Pension reform in Luxembourg. The parties are alarmed

Newly appointed Health and Welfare Minister Martine Deprez has sounded a disturbing note. At the current level of spending, the pension system will not be able to function in 4 years. The government intends to put the problem on the table for public discussion.

The minister's desire to reform the system is understandable and justified, but unrest has begun among the opposition parties. Many previous government MPs and members see this as a threat to the established order.

The pension system in Luxembourg is currently made up of three components: contributions from working people, additional contributions from companies, and private insurance. The latter two are unlikely to generate more income for the pension fund. Consequently, efficiency will be achieved by prolonging the investment in the first sector.

This can be achieved in two ways — by increasing contributions from each salary or by raising the retirement age. Of course, it is the second option that is feared. The experience of France, which was forced to reform the system but failed to prevent riots, is still fresh in the memory.

It is too early to say whether Luxembourg will raise the retirement age. But the government has involved several commissions in the discussion. Perhaps during these four years it will be possible to find a worthy alternative.