The Ministry of Social Security today announced that due to measures to clean up the state budget, the Luxembourg Government decided not to proceed with a pension adjustment mechanism which came into force on 1 January 2013, indicating 2016 could mean a 0.5% increase in Luxembourg pensions.
The law of 21 December 2012 sought to reform pension insurance through a new pension adjusment mechanism. However the decision announced today will see the government dispensing with the adjustment of pensions in 2013.
In order to stabilise pensioners' incomes throughout the period of 2014-2015 and to compensate for effects relating to changes in wages during this period, the budget law of 20 December 2013 had fixed the readjustment moderator at 0 for the years 2012 and 2013. The consequences of wage trends for the years 2014 and 2015 was therefore neutralised and pensions have not been adjusted.
From 2016, pensions adjustment will be as provided for in the law of 21 December 2012. Calculations from the General Inspectorate of Social Security suggests that the adjustment factor for 2015 relates to 1,005 which translates to a 0.5% increase in pensions from 1 January 2016.
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