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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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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