OGBL and LCGB call for referendum on pension reform

The Independent Trade Union Confederation (OGBL) and the Luxembourg Confederation of Christian Trade Unions (LCGB) on Monday gave a joint press conference to voice a number of demands regarding the much-debated pension reform. Both unions want to be actively included in discussions and remain steadfast in their stance that there should be absolutely no deterioration in pensions. To this end, they suggested several foundational changes, and further provided potential financial methods for the increased expenses.

Discussions 'lack balance'

The unions demand that the tripartite system be used, meaning that government, employers, and unions convene to negotiate the reforms in joint sessions. However, this is not foreseen in the plan laid out by Health and Social Security Minister Martine Deprez on Friday.

The unions argue that since the public is being involved, there eventually has to be a referendum on the reform. And according to the OGBL and LCGB, this means including all of the insured in the debate, even cross-border workers.

Although the trade unions were invited to discussions with the Minister during the consultation process, they expressed concern at a potential lack of balanced views. The employers' think tank, Idea, was invited to meetings, but its employees' counterpart, Improov, was not. In addition, three farming associations received invites, but the Ministry failed to invite any women's organisations or pensioners' representatives, stoking the ire of the unions.

The unions also pointed out that many reforms made in general should apply to the private sector and the civil service to avoid increasing social disparities.

The OGBL and LCGB call for a referendum on the pension reform. / © RTL

Union demands

Unions refuse the idea of making pension readjustments based on general salary trends a permanent measure. The most recent reform, carried out in 2012, stipulates that this readjustment depends on the financial situation of the pension fund, which is why the unions argue that pensions cannot be changed if the fund resorts to its reserves.

The OGBL and LCGB further demand improvements to the minimum pension rate, with disparities said to notably affect women, as well as improvements for students.

As for the need for action to improve the financial stability of the system, unions see no short-term need due to what they consider sufficient reserves. Nevertheless, they acknowledge that there have to be long-term solutions to increase the fund's revenue, floating the idea of a new type of tax, among others.

Background

As things stand, Luxembourg's pension fund has a surplus. But all forecasts predict a system deficit in 2027 until its immense reserves are eventually exhausted by the 2040s. Although Luxembourg currently has more than €27 billion, or just over four years' worth of pension payments, Minister Deprez cautions that the system is fragile.

Potential solutions to the problem include an extension of work years, higher contributions, curbing early retirement, or even reducing pensions. However, at this stage, nothing has been decided by the government.

Luxembourg has already been able to observe the effects of highly unpopular pension reforms in neighbouring countries, with outrage and protests particularly high in France. The ministry is therefore trying to anticipate backlash by setting up a platform to allow workers, who are the first to be affected, to make their voices heard.

A questionnaire will supplement the opinions collected by the platform in 2025. "At the end of the consultation, the results of all the discussions – with stakeholders and the public – will be analysed by three expert groups who will be appointed on the basis of the specific subjects defined at the end of the consultation phase", explained the Ministry.

A final report is due to be presented in spring next year.

Health Minister Martine Deprez addressing the pension reform at a recent press conference. / © Tom Zeimet