Indexation leads to 2.5% increase in pay and benefits
From 1 August 1999, all wages, pensions and benefits in Luxembourg rose by 2.5% under the Grand-Duchy's automatic statutory indexation scheme.
Luxembourg has an automatic indexation system whereby all wages, pensions and benefits are automatically adjusted one month after the average of the cost-of-living index over the previous six months goes up by 2.5%.
According to the Central Statistical and Economic Research Service (Service Central de la Statistique et des Études Économiques, Statec), the six-monthly average of consumer prices exceeded the 2.5% figure on 1 July 1999, and all salaries therefore went up by 2.5% from 1 August 1999.
This decision was confirmed on 5 August 1999 by the Index Commission (Commission de l'indice). This is a tripartite body that covers all sectors of the Luxembourg economy, and meets every three months, as laid down in a Grand-Ducal Regulation of 31 December 1998 that charges the Commission with advising and assisting Statec in connection with the consumer prices index.
In the statement of the new government's programme issued on 12 August 1999 (LU9909111N), the Prime Minister said that he aims to maintain the indexation system, even for pensions. In this way, he opposed an OECD recommendation that Luxembourg should get rid of its automatic indexation system.