President of CNAP, Alain Reuter, talks to us about how to obtain a pension in Luxembourg. Sasha discusses the week's news, and I wish you all a Happy St. Patrick's Day!

Pensions are one of those parts of life-long planning which, due to the nature of our busy days, we don't always have time to think about or organise. Now if you happen to spend your entire working life in Luxembourg, and you're an employee (rather than an independent worker), again you have to think a little less about such issues.

However, a lot of my audience is international with some time spent in Luxembourg, some coming, going and even returning. Again, a lot of these people will come with a partner who may not be working. And so the questions begin. What does one need to do to contribute to a 'pot' where, one day, they may be entitled to a Luxembourg pension? How do you add educational years (yes, that's a thing here)? How do you add child-rearing years?

Alain Reuter and his team get such questions every day. Alain is President of the National Pension Insurance Office (Caisse nationale d'assurance pension - CNAP) and the Compensation Fund of the General Pension Scheme (Fonds de compensation commun au régime général de pension - FDC) since December 2020.

At the moment, about 215,000 are retired (and receiving a pension) in Luxembourg, out of a population of about 650,000. This number has risen by 15% in the last five years. The total amount paid out is about 5.7 billion euros. Of this amount, about 4 billion euros is to people in Luxembourg and 1.7 billion to those now living abroad (in 111 different countries to be precise). The average age of retirement, currently, is 60.1.

Pensions have been in the news for various reasons over the last few months. The most pertinent and, in my opinion, important reason is that there is not going to be enough money in the system to pay for future pensions. In fact, by 2042, the pension fund's reserves will be insufficient to cover expenditure.

Ivaylo Markov, Managing Partner of Thales Capital puts it like this:

"From 2027 we will be spending more than we earn, which will reduce the reserves, which will be depleted in barely 15 years... The current decade will see the number of beneficiaries grow by around 4% each year. This increase is explained by the IGSS as being due to a 'wave of new pensioners, mainly made up of immigrant and cross-border workers recruited from the 1990s onwards"

This is a topic that needs further investigation and I will try to do a follow-up show with your questions. Please send any thoughts to [email protected] with the title 'Pensions - questions for Lisa Burke'

Enjoy the show and have a wonderful St. Patrick's Day celebratory weekend!