Left Party advocates for targeted measures instead of structural reform

While the Luxembourg government remains silent on its plans for pension reform, the Left Party (Déi Lénk) presented its own proposals to the press on Thursday. The opposition party argues that no structural reform is currently necessary and instead advocates for targeted measures to strengthen the pension system.

Left Party representatives criticised the government's approach, with MP Marc Baum outlining three key income-related measures.

The first proposal involves lifting the cap on social contributions for high earners, ensuring that income above five times the minimum wage does not generate additional pension entitlements. According to the party, this change alone could generate approximately €700 million in additional revenue.

The second measure calls for introducing social contributions on overtime, which is currently exempt. Co-party speaker Carole Thoma emphasised that this would not only increase funding for the pension system but also boost future pension entitlements for workers.

Third, the Left Party proposes that pensioners over the age of 65 who continue to work should still pay social contributions. This measure is estimated to bring in an additional €28 million.

Combined, these three proposals would generate €814 million in additional income for the pension fund, according to the party. On the expenditure side, the Left Party suggests saving over €200 million by transferring non-pension-related expenses from the fund to the state budget.

Additionally, the party advocates for aligning the minimum pension with the minimum wage, a move it believes all political parties should support. Thoma highlighted that Luxembourg's current minimum pension falls below the poverty line.

The General Inspectorate of Social Security (IGSS) is set to conduct a sustainability assessment of the Left Party's proposals at the end of March, evaluating the feasibility of the opposition party's suggestions.