Pensions in Luxembourg

The pension system in Luxembourg is based on three pillars:

1. The statutory pension
2. The supplementary pension paid by the employer (optional)
3. The supplementary pension built up personally (optional)
   

The statutory pension

The granting and amount of statutory pensions in Luxembourg take three criteria into account:

• Age: the legal retirement age is 65. But early retirement is possible at 57 or 60 under certain conditions.

• The period of professional activity during which you have paid contributions (called “stage”): 120 months minimum within the European Union, Switzerland, Liechtenstein, Norway and/or Iceland (including at least one year in the Grand Duchy).
A forty-year stage must be proven in order to benefit from a full pension.

• Income received during the stage.

More information at http://www.cnap.lu/les-pensions/pension-de-vieillesse/les-pensions-de-vieillesse/

The supplementary pension paid by the employer

Your employer can elect to offer you a pension scheme which supplements the statutory State retirement pension.

The supplementary pension built up personally

To avoid risking a drop in your standard of living when you retire, you are strongly advised to take out retirement insurance from a private Insurance Company like AXA. This will supplement the statutory pension and the employer's pension scheme.

In addition, these products are tax-deductible (Art. 111bis LIR – Luxembourg Income Tax Law), provided that they are taken out for a minimum of ten years (more information on our Taxation page).

AXA offers two retirement insurance products: Alizea and Save for Life Pension.

Pension Insurance to prepare for your retirement with no worries

Opting for a supplementary pension in Luxembourg in the form of retirement insurance is highly recommended to provide for your needs in your old age. This insurance constitutes a cash reserve that is paid to you after retirement, either in one instalment or on a monthly basis. Here are the two types of retirement insurance available in Luxembourg.

100% guaranteed capital pension insurance

The 100% guaranteed capital retirement insurance is a simple solution that allows you to invest your cash without being subject to market fluctuations. You enjoy a guaranteed rate for the duration of your policy and there is no risk to your savings.

Axa offers 100% guaranteed capital retirement insurance with the Alizea package.

Pension insurance to help build your savings

If you would like a portion of the amount of your insurance to be invested in the financial markets to earn higher returns, this is also possible. This type of retirement insurance policy allows you to build your savings while putting it aside for your old age.

With the Save for Life Pension, Axa offers a 50/50 solution: half of your insurance is invested in shares, and the other half benefits from a guaranteed interest rate. The risk reduces gradually as you approach retirement in order to maximise your returns.

What happens if I die before the end of my retirement insurance?

Whichever solution you choose, your saved capital will be returned to your loved ones in the event of death. At the start of the policy, you will designate a beneficiary to whom the amount will be paid if you die before the policy matures.

For how long can I benefit from retirement insurance?

You can take out retirement insurance for as long as you wish. The earlier you take it out, the higher the amount redistributed.