Article 39 (Guaranteed entitlements)
Article 39 with guaranteed entitlements is a scheme that is financed in full by your employer by way of compulsory contributions. It enables you to receive an income supplement paid in the form of a life annuity which becomes available on your retirement.
It differs from the former Article 39, which was based on ‘arbitrary’ entitlements, as Article 39 entitlements are now fully vested even in the event of a change of company.
Key information
Finance supplementary retirement savings thanks to your employer
From the moment you join the scheme, you accumulate annual entitlements throughout your time spent working in the company (on certain conditions).
These entitlements correspond to the annual amount of the life annuity that you will be paid on your retirement.
Maintain your entitlements while already working out your future annuity
The amount of your annuity is determined based on your annual compensation, and you will maintain your entitlements regardless of your career path.
Release your retirement savings under various circumstances
There are specific cases allowing for early release during your working life so that you can receive your savings in the form of a lump sum in the event of unforeseen circumstances.
How does it work?
From the moment you join the scheme, you accumulate entitlements that are fully financed by your employer and fully vested to you; they may be revalued each year. These entitlements correspond to a percentage of your gross annual compensation that cannot exceed 3% per year (i.e. 3 points) and to the annual amount of the life annuity that you will be paid on your retirement. The cap applied throughout your career is 30 points, all companies combined. You may not accumulate any further entitlements once this cap has been reached.
Example: you receive gross annual compensation of €50,000 and the company grants you annuity entitlements corresponding to 2% of this compensation. In this case, each year you accumulate an annual annuity pledge of €1,000 (2% x €50,000) plus 2 points. At the end of the first year, your tally therefore decreases by one point to 28 points. At the end of the second year, the annual annuity pledge thus rises to €2,000 and your tally decreases to 26 points.
What happens to your savings if you change company?
If you leave the company before liquidating your pension entitlements, the entitlements accumulated remain fully vested to you.
What happens to your savings in the event of death?
Should you die before retirement, the beneficiary(ies) you will have designated beforehand will receive the retirement savings accumulated.
If so allowed under your scheme, your spouse (or ex-spouse(s)) may receive a reversionary annuity as protection on your death.
What is the tax regime applicable to this scheme?
Refer to our factsheet for all the tax-related information regarding Article 39 with guaranteed entitlements.