Reports following the meeting suggested limited progress, with the key concern being the sustainability of the pension system. Projections indicate that in four years, the current income may no longer adequately cover annual expenditures, necessitating a re-evaluation of the existing model. In response, the government has proposed an inclusive consultation involving all stakeholders.
However, the opposition, notably the Luxembourg Socialist Labour Party (LSAP) and the Left Party (déi Lénk), expressed “alarm” over the current reform proposals. MP Marc Baum from the Left Party went as far as characterising the ideas as “social cuts.”
In Luxembourg, pension protection is broadly categorised into three pillars. The primary pillar involves contributions to the Joint Social Security Centre (CCSS), the second pertains to supplementary pensions offered by employers, and the third involves private supplementary insurance. Concerns raised by the opposition centre around the potential devaluation of the first pillar in the future.
The government is reportedly considering reducing the tax burden on the second and third pillars. “This means that the state even wants to spend money to incentivise people to take out private insurance in the future,” said Baum. He fears that such measures might only guarantee a minimal pension in the future.
MP Mars di Bartolomeo from the LSAP, vice-president of the committee, echoed similar sentiments. “The minister has ruled out increasing contributions at the moment. The only option, therefore, is to cut benefits or for people to work longer,” Di Bartolomeo explained, concluding that the government’s contemplation of reducing first-pillar benefits has “set off alarm bells” at the LSAP, especially because the plans are not explicitly spelled out but rather implied.
François Bausch from the Green Party (déi Gréng) voiced a sense of unease, stating, “The minister delicately suggested that the main pillar of the pension system might not cover everything in the future.” However, specifics regarding the general financing of the pension fund remained undisclosed. Bausch acknowledged attempting to offer constructive proposals, emphasising the evolving role of digitalisation and artificial intelligence in contrast to the diminishing influence of the labour factor on pensions. Bausch proposed a shift in thinking, urging the inclusion of highly productive companies with significant profits but minimal employment in contributing to the welfare state and pensions.
Max Hengel, the president of the committee from the Christian Social People’s Party (CSV), acknowledged the gravity of these issues but characterised the exchange as “open and constructive.” Hengel stressed that the objective should always prioritise avoiding weakening those with lower incomes. Dr Gérard Schockmel, Hengel’s colleague from the other majority party, also expressed a more positive perspective, deeming the proposals “relatively rational.” However, he stressed that, at this stage, they were merely “declarations of intent,” with further details requiring refinement.
Representatives of the Alternative Democratic Reform Party (adr) did not engage with our RTL colleagues after the committee meeting. The Pirate Party does not hold a seat on the Health and Social Security Committee.
