Retirement is an important stage in life that is generally eagerly anticipated by employees and the self-employed after years of hard work. But what should you expect if you spent part of your career abroad? myLIFE has the answers.
Is it possible to combine several pensions?
EU provisions on social security coordination establish the principles with which the public authorities, jurisdictions and institutions of each country must comply. They guarantee all employees and self-employed persons equal treatment. They also define the legislation applicable to anyone who has worked in different countries, irrespective of which countries are involved.
NB: the benefits granted, the terms on which they are granted, the calculation of these benefits and the amounts to be paid fall within the jurisdiction of the individual countries.
If you have worked in a number of different countries, you have most likely paid social security contributions in each country where you worked. And each country where you worked must keep a social security file until you reach retirement age, when they must pay you an old age pension.
The principle of the aggregation of periods of insurance contributions (obligatory, continuous, voluntary, as well as periods of retroactive purchases and supplementary periods) guarantees that all of the periods recorded in different countries will be taken into account.
The amount of the partial pension allocated by each country is calculated based on the length of the periods of insurance contributions in that country.
How is the amount of your pension determined?
The amount of the partial pension allocated by each country is calculated based on the length of the periods of insurance contributions in that country. It also depends on the amount of contributions paid during your working life in each country. In this way, each EU member state determines the proportion of the pension that is attributable to the insured person.
Let’s take the case of an insured person, who has spent part of their working life abroad and is entitled to the Luxembourg pension based solely on the periods of insurance contributions completed in Luxembourg (at least 120 months). A dual calculation is carried out for the pension. Firstly, the amount is calculated based solely on the periods of contributions in Luxembourg (direct national calculation). Next, the amount is calculated pro rata based on the periods of contributions in Luxembourg relative to the total periods of contributions in all countries (pro rata theoretical calculation). The amount that is most favourable to the insured person is the one used.
For example: At the age of 65, you apply for the old-age pension, to which you are entitled based on 15 years of insurance contributions paid in Luxembourg. At the same time, you can also prove that you have paid insurance contributions in one or more EU country for an additional 20 years. You are entitled to the Luxembourg pension based on the 15 years of contributions in Luxembourg, so the direct national calculation is based on this. The theoretical calculation is made on the assumption that you paid contributions during for the full period (35 years) in Luxembourg, and the pension resulting from this method of calculation is prorated on the basis of 15/35. The more favourable outcome will be allocated to you.
Useful info: the pension is automatically calculated on the theoretical basis if you are only entitled to a pension on the basis of the aggregated number of periods of insurance contributions in Luxembourg and abroad.
At what age can I draw my pension?
The pension age is determined by each country. In Luxembourg, all workers can request their old-age pension once they reach the age of 65, providing that they have at least 10 years of obligatory, continuous or voluntary insurance contribution periods.
Early retirement and the early retirement pension may be granted from 57 or 60 years of age, respectively, providing the following conditions for contributions are met:
- 40 years of obligatory insurance contributions in the first instance;
- 40 years of obligatory, continuous or voluntary insurance contributions or periods of retroactive purchases or supplementary periods, including 10 years of obligatory, continuous or voluntary insurance contributions in the second instance.
Let’s imagine that you worked for five years in Luxembourg, four in France and two in Germany. As you paid contributions for more than 10 years, the good news is that each of these countries must pay you an old-age pension when you reach retirement age.
If you do not reach 10 years (120 months) of insurance contributions despite aggregating the insured periods in one or more countries linked with Luxembourg by an international agreement on social security, you will not be entitled to an old-age pension. In this case, you are entitled to the reimbursement of the pension contributions you have paid, providing that the foreign organisations do not take the Luxembourg periods of insurance contributions into account when calculating the benefits payable in their country.
In order to qualify for a pension in Luxembourg, you must have made contributions for at least 120 months in one or more EU country, including at least 12 months in Luxembourg. If the period in Luxembourg is below this limit, the monthly contributions will be taken into account by the other EU member state(s), prorata to the period of insurance contributions in each of these countries.
For example: If you have 8 months of insurance contributions in Luxembourg, 10 years in France and 30 years in Belgium, European regulations consider that France should take two months of Luxembourg insurance contributions into account (25%) and Belgium the remaining 6 months (75%), as if these periods of insurance contributions had been made under their legislation.
Reimbursement of the Luxembourg contributions cannot be granted in this case, unless the other EU member states have not taken account of the Luxembourg periods, either when determining entitlement to a pension or when calculating the amount of such pension.
Useful info: the retirement age is set at 62 in France (64 from September 2023), 65 in Belgium (66 from 2025 and 67 from 2030) and 65 in Germany (67 from 2029).
A pension is only granted in a member state if you fulfil the age conditions set in this country.
A pension is only granted in a member state if you fulfil the age conditions set in this country. You gain access to the different elements of your pension as you meet these national conditions. Let’s take the example of someone who worked for 20 years in Luxembourg and 20 years in France. At the age of 60, they are entitled to an amount paid by Luxembourg (on the basis of early retirement). Four years later they will be entitled to the share due by France.
Similarly, a person receiving the French old-age pension may continue to work in Luxembourg until the age of 65, providing legal provisions in France allow the old-age pension and professional income to be combined. A cross-border worker living in France who wishes to receive their French pension while continuing to work in Luxembourg will be able to submit their request in France. When they stop working in Luxembourg, they can send their request for the Luxembourg pension to the CNAP or via the French pension authority. On the other hand, a person living and working in Luxembourg when they retire will make both requests in Luxembourg.
How to get your pension
If you have worked in more than one country, it is advisable to submit your pension application in your country of residence or in the country where you last paid pension contributions. In Luxembourg, you should submit your application to the Caisse Nationale d’Assurance Pension (CNAP). Once your request for the old-age pension or early retirement pension has been received, the CNAP will send the procedural forms required by EU regulations or the relevant international agreement to the pension authorities in the other countries, which will each have kept a contributions file with the information to be exchanged.
If you have worked in several countries, it is advisable to make a request with all the required documentation at least six months prior to the envisaged start date of your pension.
If you have worked in several countries, it is advisable to make a request with all the required documentation (study certificate or degree, statements covering periods worked abroad) at least six months prior to the envisaged start date of your pension. The insurance organisation of each country may directly request the documents to be provided from the insured person. The relevant country will then check the pension entitlement and calculate the proportion of any pension due based on their domestic legislation.
The time taken to process the request will depend on the availability of data and its reliability. It may take several months if investigations are required to collect the information from abroad.
The insured person is then informed of the decision with a copy sent to the insurance authorities in the other countries involved. The award or rejection of the pension can be contested. If awarded, the pension will be paid to you each month.
An estimate of your old-age pension/early retirement pension can be requested from the age of 55 from the CNAP. A worker must provide information on any periods of employment abroad and the same documents as when submitting a pension request. The time needed for a reply can vary between one and six months.
Useful info: Anyone receiving a pension should be affiliated with the health insurance system in their country of residence if they receive a pension or work there. If an EU resident has no income (or pension) in their country of residence, but receives a pension from a different EU country, it is the insurance authority in this country that is responsible for health insurance. Social security contributions are thus deducted from the pension paid. As regards taxation, tax is charged on the Luxembourg pension based on the data sent to the CNAP by the Luxembourg tax authorities (Administration des Contributions Directes).
All of these rules also apply if you have worked in other countries with which Luxembourg has signed a bilateral agreement (outside of the EU).
If you have worked in Luxembourg and in other countries, each of these will, in principle, pay you a part of your pension once you have reached the legal retirement age. However, the amount of this pension will depend on the number of years that you worked in each country, the pension regime in those countries and the contributions that you paid there.