Luxembourg pension

There are three types of pensions in Luxembourg: public pensions, corporate pensions and individual pensions. The Caisse Nationale d’Assurance Pension (CNAP) manages public national pensions.

For foreign residents who have paid a national pension in one or more EU member states, the national pension can be combined.You can find out more at This article..

If you are outside the EU, this may be possible if you have a bilateral agreement with the country of your nationality.

For now, let’s take a look at what is available in Luxembourg.

National pension

If you pay your social security contributions monthly, some of these contributions (8% from you and 8% from your employer and state each) will be paid to your state pension. The income covered by the contribution is approximately € 125,000, as it cannot exceed five times the minimum social wage.

What you get depends on how many years you have made a donation before you reach the age of 65 (the official retirement age in Luxembourg).

Who can claim a Luxembourg national pension?

A person who has contributed to social security for 10 years for a pension, or 120 months You are entitled to a pension. A Full pension Only possible if you have contributed 40 years (or 480 months).

If the contribution period is less than 120 months, or if the contribution is very small (for example, a self-employed person with an income lower than the social minimum wage). Contribution to social security pay back debtOr in combination with contributions to state pensions made in other EU countries.

Can also be included The period you couldn’t contribute, Grades from 18 to 27 years old, places rested for childcare, work injuries, etc. This includes illness, unemployment time, apprenticeship, philanthropy, and certain sporting activities.

How much do you earn?

The maximum monthly pension payment cannot exceed € 8,525.50 (latest figures available are for 2020). However, about one-third of those currently receiving pensions in Luxembourg receive a full pension and the rest receive a partial pension. Full pension recipients averaged € 3,900 and partial pension recipients averaged € 1,250.

pension Payments will be indexed Every year to reflect the cost of living. From April 2022, it will be revised upward by 2.5% as follows. Inflation rises And change to salary.

Compulsory insurance It is paid with a monthly social security contribution. Equivalent insurance The period allows you to supplement your 10 or 40 year period, especially if you want to retire early, for example in 60 years. This is a person who was studying until the age of 27, a person raising a child up to the age of 6 (or 18 if the child has a mental or physical disability), a certified care worker, or a disabled person. Applies to some people.

you can Buy insurance retroactively If the mandatory donation is interrupted. You have a 12 month mandatory contribution and must be over 65 years old or have a personal pension. You must also be resident in the EU when submitting your application.

The pension is flat rate When Proportional 1.. It also depends on the length of your career and your salary, with a contribution limit of 5 times the minimum social wage.

The Flat-rate element It is awarded according to the length of the insurance premium, regardless of income.The Proportional element It is based on the professional taxable income you paid during your working life.

The pension is paid one month in advance and if you die, the pension will stop at the end of the month of death.

How to apply

You need to send you application To CNAP a few months before you plan to retire. You can appeal, but your request will be accepted or rejected.

If you have a state-owned pension in another EU country or in a country that has a bilateral pension agreement with Luxembourg, you will be retiring to allow time for relevant departments to contact and confirm payments. You must apply at least 6 months in advance.

You can find all the CNAP forms related to pensions here..

Early retirement

In certain situations you can retire at 57 or 60 years.. To retire at age 57, you must have at least 480 months of compulsory insurance. To retire at age 60, you must have at least 120 months of compulsory insurance. In either case, this could be continuous voluntary insurance, optional insurance, retroactive purchases (for example, to cover hours not working for childcare), or additional periods (27 years old studying). If less than) is included. The length of time you worked in another state is not recorded by CNAP and must be included in your submission form.

If you retire 65 years ago and continue to work, your pension eligibility may be affected. There are several scenarios depending on whether your job is full-time or part-time, office worker or unsalary.

You can use this Pension calculator Find out how your pension is affected from the Chambre des Salaries Luxembourg (CSL). For BIL Useful articles In different scenarios, highlight the implications of someone choosing to work after retirement.

Survivor’s pension

If your spouse or legal partner dies, you can qualify as a survivor. You must be married for at least a year or have a legal affiliation. Also, your spouse should not receive an old-age pension or invalid pension when you get married. This also applies if the divorced spouse has not remarried or is an orphan.

Survivors receive:

The spouse / statutory partner receives the full flat rate and the amount of the special flat rate, and 3/4 of the proportional rate and the special proportional rate amount. Orphans receive 1/3 of the flat rate and 1/4 of the proportional rate (the same numbers apply to special rates in both categories).

Learn more about applying for a survivor’s pension here..

Corporate pension

You and your employer can also pay the company’s pension, where your contributions are tax exempt. These pensions can usually be claimed between the ages of 60 and 65, and pension schemes often include death of service benefits.

There are three types of pension funds in Luxembourg corporate pensions.

1.1. SEPCAV Or a pension savings company with constant capital is similar in structure to an investment trust. A minimum of € 1 million in capital is required within two years of establishment. Members are shareholders, own a certain number of shares, and benefits are paid in one lump sum.

2.2. ASSEP Or a pension savings and loan association, usually a non-profit organization. They can be used as defined benefits or defined contribution plans, or as a hybrid. Benefits can be paid as a lump sum and / or pension.

Both SEPCAV and ASSEP vehicles are supervised by the CSSF or Commission de Surveillance du Secteur Financier, which regulates the banking and investment industry in Luxembourg, and there are no restrictions on investment restrictions.

3.3. ASBL – These tend to be set up by large companies that want to set up their own pension funds. The sponsor company must always guarantee the resolvability and liquidity of the pension fund. ASBL is overseen by the CAA or Luxembourg insurance regulator Commissariataux Assurances. The scheme can be a defined benefit or a defined contribution.

Personal pension

This is basically either a bank savings account or an investment account and you will not have access to money until you retire. Your employer and government will not contribute.

At retirement, you can receive up to 50% on a one-time payment and the rest on a monthly payment. Lump-sum payments from personal pensions are considered special income and are taxed at half the normal rate.

Starting in 2016, you can claim a reduction in taxable income for pension contributions of up to € 3,200, regardless of age. However, the scheme adopted is at least 10 years and must mature at the age of 60-75.

for More information about Luxembourg pensions Access CNAP Website..

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