Have you decided to pursue your career in Luxembourg, just arrived and settled in? Then, welcome to our country! You might be asking yourself how to keep your extra-legal benefits from your previous employer abroad, particularly your pension plan, also known as the Supplementary Pension Scheme (Régime Complémentaire de Pension –RCP) in Luxembourg.
Does your new Luxembourg employer give you this kind of benefit?
Fantastic, it seems you’ve made a great choice! Your retirement is safe and you’ll continue to get all the advantages of such a policy in Luxembourg. Your employer may even provide death and disability cover to protect you and your family in the event of unforeseen circumstances.
If such a plan has been put in place, then you could also supplement it with personal contributions of up to 1,200 EUR per year. This option gives you immediate tax benefits: the amount you contribute reduces your monthly taxable salary, so you get tax relief every month. If you return to your country of origin to work, you’ll get back what you’re owed, untaxed in Luxembourg.
Your new Luxembourg employer does not provide a pension plan.
No problem, but this is your chance to ask them to start one, or, if you're a member of the management, then you might decide to put one in place. In a context where the legal pension system has its limits (link to the article), this kind of benefit can make all the difference when it comes to motivating teams, increasing the loyalty of invaluable employees or attracting new recruits.
LALUX is the national leader in this type of solution and currently insures 40,000 employees from 2,000 companies in Luxembourg. A top-class partner for setting up this Employee Benefits solution.
Discover all the advantages of the lalux-Staff-Protect pension plan > (link to page)
Individual contract
Whether there's a solution in place or not at your company, you have the option to take out an individual policy as part of Article 111bis of the LIR (Income Tax Law).
Even if you (initially) envisage that you’ll only stay in Luxembourg for a few years, a retirement savings plan is always a good idea. With a highly advantageous tax regime, premiums invested in such a contract are tax-deductible up to 3,200 EUR per year. Depending on your tax situation, the benefits you could get represent up to 45% of your annual premium. Whenever you decide to go back to your country of origin, you’ll get back the accumulated savings, without having to pay any tax in Luxembourg.
Discover all the benefits of the individual easyLIFE Pension solution>(link to page).
What should you do with the amount saved by your previous employer?
At the time of your departure, you might have had the chance to recover the pension savings accumulated by your former employer. Depending on your situation, it might be worth looking into reinvesting that amount in Luxembourg. Here, the situation must be analysed case by case. LALUX's professional agents will help you find the solutions that work best for you.