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๐Ÿ‡ง๐Ÿ‡ช Belgium /Economy & Trade

Belgian Municipalities Fight Pension Aid Rule Favoring Large Cities

From VRT NWS · () Dutch

Translated from Dutch, summarized and contextualized by DistantNews.

At a glance

News Named sources In the courts
  • Around 60 Belgian municipalities are challenging a federal regulation that provides financial aid for pension costs only to cities with over 100,000 residents.
  • The municipalities argue the regulation is unfair, as all local governments contribute to the same pension fund, and the number of residents is not a reliable indicator of pension liabilities.
  • They are taking the case to the Constitutional Court, seeking an expansion of the federal support to all contributing local authorities based on their actual pension burdens.

Tienen, a Belgian city with approximately 37,000 residents, is spearheading a legal challenge against a federal pension regulation it deems illogical and unfair. The city, alongside about 60 other local authorities, is contesting a rule that limits federal financial assistance for pension costs exclusively to municipalities exceeding 100,000 inhabitants. This group of local governments plans to appeal to the Constitutional Court to amend the regulation.

It concerns a fundamental principle of equality.

โ€” Mayor Jonathan Holslag (Durf) of TienenMayor Holslag explains the core reason for the legal challenge, emphasizing the principle of equal treatment for all municipalities.

Local administrations are responsible for annual contributions towards the pensions of their former tenured employees, a cost known as the "responsibility contribution." This includes not only municipal civil servants but also personnel from sectors like hospitals, police, and fire departments. A law enacted late last year introduced federal aid to cover a portion of these expenses, but its scope is restricted to larger cities.

By 2031, the pension bill for local governments is projected to reach 2.5 billion euros. The coalition of smaller local governments and hospitals argues that the current system is unjust because all local entities contribute to the same pension fund. In Flanders, Tienen, Bierbeek, Tremelo, and Lennik are participating, along with Sint-Agatha-Berchem in the Brussels region. They aim to have the existing regulation re-evaluated.

The number of residents is not a good measure of how much responsibility contribution a city or municipality must pay.

โ€” Mayor Jonathan Holslag (Durf) of TienenMayor Holslag argues against the federal government's criterion for distributing pension cost aid, highlighting that Tienen's specific situation, like having a former hospital, creates higher pension burdens unrelated to its population size.

"This concerns a fundamental principle of equality," stated Mayor Jonathan Holslag of Tienen. He argues that pension liabilities are not directly correlated with population size. "Due to the presence of the former city hospital, Tienen has many pensions to pay. The number of residents is not a good measure of how much responsibility contribution a city or municipality must pay," Holslag explained. The group seeks to extend federal intervention to all local authorities contributing to the Consolidated Pension Fund, advocating for funding to be based on each locality's specific pension costs rather than population size.

But it would be fairer if the financing is determined based on the pension burden of the city or municipality in question.

โ€” Mayor Jonathan Holslag (Durf) of TienenMayor Holslag proposes an alternative funding model, suggesting that financial contributions should reflect the actual pension liabilities of each local authority.
DistantNews Editorial

Originally published by VRT NWS in Dutch. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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