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Thomson Reuters Practical Law | Regulation of state and supplementary pension schemes in Luxembourg

A Q&A guide to pensions law in Luxembourg.
The Q&A gives a high level overview of the key practical issues including: state pensions; supplementary pensions; funding and solvency requirements; tax on pensions; business transfers; participation in pension schemes; and employer insolvency and overall scheme solvency.


National government pensions


1. Do employers and/or employees make pension contributions to the government in your jurisdiction?


Contributions paid to the government


In Luxembourg, all persons engaged in a professional occupation (whether employed or self-employed) or drawing a work-related benefit (sickness benefit, maternity benefit, workplace accident compensation or unemployment benefit) are covered by the general pension insurance scheme.
Public sector agents (that is, those employed by the state, the local authorities or the Luxembourg rail operator CFL) are subject to a special pension regime with its own specific conditions.
The statutory general pension insurance scheme covers both old-age pensions and invalidity or survivors' pensions and is financed by a flat rate of 24% of capped employment income supported in equal shares by employers (8%), employees (8%) and the state (8%). Employment income is capped at five times the minimum social wage (that is, EUR10,709.97 at index 834.76 as of 1 January 2020).
To read more, follow the link to the complete Pension Law Luxembourg Guide.

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