Credit: MSSS

On Thursday 18 December 2025, the Chamber of Deputies (Luxembourg's parliament) adopted a bill concerning adjustments to certain pension schemes.

According to Luxembourg's Ministry of Health and Social Security, this initiative forms part of the government coalition agreement, which provides for a thorough and inclusive review of the long-term sustainability of the pension system. In line with this commitment, a broad consultation with civil society was launched on 4 October 2025. Over several months, discussions were held with social partners, experts and institutions. More than 9,000 citizen contributions helped shape the debate on the demographic, social and economic challenges facing the pension system, noted the ministry.

This collaborative effort has culminated in the adoption of adjustments to certain pension schemes, which will be introduced progressively from Thursday 1 January 2026.

The ministry stated that the measures aim to strengthen the financial sustainability of the system while maintaining the legal retirement age at 65. They are expected to stabilise the finances of the general pension scheme until 2042 and preserve reserves until 2050.

The adjustments are based on two main principles:

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

Main Adjustments

  • Increase in the contribution rate: from January 2026, the overall contribution rate will rise from 24% to 25.5%. The contribution of each party - the State, employees and employers - will increase from 8% to 8.5%. This measure will apply until 2032.
  • Introduction of a phased pension: from 1 January 2026, employees entitled to an early pension will be able, with their employer's agreement, to continue working part-time while receiving a phased pension allowance. This system, already in place in the civil service, will be extended to members of the general pension scheme to facilitate a gradual transition to retirement.
  • More flexible recognition of years of study: the maximum of nine years of unpaid studies taken into account in the contribution record from the age of eighteen remains unchanged. However, the age limit of 27 will be eliminated from 1 January 2026, providing greater flexibility for integrating these periods.
  • Gradual extension of the contribution period for early retirement pensions: the legal retirement age remains set at 65, and early retirement from the age of 57 or 60 will continue to be be possible under certain conditions.

The minimum required contribution period will be gradually increased by up to eight additional months by 2030. As a result, individuals wishing to retire early at 60, after 40 years of recognised insurance (including periods of compulsory, continued and voluntary insurance periods, retroactive purchase periods and supplementary periods), will be required to contribute for a longer period, starting in July 2026:

  • +1 month in July 2026;
  • +2 months in 2027;
  • +4 months in 2028;
  • +6 months in 2029;
  • +8 months in 2030.

In practical terms, this means that a person who has accumulated at least 40 years of recognised insurance (480 months, including non-compulsory periods) by October 2026 will have to contribute for one additional month to be eligible for early retirement. The retirement date would therefore be postponed by one month, to November 2026.

Similarly, an individual reaching 40 years of recognised insurance in 2030 will need to contribute for an additional eight months before becoming eligible for early retirement.

The following groups are not affected by these changes:

  • early retirement from age 57 after 40 years of mandatory contributions;
  • early retirement schemes for shift work or night work, as well as early retirement adjustment schemes;
  • old-age pensions from age 65;
  • individuals already receiving a pension.

The ministry concluded that, in the current economic context and based on the latest available estimates, the measures will stabilise pension financing over the coming years and ensure that key indicators remain within legal limits until 2042. Described as "a decisive step", the measures also highlight the responsibility to preserve a fair and sustainable pension insurance system in the years ahead.

More information on the measures is available at schwätzmat.lu.