The gradual pension

A gradual pension and an early old-age pension are two distinct schemes, although both allow individuals to reduce or end their professional activity before reaching the statutory retirement age of 65.

• Gradual pension

With your employer’s agreement, you reduce your working hours while receiving a compensatory allowance corresponding to a portion of the early old-age pension to which you would be entitled.

• Early old-age pension

You may claim your pension before reaching the statutory retirement age of 65, provided you satisfy the legal eligibility requirements. You may either cease working altogether or continue a professional activity, subject to the applicable rules on the accumulation of pension benefits and employment income.

Yes, provided that you meet the eligibility requirements for an early old-age pension and reduce your working hours in accordance with the applicable legal provisions.

In addition, you must:

• have worked at least 75% of full-time hours during the three years preceding your application;
• reduce your working hours by at least 25%; and
• continue to work at least 16 hours per week.

Yes. Access to the gradual pension scheme is subject to your employer’s agreement and requires the signing of an amendment to your employment contract.

The gradual pension allowance corresponds to the amount of the early old-age pension to which you would be entitled, multiplied by the percentage reduction in your working hours. The allowance is therefore proportional to the reduction in your working time.

Yes. It is possible to transition from a gradual pension to an (early) old-age pension, provided that you meet the relevant eligibility requirements.

However, you must submit an application to the CNAP several months before the desired pension commencement date.

Yes. If you meet the statutory age and insurance period requirements, you may apply directly for an early old-age pension. It is not necessary to receive a gradual pension before being granted an early old-age pension.

In principle, this is possible from the age of 57 or 60. Entitlement depends on your age as well as the nature and duration of the insurance periods completed during your professional career.

The pension is calculated on the basis of your insurance record and the contributory earnings received throughout your working life.

• For a gradual pension

Before initiating the procedure with your employer, you must first request a certificate confirming the date from which you become eligible for the gradual pension from the CNAP. The certificate can be requested here.

• For an early old-age pension

You must submit an application to the CNAP and provide the supporting documents required for your individual situation. The application form is available here.

The gradual pension allowance itself does not affect the amount of your statutory old-age pension.

However, social security contributions paid on the portion of salary earned while receiving a gradual pension are taken into account when calculating your old-age pension payable from the age of 65.

No. The gradual pension scheme is governed by the provisions of the Luxembourg Labour Code, which do not apply to professional activities carried out outside Luxembourg.

Consequently, if you work abroad, you are not eligible for a gradual pension, even if you satisfy the conditions for an early old-age pension.