Working on the other side of the border is a professional opportunity… but also a headache when it comes to planning your retirement. Beyond the basic pension, each country has supplementary pension systems—sometimes mandatory, sometimes optional—that can make a real difference to your standard of living once retired.
Germany, Belgium, France, Luxembourg, Switzerland: different rules, varied tax advantages, and different payout methods. In this article, we simply explain how these supplementary pensions work, what you contribute, and how you will be paid when the time comes.
Germany
The Betriebsrente, or company pension in Germany, is a key element of the 2nd pillar for cross-border workers, but it remains optional and non-mandatory, unlike the basic pension from the Deutsche Rentenversicherung. It is set up by the employer through various mechanisms such as the Pensionskasse, Direktversicherung, or Pensionsfonds, often negotiated in sectoral collective agreements, and allows the rights acquired to be supplemented to maintain post-retirement living standards.
Contribution Mechanism
Contributions to the Betriebsrente are deducted directly from the employee’s gross salary, with tax exemption (if no cross-border status, otherwise no tax in Germany anyway) and social security contributions on the relevant portion, generally shared between employer and employee. During the contract term, payments accumulate through capitalization, without interruption except in exceptional cases such as disability.
Payout Options
At retirement, the Betriebsrente is primarily paid out as a lifelong annuity, taxable in France for French tax residents according to the bilateral convention, although partial lump-sum withdrawals (20–30%) are sometimes possible depending on the contract. Pensions are calculated based on points acquired (Entgeltpunkte) and paid monthly.
Belgium
Supplementary pensions in Belgium, or the 2nd pillar, function as additional savings set up by your employer or professional sector. It is not mandatory everywhere in Belgium, but it is often included in company or sector agreements, and cross-border workers there are generally included to boost their basic pension.
Each month, a small part of your salary (around 1.5% to 8%) is set aside for this savings. Mostly the employer pays (often 70% to 100%), and your portion is deducted directly from your pay slip. Two additional contributions apply: 3.55% for INAMI (health funding) and 0–2% solidarity tax (depending on the total amount). While you work, this money is invested. You can change employers without losing it: it is automatically transferred. Early withdrawal is impossible before retirement, except in cases of serious illness or death.
From age 65 or 66, you receive it as a lump sum or as lifelong monthly payments (the “annuity”). For the capital, Belgium withholds around 16.5% tax plus the small INAMI and solidarity contributions; if you live in France, you declare it there and receive a tax credit to avoid double taxation.
France
The 2nd pillar in France is Agirc-Arrco, a mandatory supplementary pension for all private-sector employees, including cross-border workers who validate quarters under European rules.
Each month, employer and employee together pay contributions (around 17% for low salaries, up to 37% for high salaries). This gives retirement points (for example, in 2025, 1 point costs around €20.19 to acquire). From age 62 (full rate at 67), you receive a lifelong monthly pension based on your points (service value around €1.44 in 2025). Lump-sum withdrawals are not possible except at death for beneficiaries. It is taxable in France at the progressive rate plus social contributions of 17.2%. If your spouse dies, you are entitled to 54% of their pension.
3rd Pillar: Personal Savings (PER)
This is voluntary, unless your employer imposes a mandatory PER (PERO). You contribute money (tax-deductible up to 10% of income, around €35,000 max), invested in insurance or funds to grow. During employment, you choose how to invest (stocks, bonds), but it is blocked until retirement.
At retirement, you can withdraw as a monthly annuity (mandatory for PERO) or in capital (e.g., max 20% per year). The annuity is taxed as regular income; the capital at 30% flat tax or progressive rate.
Luxembourg
The 2nd pillar in Luxembourg (employer supplementary pension) is optional but common (50% of employees) via collective contracts managed by insurers/funds. It complements the basic pension. Additional contributions represent 2–6% of salary, mostly paid by the employer. Contributions are tax-deductible and deducted from gross salary. During accumulation, capitalization grows with market returns. Transfers between employers are possible, but early withdrawals before retirement are rare (except for disability).
Retirement Options
At 65, you choose according to your contract: a lifelong monthly annuity (like continued salary) or a lump sum (or in installments up to age 75). Luxembourg levies a flat tax (around 10–20%, depending on the case), then in France (your residence), you declare it and receive a tax credit to avoid double payment. Upon death, the funds go to your designated beneficiaries.
3rd Pillar
Voluntary savings, like a special retirement account. You can contribute up to €1,920 per year if single (€3,840 for a couple), deductible from Luxembourg taxes. Funds grow freely (insurance or investment funds). From age 60, you can withdraw in full capital, monthly annuity, or a mix—tax-exempt in Luxembourg if contributions were prepaid, but taxable in France where you reside.
