Contribution - Pension Fund

What is the pension fund contribution? — In Luxembourg, the pension fund contribution refers to the mandatory contributions made by both employees and employers to the pension fund. These contributions are used to finance the pension benefits that employees will receive when they retire. The contributions are deducted directly from an employee's salary, and the employer also contributes a portion on behalf of the employee.

Who pays the pension contribution? — Both the employee and the employer contribute to the pension fund. The contribution is automatically deducted from the employee's gross salary. The pension system in Luxembourg is based on a "pay-as-you-go" model, meaning current contributions are used to pay current retirees.

How is the contribution calculated? — The contribution is a percentage of the employee's gross salary. In Luxembourg, both the employer and the employee contribute 8% of the gross salary each, making a total contribution of 16%.

Is participation in the pension fund mandatory? — Yes, all employees working in Luxembourg are required to contribute to the national pension fund (Caisse Nationale d'Assurance Pension - CNAP).

Who is eligible for pension benefits? — In Luxembourg, to qualify for a full pension, individuals must contribute to the pension system for at least 10 years. Early retirement is possible at 57 or 60, depending on the length of contribution periods.

Can I receive my pension if I leave Luxembourg? — Yes, Luxembourg has agreements with many countries, allowing individuals to receive their pension benefits even if they move abroad after contributing to the pension system.