Supplementary Scheme for Private Sector Employees

Mandatory participation

• Sector-specific, based on collective agreements for employees in the private sector, agricultural sector and public sector with private contract.

General finances

• PAYG-financed from insurance contributions.

Contribution rates

• Fixed share of monthly gross earnings paid by the employee and the employer; with contribution assessment ceiling. 
• The contribution rates are dependent on income brackets: for annual salaries of up to EUR 40,524 (in 2019), the rate is 6.20%, shared between the employee (2.48%) and the employer (3.72%); for annual salaries ranging from EUR 40,524 to EUR 324,192 (in 2019), the rate is 17%, shared between the employee (6.8%) and the employer (10.2%).

Taxation of contribution payments

• Tax exemptions for insurance contributions.

• he social partners administrate the scheme autonomously.
• A joint committee (comité paritaire) is responsible for the interpretation of the collective agreement and determines the general measures affecting the agreement.
• A complementary pension scheme federation (fédération de retraite complémentaire) is in charge of the actual functioning of the scheme.

Qualifying conditions

• The (minimum) retirement age is the same as in the general scheme for employees in industry and commerce (62 years). 
• There is no minimum qualifying period. 

Early retirement

• Possibility to claim pension 10 years (max.) before retirement age with permanent negative adjustments.
• Special conditions for early retirement available for persons with disabilities or long career or working in arduous jobs (see general scheme for employees in industry and commerce).

Deferred retirement

• Retirement can be deferred with positive adjustments to pension payments (dependent on the duration of the deferral, e.g. 10% for two years).  

Combining employment & retirement

• Termination of employment is usually not a precondition for claiming pension benefits.

Pension benefits

• The benefits are determined by a system of points acquired according to the contributions paid during the career.

Factors for benefit calculation

• The sum of the benefit equals the point value multiplied by the number of points.
• There are various factors (such as child-raising periods) that can increase the benefit. 
• Adjustments: the point value is readjusted every year.

Taxation and social security contributions

• Benefits are subject to income tax. 
• Pension benefits are subject to mandatory health insurance, CSG, CRDS and CASA.