CMS Expert Guide to Pensions in Monaco

Monaco has a mandatory two-pillar system: 

The first pillar – the basic pension: This is the basic retirement pension administered by the Caisse Autonome de Retraite (CAR). It awards a number of points (maximum of four per month) based on the employee's gross salary, up to a threshold on a single tranche. 

The second pillar – the supplementary pension: This is a supplementary pension allowing the employee to receive an additional payment administered by the Caisse Monégasque de Retraite Complémentaire (CMRC) since 1 January 2024*. The allocation of points (more numerous) is also based on the employee's gross salary, up to a threshold higher than that set for the basic retirement pension, and in two tranches.
*Before that date, this supplementary pension scheme was French (AGIRC-ARRCO). 

The employee's total annual pension, if they have contributed for the required number of years (a minimum of 60 months over 10 years), will be calculated as the total number of points acquired multiplied by the price per point. 

In addition to this system, non-compulsory supplementary pension schemes may also be set up by the employer.

A voluntary private pension scheme can be established at company level. This type of pension may provide benefits on a collective basis (for all workers) or for specific categories of worker.

Private pension provision is not mandatory. All employees must be enrolled in the basic (CAR) and supplementary (CMRC) pension schemes mentioned above. 

There is no general requirement to provide a private pension scheme under the applicable insurance regulations.

The statutory schemes (CAR and CMRC) are administered by an official organisation of the Principality of Monaco. Voluntary schemes must be managed by an insurance company authorised to do so by the French and Monegasque authorities.

No. The required level of contributions is determined by each private pension plan.

Yes. Insurance companies must always hold sufficient assets to meet their obligations.

7. What age are benefits taken?

Benefits from the mandatory basic and supplementary pension schemes can normally be taken at age 65. The mandatory pension (basic and supplementary) is only payable to the employee if: 

• the activity was carried out, whether continuously or not, over a minimum period of ten years; and
• these periods of activity include a minimum total duration of actual or equivalent work of sixty months. 

Early pension is possible: at age 60 if retired from all active work or employment, or at age 55 for a woman who has raised three children for at least eight years before the children reach age 16.

For voluntary schemes, eligibility and benefit rules depend on the insurance contracts put in place.

Private defined contribution schemes may be financed by the employer alone, or jointly by the employer and the employee, depending on the internal documentation establishing the scheme within the company.

There are generally no registration requirements.

Only social contributions are paid by the employer on contributions made on behalf of the employee to a private pension; these are considered a benefit in kind.

Not under Monaco law.

12. Are benefits taxed?

Tax treatment depends on the nationality and place of residence of the employee. Benefits received from mandatory and/or voluntary private pension schemes by a Monegasque national and resident, by a foreigner (excluding French and American nationals) resident in Monaco, or by a French national under the Franco-Monegasque tax agreement are tax-exempt. 

All French residents are taxed on the benefits.

No

No, not in relation to a voluntary private pension scheme.

Insurance companies wishing to operate in Monaco must obtain authorisation from the French administrative authority known as the “ACP” (Autorité de Contrôle Française), which ensures they are able to meet their commitments.

Subsequently, insurance companies must also obtain authorisation from the Monegasque authorities and be registered with the business entities registry.

The ACP receives information from insurance companies, as it authorises them to carry out their activities and monitors their solvency.

There is no requirement for a voluntary private pension scheme to guarantee either its capital or the interests of members, but the risk of failure or insolvency may be insured by specific insurance.

The Monegasque Constitution and extensive case law prohibit discrimination on grounds of race or ethnic origin, gender, religion or belief, disability, age, sexual orientation, etc., for the purpose of granting any benefits, including pensions.

Benefits from both the basic and mandatory supplementary pension schemes can be taken before the legal retirement age (see above “What age are benefits taken”) in limited cases (e.g. short careers or disability). 

Regarding voluntary pensions, benefits cannot be paid before the employee retires, unless otherwise agreed.

No.

No.

Insurance companies operating retirement plans established in France or other European Economic Area (EEA) states may operate such plans in Monaco, subject to proper authorisation.

If a pension scheme has been introduced unilaterally by the employer, it may be terminated by notifying the employees as well as staff representatives, while observing a period of notice.

If the voluntary pension plan is included in the employment contract, the employee’s consent would be required to modify it.