What are the different types of pension insurance pillar?

Q: What are the different types of pension insurance pillar?

<h1>In Luxembourg, there are 3 pillars of pension insurance:</h1> <div><strong>1st pillar: Mandatory social security system</strong><br><br></div><div>Being employed in Luxembourg also means that you're automatically contributing to the public social security system. A part of that contribution is used to fund a public pension plan of which every current or former Luxembourgish employee can benefit from when reaching the retiring age of 65 years. At that age you'll be granted a public pension. You can find <em>the sum of those contributions</em> on your annual salary certificate*.</div><div>Maximum deduction: none.</div><div><br><strong>2nd pillar: Supplementary pension scheme</strong><br><br></div><div>This plan is a mechanism set up by certain companies. It is financed mainly by your employer. In addition to your employer's contributions, you also have the option of making a personal contribution.</div><div>The deductible amount is shown on your salary certificate under "Supplementary pension scheme (LRCP / RCP)".</div><div>Maximum deduction: €1,200 per year per taxpayer.</div><div><br><strong>3rd pillar: Private pension plan</strong><br><br></div><div>This private pension plan contract can be taken out on your own initiative. It allows you to reduce your tax liability and benefit from additional income in the future.</div><div>The deductible amount is shown on the annual insurance tax certificate provided by your insurance company.</div><div>Maximum deduction: €3,200 per taxpayer</div><div><br></div>

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Accepted Answer

In Luxembourg, there are 3 pillars of pension insurance:

1st pillar: Mandatory social security system

Being employed in Luxembourg also means that you're automatically contributing to the public social security system. A part of that contribution is used to fund a public pension plan of which every current or former Luxembourgish employee can benefit from when reaching the retiring age of 65 years. At that age you'll be granted a public pension. You can find the sum of those contributions on your annual salary certificate*.

Maximum deduction: none.

2nd pillar: Supplementary pension scheme

This plan is a mechanism set up by certain companies. It is financed mainly by your employer. In addition to your employer's contributions, you also have the option of making a personal contribution.

The deductible amount is shown on your salary certificate under "Supplementary pension scheme (LRCP / RCP)".

Maximum deduction: €1,200 per year per taxpayer.

3rd pillar: Private pension plan

This private pension plan contract can be taken out on your own initiative. It allows you to reduce your tax liability and benefit from additional income in the future.

The deductible amount is shown on the annual insurance tax certificate provided by your insurance company.

Maximum deduction: €3,200 per taxpayer