My IPS: frequently asked questions

In an Individual pension scheme, you can build up a supplementary pension in a tax-efficient way. The contributions to build up that supplementary pension are paid by the company, and are deductible as business expenses.

The tax authorities have determined how much supplementary pension you can build up in a tax-efficient way in your IPS. This is the so-called 80% rule. In other words: your state pension and your supplementary pension together cannot exceed 80% of your last ‘normal’ income.

To calculate this 80% fiscal limit in your IPS, we need your ‘last normal gross annual income for the relevant financial year’. In tax terms, we refer to ‘last normal gross annual remuneration’.

We need your ‘last normal gross annual income for the relevant financial year’ in your IPS. What exactly is meant by that?
 

• The remuneration you receive for your activity as a self-employed business manager
  
  Remuneration includes your gross salary as a self-employed business manager and benefits of all kinds received from your company (a company car, a smartphone, etc.) It does not cover other income you receive for other activities, such as an employee remuneration or other self-employment income.

• Only the remuneration you receive from the company that set up your IPS
  
  Therefore, it does not include any remuneration you receive from any other company you also manage.

• It is the normal annual remuneration
  
  This is the sum of your regular and monthly remuneration for the relevant financial year.
  What income is covered by this can be found in the FAQ What income qualifies as gross annual income in an IPS? 
  
  
• It is the gross annual remuneration
  
  This is the amount of remuneration before social security contributions, other business expenses and taxes. It is not your net income that is deposited into your account.

• It is the gross annual remuneration
  
  This is the remuneration granted in the current financial year, i.e. over a 12-month period. Even in an extended financial year, you should work with an annual remuneration for 12 months.
  
  Caution: Be careful with increases/decreases of your gross monthly salary during the financial year.
  More explanations can be found in the FAQ How do I work out my gross annual income in an IPS if my income increases/decreases during the financial year?

Your accountant is best placed to assess in your particular situation what counts as regular and monthly remuneration for your IPS.

However, we can provide a few guidelines for you (and your accountant) based on the tax authorities' instructions and our own experiences:

What income is included in an IPS?
 

• Fixed gross monthly salary
• Annual holiday allowance
• Annual end-of-year bonus
• Benefits in kind recorded monthly and that are regular in nature (private use of a company car, private use of a mobile phone/smartphone, private use of a company property, etc.)
• Quarterly social security contributions paid by the company and also recorded as a benefit in kind
• Monthly rental income from a building or office that you lease to the company and for which you receive rental income each month, provided that this rental income is reclassified as remuneration
   

What income is not included in an IPS?

• Occasional increases in the monthly salary
• One-off or exceptional bonuses
• Profit-based bonuses, dividends, profit-sharing

• Increase in gross monthly salary during the financial year
  If there is a moderate increase in the gross monthly salary during the financial year, it may be included in the gross annual salary for an IPS.
  However, please note that it should only count for those months in which this increase applies.

Example:
A business manager receives a gross monthly salary of 3 000 euros from January to October. From November on the gross monthly salary is 4 000 euros.

INCORRECT calculation of annual remuneration: (4 000 euros x 12) = 48 000 euros
CORRECT calculation of annual remuneration: (10 x 3 000 euros) + (2 x 4 000 euros) = 38 000 euros
 

• Decrease in gross monthly salary during the financial year
  If there is a moderate decrease in the gross monthly salary during the financial year, it must be included in the gross annual salary for an IPS.
  However, please note that it should only count for those months in which this decrease applies.
  

Example:
A business manager receives a gross monthly salary of 4 000 euros from January to June. In July, it is decreased to 3 500 euros.

INCORRECT calculation of annual remuneration: (3 500 euros x 12) = 42 000 euros
CORRECT calculation of annual remuneration: (6 x 4 000 euros) + (6 x 3 500 euros) = 45 000 euros
 

• Receive a varying monthly salary?
  If your gross monthly salary varies during the financial year, you can apply the following rule to work out your gross annual remuneration in your IPS.

Strictly speaking, you should take the amount for your lowest monthly gross salary and multiply it by 12.

In practice you can take the gross monthly salary closest to the average like this:

1. Add up all your monthly gross salaries (12 months)
2. Divide this sum by 12
3. Round to the nearest unit
4. Multiply by 12
 

• Don't receive a salary every month?
  If you don’t, be sure to contact your intermediary for advice on how to calculate the tax limit in your IPS.
   

In an Individual pension scheme, you can build up a supplementary pension in a tax-efficient way. The contributions to build up that supplementary pension are paid by the company, and are deductible as business expenses.

The tax authorities have determined how much supplementary pension you can build up in a tax-efficient way in your IPS. This is the so-called 80% rule. In other words: your state pension and your supplementary pension together cannot exceed 80% of your last ‘normal’ income.

Are you accruing a supplementary pension managed by an insurer other than KBC Brussels Insurance?
Then be sure to keep those schemes up to date in your IPS. That is important to calculate your fiscal 80% limit based on actual amounts. At KBC Brussels these amounts are in fact not known.

Attention: Even if you no longer pay contributions into these supplementary pension schemes, we need actual amounts.

What supplementary pension is involved?

It is about supplementary pension schemes of the second pillar.

• Which supplementary pension schemes belong to the second pillar?
  
  
  • VSPSS or Social VSPSS
  • Pension plans for independent medical professionals (NIHDI)
  • Individual Pension Scheme (IPS)
  • Pension Agreement for the Self-employed (SPPA)
  • Employer pension scheme (group insurance)
  • Pension Fund
  • Pension Scheme for the Self-employed (group insurance)
  • Private pension agreement (Business manager insurance)
     
• Which supplementary pension schemes do not belong to the second pillar?
  
  
  • Pension saving and long-term saving are not schemes of second pillar, and therefore are not included in your IPS.

Unless it’s a recent scheme, you will find all the details for your supplementary second pillar pension schemes in mypension.be.

Every year in early September, all supplementary pension schemes in ‘Mypension’ are updated with data relating to the situation on 1 January of that year.
For any supplementary pension schemes, you copy the amounts relating to the acquired benefit and expected benefit from Mypension into your IPS.

Attention: you must do this ONLY for the supplementary pension plans not managed by KBC Brussels Insurance.

Remark: A group insurance contract of KBC Brussels Pension Fund is not managed by KBC Insurance.

Where can I find these amounts in Mypension?
Go to www.mypension.be and log in using itsme® or your card reader (via laptop).

Click ‘My supplementary pension’.

• On your computer (desktop or laptop):
  
  
  • Click ‘My complete file’ to the right of the screen.
  • Confirm the year concerned.
  • Open the downloaded PDF and scroll to ‘Detailed records of your pension plans as a self-employed person’.
  • Copy the following two amounts into your IPS for each pension scheme NOT managed by “KBC Insurance”:
    • Acquired benefit on 01-01
      (if it’s not stated, copy the amount given for Pension Reserve on 01-01)
    • Expected benefit on 01-01
  • Repeat these steps for ‘Detailed records of your pension plans as an employee’.
     

• On your smartphone:
  
  
  • Tap ‘Pension schemes as an employee’ in the PENSION RESERVE section.
  • In the overview, tap ‘Breakdown’ for each pension scheme whose PENSION BODY is not KBC Insurance.
  • Scroll down and tap ‘Download detailed record’.
  • Copy the following two amounts into your IPS for each downloaded record:
    • Acquired benefit on 01-01
      (if it’s not stated, copy the amount given for Pension Reserve on 01-01)
    • Expected benefit on 01-01
      
  • Repeat these steps for ‘Pension plans as a self-employed person'.

If you have or have had a career abroad and you are saving/have saved towards a supplementary pension, you should also include this supplementary pension information in your IPS. You won’t find this information in Mypension.

You don't know where to look for or request the information? Your insurance agent will we happy to help you.