Luxembourg

Social security benefits (1st pillar) are higher compared to the majority of other EU countries. Implementation of specific legal instruments in company sponsored pension plans (2nd pillar), together with favourable fiscal treatment, develop national and European activity in pension funds.

Social security

The legal normal retirement age is 65, both for men and for women. The calculation of the benefit does not directly depend on the retirement age: the pension is a function of the number of years of insurance and of the professional income (limited to the contribution ceiling) during this period. There is no reduction in case of early retirement.

Company pension plans

Many members affiliated to a supplementary pension scheme are members of a defined benefit plan, financed exclusively by the employer. Defined contribution plans tend to develop in smaller companies. The retirement age ranges from 60 to 65. Members have the opportunity to pay additional contributions which are invested into a scheme separate to the supplementary pension scheme financed by the employer. A pension plan very often includes death and disability coverage.