The government of Luxembourg actually seems to want to agree in this regard. In effect, law 7119 deals with:
- The implementation of a European Directive (2014/50/EU) aimed at increasing the mobility of workers between the Member States as regards acquiring and preserving the rights to a supplementary pension;
- The amendment of the law of 8 June 1999 concerning supplementary pension schemes;
- The amendment of the amended law of 4 December 1967 regarding income tax provides for the extension of rights to supplementary pension schemes, (which until now have been reserved for employees) to self-employed professions and freelancers.
As a reminder, the pensions system is based on three pillars:
- The first consists of the statutory pension.
- The second arises from an employer's desire to offer a supplementary pension to his employees.
- The third is, in turn, the private savings of the future pensioner.
In outlining these pillars, it clearly emerges that freelancers and self-employed professions were only able to "participate" in the first and third pillars to improve their situation when the time comes to retire from professional life.
Now, as Pierre Dubru, the Director of Life Businesses at Baloise Assurances Luxembourg says, "The success of the second pillar for employees has never been denied: actually, according to the IGSS [General Inspectorate for Social Security], the number of companies which offer their employees a supplementary pension scheme has grown sixfold in 20 years!"
The proposed reform, if passed as it stands, will therefore open up the second pillar to freelancers and self-employed professions. These will then be able to build up capital for their pension, under advantageous conditions. A tax at source of 20% on each premium paid will exempt all future benefits (retirement capital or life annuity) of any taxes. And furthermore, provided that they do not exceed 20% of their annual net income, the payments made (insurance premiums) will be considered as operating costs by the tax authorities.
In the Grand-Duchy of Luxembourg, self-employed professions and freelancers represent a particularly considerable number of players; without wishing to be exhaustive, we could list freelance craftspeople (6,900 SME identified by the Chambre des métiers [Chamber of Skilled Trades]), traders (more than 7,500 businesses), Horesca [hotel, restaurant and café] professionals (2,800 businesses), healthcare professions (doctors, physiotherapists, nurses, dentists, etc.), real estate and construction professionals (real estate agents, architects, consultant engineers, surveyors, etc.), legal professionals (lawyers, bailiffs, etc.), chartered accountants, auditors, etc.
As one of the leaders in group insurance and employee benefits in Luxembourg, Baloise Luxembourg is going to offer this very diverse population a number of different, ultra-customisable solutions which will best meet the needs and desires of these people. As regards the manner in which the premiums will be invested (investment funds or guaranteed returns, or a combination of the two), their manner and frequency of payment, and the possible pension solutions, Baloise will guide you in the choice of the appropriate vehicle to enable you to plan the best retirement possible.