The pension system adjustments will take effect on January 1, 2026.

What changes?

On December 18, 2025, the Chamber of Deputies passed the bill to adjust certain pension regulations.

These adjustments aim to strengthen the financial sustainability of the system while maintaining the legal retirement age of 65. They are intended to stabilize the finances of the general pension scheme until 2042 and to preserve reserves up to 2050.

The measures are based on two main pillars:

  • the gradual alignment of the actual retirement age, currently around 60, with the legal retirement age of 65;
  • the increase of the total contribution rate from 24% to 25.5%.

Adaptations

Increase in Contribution Rate

To build up the insurance record, currently 24% of gross salary is paid monthly into the public pension system: 8% by the employee, 8% by the employer, and 8% by the state.

From January 1, 2026, the contribution rate will increase to 25.5%, with each party contributing 8.5%. Self-employed individuals will contribute 17%, with the state contributing 8.5%. In the public sector, employees will contribute 8.5%, while 17.5% is funded by the state budget.

This adjustment will remain in effect until 2032.

Gradual Pension

With a 40-year insurance career, an employee can retire before the statutory age of 65. Thanks to the new progressive pension, they will be able—subject to the employer’s agreement—to continue working part-time while receiving a portion of their pension.

This allows for a gradual transition into retirement while still building up their insurance career with the National Pension Insurance Fund (CNAP). This model already exists in the public sector. From January 1, 2026, individuals under the general scheme, i.e., in the private sector, will also be able to benefit from it.

This model already exists in the public sector. From January 1, 2026, employees in the general system (private sector) will also be able to benefit.

Flexible Recognition of Study Years

As at present, it will be possible to recognize up to 9 years of study (without income) in the insurance record, starting from age 18.

From January 1, 2026, the previous age limit of 27 will be removed.

This change provides greater flexibility to include these so-called “complementary periods” in the insurance record.

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Extension of the Insurance Record

The legal retirement age in Luxembourg is 65 years. Early retirement from age 60 is possible if an employee has an insurance record of at least 40 years.

The insurance record includes compulsory insurance periods, additional periods, continued periods, and retroactive purchase of periods.

From July 2026, the 40-year insurance career will be gradually extended by a total of eight months until 2030:
2026 + 1 month, 2027 + 2 months, 2028 + 4 months, 2029 + 6 months, and 2030 + 8 months.

Examples:

  • A person with a 40-year insurance record in October 2026 must contribute 1 additional month and can then retire early in November 2026.
  • A person retiring early in February 2030 will contribute 8 extra months and can then retire early in October 2030.

Not affected are:

  • Early retirement at 57 years after at least 40 years of compulsory insurance periods
  • Early retirement for shift work, night work, or early retirement due to corporate restructuring
  • Persons retiring at 65 years
  • Persons already receiving a pension

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