After the millions for the pension fund: why wage costs at the National Bank are higher than in neighboring countries

The fact that the National Bank had to pump more than 100 million euros into its pension fund puts a spotlight on the wages of its employees. The wage policy, which is known to be attractive, has just been adjusted in the war for talent.

Pay policy at the National Bank is receiving a lot of attention, now that it appears that the Belgian central bank had to cough up an extra 109 million euros last year to support supplementary pensions for more than 1,200 employees.

National Bank employees also receive a supplementary pension in addition to their statutory pension. Anyone who joined the bank before January 1, 2017 – a total of more than 1,300 of the approximately 1,900 full-time employees – is entitled to a supplementary pension with a fixed benefit. It is agreed in advance what amount you will receive when you retire. Due to the sharply higher inflation, the costs for that pension pot rose to such an extent that the National Bank had to set aside extra millions for it, the bank’s corporate report shows.

Today, more than a fifth of the National Bank’s employees are over sixty. In its corporate report, the institution says that a third of its staff will retire in the coming years. Does that mean that the Bank will have to pump even more millions into its supplementary pensions in the coming years? Not necessarily. It was heard in the corridors of the National Bank on Tuesday that the exceptionally large deposit was actually a catch-up exercise, after additional financing had not been provided in recent years.

“It is difficult to estimate what the future contributions to the pension plan will be,” says National Bank spokesman Geert Sciot. ‘These contributions depend on various factors, such as inflation or the performance of the financial markets. In addition, the approximately 600 employees who came on board since 2017 are in a different pension plan.” The problem for which more than 100 million euros was set aside last year should disappear in the coming years.

The National Bank has long been known for its very attractive salary and employment conditions. If we do not include the extra 109 million euros for supplementary pensions, wage costs last year amounted to 342 million euros, or an average of 180,000 euros per employee. By comparison: at the Dutch central bank, an institution with almost 2,200 full-time employees, wage costs last year were 296 million euros, or an average of 136,000 euros per employee. At the Banque de France the average was more than 167,000 euros.

Although you cannot compare the remuneration policies of the various European central banks one-on-one. Almost every central bank has a different profile and different powers. While the National Bank in our country is responsible for the supervision of banks, this is not a task of the German Bundesbank, for example.

The National Bank also oversees the insurance sector and collects data for the national accounts. These are all things that do not necessarily fall within the tasks of other European central banks. In addition, Belgium, with Euroclear and Swift, is home to several financial giants for which you, as a supervisor, have to engage specific staff.

In order to bring the right people on board in the longer term, the National Bank has been working for several years on a remuneration policy that is more in line with the rest of the financial sector. Wage growth among executives was already slowed down about two years ago. At the beginning of this year, a new wage system was introduced that should make the National Bank more attractive to outside employees. They need to get pay increases faster.

“In that system, certain baremic wage increases are capped for people who have reached a certain age,” says Sciot. ‘But at the same time we also want to attract people from outside the bank more than before. The advantage of so many people retiring is that we can more easily recruit certain new profiles that better suit what the bank needs.’

However, these employees are also in great demand elsewhere. “We are already seeing a lot of people moving to Frankfurt or to commercial banks,” says Sciot. ‘To ensure that we can continue to attract people with sufficient know-how, we must remain competitive. That is why we align our wage policy with the rest of the financial sector, which, unlike us, can offer bonuses or salary wagons. Although that does not mean that we are among the top 5 percent of payers in the industry.’