The social security contributions regime for supplementary pension schemes has been radically overhauled over the past two years. As a result, the social security contributions payable in respect of supplementary pension schemes has increased dramatically. At the employer’s choice, these contributions are based either on the amount of the pension accrued or on the contributions made into the pension scheme on the employee’s behalf. These contributions are then allocated to an “old-age solidarity fund”.

Employers’ social security contributions on supplementary pension schemes doubled from 2009 to 2010 and the rates now range from 12% to 24% depending on the contribution basis chosen by the employer. Since January 2010, an additional contribution of 30% (on the chosen basis) is payable by the employer for employees whose total retirement pension (both mandatory and supplementary) exceeds eight times the social security annual ceiling (i.e. exceeds EUR 290,976).

Since January 2011, the beneficiary of the pension scheme also has to pay social security contributions based on the amount of the pension that he/she receives and a new range of contribution rates was introduced in January 2012.

Supplementary pension schemes have therefore become more of a financial burden for companies, and companies are increasingly reluctant to provide such schemes for their employees.