Do you think with the current trend ,can Lux sustain its quality over the next decades ?

https://today.rtl.lu/news/luxembourg/45-189-people-retired-over-the-last-five-years-1938681625

From 2028 – 2029 ( Statec forecast ) pensions reserves will be in deficit . Meaning the gov will collect less pension contributions compared to what it actually pays .

Should the government start thinking the pensions paid to the public servants for now ?

I refer to the public sector as it is the easiest way to cut the pensions as the turnover is extremely low.
What is your view on?

by Fast_Gap7215

4 comments

  2. The pensions of government workers are already practically the same as in the private sector. The formula is slightly different but for most government employees, when they reach pension they will receive a very similar amount compared to private workers. The reason current government pensions are higher is because they fall under the old arrangement. The problem is that it is very difficult to cut these because historically these workers were hired with the promise that in return for lower salaries (yes, back then government salaries were in fact lower compared to the private sector) they will receive more pension.

  3. There are approximately 33,000 civil servants, and estimates indicate that over 90% of public administration positions are held by citizens, all of whom are registered voters. The government would let everything else collapse before touching civil servants’ pensions. Moreover, those in power would be directly affected, making such a measure even less likely.

    Before pension reserves become deficient, the government has many other levers to pull: raising the retirement age, reducing pension amounts for the private sector, increasing taxes…

  4. For clarity, we shouldn’t mix private with public pension as those are separate schemes.

    2028 – 2029 is the start of the deficit for the private system alone. With the new reform the deficit will start in 2032. The system has reserves for a few years worth of payouts so the situation is not very bad. But the demographics will eventually kill it, so a real reform is expected in a few years.

    Public pensions are out of that equation and are in deficit for a long time already. There are also no reserves, deficits are currently covered by the state budget. Cutting public pensions is a popular idea but if we want to look at things in perspective, we talk about ~18k pensioners today. Even if we eliminate them, it won’t solve the main issue with the private system that has ~225k pensioners today and will have more pensioners than contributors as of ~2065 if nothing else is done.

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