Foreigners working in Luxembourg say they have felt ignored and marginalised in the pension reform debate despite being crucials contributors to the system. <\/p>\n
After long-drawn-out negotiations with labour unions and employers, the Luxembourg government at the start of September announced changes to the pension system, including raising the effective retirement age by eight months over a five-year period and increasing social security contributions for workers from 24% to 25.5% of income, split equally between employee, employer and the state. <\/p>\n
\u201cPeople will be shocked when they realise their January pay check will actually be smaller,\u201d said a British banker, who asked not to be named for fear of negative repercussions in the workplace. \u201cThere\u2019s been no campaign to really explain this in plain language.\u201d<\/p>\n
The government only after the 1.5 percentage point increase was announced clarified that this included a 0.5 point increase for employees<\/a>.<\/p>\n The reform – less ambitious than what the government initially set out to do<\/a> – is due to give the pension fund an additional four years before it is depleted, ministers said, moving that deadline from 2045 to 2049 and kicking the problem down the road to be tackled again by one of the next administrations. <\/p>\n \u201cI did not know about the changes or that the pension fund will run dry in some years,\u201d the banker said. <\/p>\n The Schw\u00e4tz mat platform introduced by the government to take suggestions from the population on the pension reform was only available in German and French\u00a0\u00a9 Photo credit: Schw\u00e4tzmat.lu<\/p>\n \u201cI did not know about the changes or that the pension fund will run dry in some years,\u201d the banker said. <\/p>\n An online platform by the government to take suggestions from the general public on pension reform was launched in German and French only. Schw\u00e4tz mat<\/a> (which roughly translates to \u2018have your say\u2019) logged 9,000 unique visitors and collected 2,000 suggestions. But interviewees for this article weren\u2019t even aware of its existence and feel largely overlooked in the debate.<\/p>\n \u201cIt is very clear that the circumstances of expats are not being taken into account for the decision-making. Even when we are being asked to pay more into the system, we don\u2019t have a seat at the table to ensure that our rights and circumstances are also considered,\u201d said an Indian professional at a multinational company.<\/p>\n An expat from the US living and working in Luxembourg for six years said that even though foreign workers are a very important cog in the Luxembourg pensions wheel, they don\u2019t have a say in how the system works. <\/p>\n \u201cConsider this. Luxembourg\u2019s extremely generous pensions will collapse if expats were to somehow stop paying into the system,\u201d he said. \u201cYet expats don\u2019t have a voice. Is it in the interest of expats to increase contribution rates? Absolutely not. But no one has bothered to ask us and we are not organised enough to raise a voice.\u201d<\/p>\n The ministry of health and social security did not respond to a request for comment.<\/p>\n While worker interests were represented in the labour talks by trade unions LCGB and OGBL, more than two-thirds of foreign workers aren\u2019t unionised, according to Statec data<\/a>. White collar workers – including in Luxembourg\u2019s large and international financial centre – are also less likely to be union members. <\/p>\n Three quarters of Luxembourg\u2019s workforce are non-nationals, an April Statec report<\/a> said. Nearly half (47%) of the 490,000 people employed in Luxembourg are cross-border workers. <\/p>\n <\/p>\n Also read:Government silence is letting unions set pension agenda<\/p>\n <\/a>Amcham\u2019s open letter<\/p>\n In an open letter addressed to the prime minister, members of parliament and trade unions, Paul Schonenberg, chairman and CEO of the American Chamber of Commerce in Luxembourg, expressed the frustration of the international business and expat community over their exclusion from the pension debate.<\/p>\n Expats and other workers will be impacted by pension reform. The outcome will be fairer if their unique circumstances are considered<\/p>\n Paul Schonenberg<\/p>\n Chairman and CEO of the American Chamber of Commerce in Luxembourg<\/p>\n \u201cWe are saddened that the currently ongoing dialogue about pension reform does not include any focused understanding of the special and unique circumstances which impact our constituency and related, unintentionally marginalised groups outside of the mainstream Luxembourg citizen working population,\u201d Schonenberg wrote, stressing that his intervention was not a criticism but a plea for justice and fair treatment.<\/p>\n Noting that the Chamber of Deputies consists entirely of Luxembourg citizens, he acknowledged that they may not fully perceive the realities facing foreign workers. \u201cNonetheless, expats and other workers will be impacted by pension reform. The outcome will be fairer if their unique circumstances are considered,\u201d he said.<\/p>\n Foreigners – but also parents who took career breaks and accompanying spouses – are more likely to have irregular or limited participation in Luxembourg\u2019s social security scheme, Schonenberg continued. <\/p>\n In a open letter to the government, Paul Schonenberg, CEO of Amcham, said that expats are being overlooked in the pension reform process and urged their circumstances be taken into account\u00a0\u00a9 Photo credit: Gilles Kayser<\/p>\n Foreigners – but also parents who took career breaks and accompanying spouses – are more likely to have irregular or limited participation in Luxembourg\u2019s social security scheme, Schonenberg continued. <\/p>\n Six out of ten employees in Luxembourg have worked in more than one country, with only 40% of people receiving their pension after having spent their whole career in the country, the National Pension Insurance Fund\u2019s (CNAP) last annual report showed.<\/a> <\/p>\n Schonenberg proposed allowing those who have not achieved 40 years of contributions to voluntarily delay their pensions while continuing to contribute, thereby increasing old-age security without negatively affecting other beneficiaries.<\/p>\n \u201cThis simple adjustment, done on a purely voluntary basis, will allow those who have insufficient tier one pension benefits caused by limited working years to build for themselves a greater degree of old age security to live in dignity without negatively impacting the benefit entitlements of the rest of the Luxembourg population,\u201d the Amcham CEO said.<\/p>\n Under current rules, work contracts automatically expire upon an employee\u2019s 65th birthday, regardless of how long they have worked in Luxembourg. While these forced retirees can seek other jobs, people aged 45-64 make up the biggest group of jobseekers<\/a>, with job centre Adem not tracking unemployment past that age. <\/p>\n <\/p>\n Also read:Luxembourg faces more important issues than pensions reform, says Frieden<\/p>\n <\/a>Expats don\u2019t know how it works <\/p>\n