Luxembourg: The domicile of choice for financial services - Alfi

Labour, Healthcare
and Pensions
1. Labour Market
The Grand Duchy’s demographics are reflected
in labour-market structures, with people from
other countries accounting for more than
70% of the working population. Immigrants
(foreign residents) make up part of this total,
while commuters from neighbouring countries
also represent a large proportion. Benefiting
from its central geographical position,
Luxembourg has been able to round out its
multilingual workforce with personnel from
the UK, Ireland, Belgium, France, Germany
and other countries, who together make up a
dynamic expatriate community.
The financial sector employs over 42,000 people,
not counting the employees of service providers
such as auditors and lawyers.
2. Healthcare
In Luxembourg, all workers are automatically
covered by one of the country’s health insurance
funds. Depending on the nature of the
treatment, this covers between 80 and 100%
of the fees charged by doctors and dentists.
All doctors operate within the framework of
the national healthcare system and must charge
regulated fees to patients holding a European
health insurance card or an equivalent certificate
of insurance.
Patients generally pay medical fees and then
apply for reimbursement at a health insurance
centre, presenting the doctor’s bill and proof
of payment.
Health insurance also covers children and
spouses / partners.
3. Pensions
Luxembourg has a three-pillar pension system:
The state pension system applies to all persons
working in Luxembourg. In addition, there
are several types of occupational retirement
vehicles, such as complementary pension
schemes set up by an employer. Finally,
individual pension vehicles are available and
benefit from a special tax regime.
The legal retirement age in Luxembourg is 65,
although employees can – subject to certain
conditions – qualify for an early pension at the
age of 57. In principle, an employee must have
been registered with the Luxembourg social
security authority for at least 120 months to
receive his or her full old-age pension.
For employees who are citizens of EU and
EEA member countries (the latter including
Liechtenstein, Iceland, and Norway), as well
as for Swiss nationals, the Luxembourg social
security authority in principle accepts the
insurance periods to which an employee is
entitled under foreign legal provisions. Note
that this is not applicable to non EU-nationals
unless Luxembourg has signed bilateral conventions
with a third country (“treaty country”)
providing for specific provisions in this respect.
Both employers and employees contribute 8%
into the state pension fund. The employee’s
share is deducted from his or her monthly gross
salary.
Luxembourg pensions are calculated on the basis
of a 40-year pay-in period. For each year beneath
this 40-year minimum, 1/40 of the minimum
pension is deducted. Employees can also choose
to participate in an optional state pension fund.
Luxembourg will also pay out the Luxembourg
state pension to a retiree residing in another
country without any reduction, modification
or suspension of the amount of the pension,
depending on the individual case.
For further information, please contact
www.cnap.lu, the national pension insurance
administration.
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