Pension reform in Luxembourg: MPs discuss the future of the system amid deficits and controversy

On Wednesday, the Luxembourg Chamber of Deputies will hold a key debate on pension reform - amid increasingly worrying forecasts and a lack of consensus among the social partners. The question of how to keep the system sustainable without raising the retirement age or cutting benefits is dividing politicians, employers and trade unions.

The debate is being organised by the Minister of Health and Social Protection, Martine Deprez (CSV), and aims to set out guidelines for future solutions.

Three weeks ago, the Inspectorate General of Social Security (IGSS) presented an updated forecast: from 2026 onwards, contribution receipts will fall below current expenditure, and by 2039 pension reserves will fall below the minimum threshold (1.5 years of expenditure), being fully depleted by 2045. These calculations have already raised concerns about the system's ability to index pensions to wage growth.

Employers insist on cutting costs, which, according to their logic, will also entail a reduction in benefits. Trade unions argue that there is no urgent need for reform, and if necessary, they suggest considering measures to increase incomes and even raise pensions.

Among the political parties, only the Left (Déi Lénk) has so far openly expressed its opinion. However, the youth organisations of the main parties have previously published a joint position: they are in favour of keeping the retirement age at 65, continuing to recognise studies as an insurance record, harmonising the pensions of civil servants and private employees, and indexing the average pension to the reference budget of an elderly person.

Thus, not only economic but also deep socio-political tensions accompany the reform - and this will be one of the main topics in the country in the coming months.