Wat mengs du? - Including the youth in pension reform, not just talking about them

By Gianni Di Paoli Switch to German for original article

Listen to this article

00:00
00:00

The planned pension reform primarily affects those who are still a long way from retirement - in other words, the younger generation. But to what extent will they actually be involved in shaping this upheaval? Gianni Di Paoli, President of ACEL, calls for pension reform to be shaped with young people, not without their say.

When the government announced at the end of 2023 that it wanted to analyse and possibly reform the pension system, many people, especially the younger generation, had probably given the issue little thought at the time. This already reveals a structural problem: we finish school, perhaps go to university, enter the world of work and pay social security contributions without really knowing what for. Like many others, we at ACEL first had to understand the pension system and the context: Where do we stand? Where do we want to go? How can young people be part of the process?

Wat mengs du?

However, there is no one young generation. Their perspectives vary depending on their age, realities of life and educational background. But they are united by the realisation that the system needs to be reformed, because the starting position is clear. The forecasts of the General Inspectorate of Social Security (IGSS) paint a gloomy picture that the pension system will be in deficit as early as next year.

The younger generation is by no means naive and is fully aware of its responsibilities. They know that a reform will entail cuts, that working longer, higher contributions or possibly lower pension entitlements are on the table. But the goal must be a compromise in the spirit of intergenerational fairness. After all, those who pay in today and finance current pensions have the same expectations of their own pension. However, this means that everyone must make their contribution so that the system can stand on a stable financial footing in the long term, not just young people.

Gianni Di Paoli

Opinions differ on what a sustainable pension system should look like, as confirmed by an ACEL survey. There is agreement that it should remain a socially fair and secure system. Some call for new financing options, others are concerned with the question of whether they should have to work longer or would like to be able to organise retirement more flexibly. The majority are opposed to working longer, but are realistic enough to recognise that this needs to be discussed. As far as other sources of funding are concerned, it is important that the burden is borne by everyone and not unilaterally placed on young people or the state. Money from the state budget that flows into the pension system is lacking elsewhere. In the long term, the consequences usually affect future generations.

Consultation or predetermined course

The government promised a broad consultation with citizens, experts and representatives of the social sector in order to develop a reform with the greatest possible consensus. As ACEL, we endeavoured early on to involve the younger generation in the process and contribute their opinions. We were invited to talks, were able to present our positions and were listened to.

"Negotiations with trade unions and company representatives are to take place on July 9th. Is this the moment when decisions are made without involving young people?"

For a long time, it remained unclear what the government's position was, under the pretence that they wanted to listen first. When the Prime Minister suddenly set out a "direction of travel" in his State of the Union address, we were surprised. At the beginning of May, something was therefore already decided in the Government Council, two months before the final report of the consultation phase is available.

We welcome the fact that the years of study will be retained and made more flexible, a key element for the attractiveness of Luxembourg as a business location, against the shortage of skilled labour and for the recognition of studies, regardless of the stage of life. At the same time, the reform is essentially based on two points, the partial compensation of the deficit through funds from the state budget and the gradual increase in the number of years of insurance. In this regard, the Prime Minister spoke of three additional months per year from 2030, a figure which, like other positions, was relativised again shortly afterwards by the government and the relevant parliamentary groups. There is clearly still a need for clarification here.

Those who are already retired or nearing retirement will hardly be affected. As a result, it is the younger generation that would bear the brunt of the burden – something the government has said it wants to avoid. It doesn't matter how long a reform is spread out over, young people will feel the full impact of it, which is why it would only make sense for it to take effect as soon as possible.

Why the reform is not convincing

In mid-June, we sought dialogue with the minister and outlined our concerns. The government wants to secure the system for the next 15 years. Many people already have over 40 years of contributions by the time they retire, so raising the required period would hardly lead to people working longer in real terms – at least in the short term. So how can an increasingly deficit-ridden system be saved with a measure that may not show its first effects for another 10 years? Money from the state budget alone is unlikely to be able to close this rapidly increasing gap in the system's financing, which would cause the reserves to dwindle.

We therefore call on the government to thoroughly rethink its reform plans. The young generation needs a perspective that they can rely on, that is sustainable in the long term and that they do not feel has been ignored. Negotiations with trade unions and company representatives are due to take place on July 9th. Is this the moment when decisions are made without involving young people?

We have been heard, we are not questioning that. But there is a difference between "being heard" and "being taken into account". It's not enough to talk about young people, you have to work out reforms with them, not for them. That's what makes the difference.

Sign up for our newsletter and don't miss a thing.

To complete the subscription process, please click the link in the email we just sent you. Check your spam or junk folder too, in case of doubt. It may take us a few minutes to update your Journal profile, so please be patient.

An error occurred while subscribing to our newsletter. Please contact us at abo@journal.lu.

Next

A plea for the recognition of sex work