Martine Deprez, the health and social security minister (CSV), has outlined the agenda for highly anticipated negotiations on the consolidation of Luxembourg’s pensions system. Photo: Matic Zorman/Maison Moderne

Martine Deprez, the health and social security minister (CSV), has outlined the agenda for highly anticipated negotiations on the consolidation of Luxembourg’s pensions system. Photo: Matic Zorman/Maison Moderne

While the trade unions and employers stuck to their guns, the minister for social security took advantage of a public meeting on Wednesday to set out the government’s timetable.

Carlos Pereira, an executive board member of the OGBL, one of Luxembourg’s largest labour unions, said during a public session that behind the figures there are people. And it is true that pension systems are one of the pillars of social security and represent one of the essential social gains for the entire population. This explains the passionate and trenchant positions taken.

Putting people back at the centre of the debate is what the minister for social security,  (CSV), seems to have in mind. To move the debate beyond tripartite negotiations between unions, employers and the governments. Much attacked by the LCGB, another major union, for having spoken to the press about her vision of the future of the system, she rebounded by saying that the subject of pensions is a societal issue and that by speaking to the press, she had launched the debate. “Without having to or favouring any particular course of action,” she said on 7 February 2024. Deprez reckoned that everything can be discussed.

Involving the public in the debate

And everything could be discussed with the broad involvement of the public. “The subject is a societal one, and the question is what societies can expect from their pension system. I’m opening the debate: doesn’t society have the right to debate this?” Deprez pointed out in passing that, according to the OECD, “in Luxembourg, the overall income of retired people is higher than their income during their working life”.

Opening up the debate in this way is a good idea. But there is a risk that it could spill over into other areas, such as the needs of pensioners or the differences between private and public sector retirees. That issue emerged as central during the question-and-answer session with the audience. It is potentially explosive.

The minister did not give any further details about the form that this possible citizen participation might take.

Negotiations to begin in autumn

She did, however, specify the timetable. At the request of the Economic and Social Council (CES), the General Inspectorate of Social Security (IGSS) will deliver a report--yet another one, noted the OGBL and LCGB--on the state of the system in June.

Discussions with the government will be launched in early autumn. Who will be involved? It remains a mystery. On the substance, the minister refered to the coalition agreement “which does not talk about the pensions cliff, but about the need to consolidate the existing system”.

Discussions will last three years, until 2027. The year 2027 is a cut-off date because, in theory, expenditure will exceed revenue and, following the letter of the 2012 reform, the government will be obliged to legislate to reduce pensions. “Is this really what we want?” she asked.

Originally published in French by and translated for Delano

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