon as the occupational disability rate falls below 25%;
  •  Upon the death of the participant;
  •  Upon retirement or upon the start date of the unemployment with corporate supplement (SWT) system, and latest at the standard retirement date.

This pension is calculated as follows: 15% x S1 + 70% x S > S1
where S1 = the applicable ZIV pension ceiling ‘for benefits’, i.e. € 42,404.95 (2017).

In the event of partial occupational disability or part-time work, the disability pension is reduced proportionally. The arithmetic mean of the salary is not taken into account for the calculation of the disability pension.

Example: a participant is classed as 50% economically occupationally disabled as per 1 January 2017. His monthly wage amounts to € 3,500. On 1 July 2017, the participant is still occupationally disabled. As from that date, he is entitled to the following disability pension:

(15% x € 42,404.95 x 70% x (€ 48,988.45) – € 42,404.95)) / 12 = € 914.10 per month,
where S = € 3,500 x 13.9967 = € 48,988.45.

How is the pension plan funded?

The cost of the pension scheme is shared between the company and the participants. Participants subject to the so-called ‘blue collar worker’ provision do not pay an employee contribution.

The participant pays 4.7% on the portion of his/her annual remuneration in excess of the pension ceiling (S1), where the annual remuneration is equal to 13 times the gross monthly wage of the month of April, plus 12 times the monthly average shift allowance of the past year.

The company pays all further contributions required to pay for all the benefits set out in the pension rules in the relevant events to the participants and their beneficiaries, i.e. the pension capital, the benefits upon death and the benefits upon occupational disability.

The financing cost to the company is therefore significantly higher than the employee contributions.

At a monthly salary amounting to € 2,383.60, the annual wages amount to € 30,986.80 (based on 13 months). As this falls below S1 (€ 54,648.70), the personal contribution in this example is € 0.

At a monthly salary amounting to € 4,500.00, the annual wages amount to € 58,500.00 (based on 13 months). The personal contribution in this example is equal to:

4.7% * (€ 58,500.00 – € 54,648.70) = 4.7% * € 3,851.30 = € 181.01 per year, i.e. € 15.08  per month.

Pension statements

For the duration of your active participation in the pension plan of Section DuPont Belgium, you will receive a pension statement from DEPF by post on an annual basis. This pension statement shows information regarding:

  • the pension benefits you have accrued to date;
  • your future pension capital;
  • the death cover;
  • any payments upon occupational disability.

If you require more information regarding the pension statement, please contact CallHR or DEPF’s pension administration. Please find the contact details in the menu on the right of this page under ‘Contact’.

The website www.mypension.be also provides an overview of all your rights and entitlements in all supplementary pension plans you accrued at DuPont or at your previous Belgian employers.