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Minister: OECD views Latvia’s pension system as stable and sustainable

Janis Reirs/flickr.com.
Organisation for Economic Co-operation and Development (OECD) has concluded that Latvia’s pension system is successfully introduced and its financial stability and sustainability will remain in the future, as reported by Welfare Ministry.

OECD performed the assessment of Latvia’s pension system throughout April 2017 until January 2018. The goal of the study was to analyse Latvia’s pension system with a focus on its sustainability. OECD has also prepared multiple recommendations on improving the system, as confirmed by the ministry.

Welfare Ministry notes that although 1st level pension system is well-managed in spite of the difficulties experienced during the transition period, it should be said that poverty risk for old people – especially women and individuals older than 75 – is high. To reduce the risk of poverty, OECD recommends increasing minimal pensions and state social insurance benefits.

«The evaluation of Latvia’s pension system that we have received from OECD is good. Information from the survey is very important for the future development. We are well-aware of the large proportion of small pensions. It is our goal to change this situation,» said Welfare Minister Jānis Reirs.

Authors of the study also recommend gradually increasing the social insurance fee rate for employees of micro-enterprises and liquidating exceptions for self-employed people. Latvia is also asked to drop special pension scheme and integrate retirement pensions in the general system, considering that nearly 40% of recipients of such pensions are younger than 50 years and combine pensions with work, Welfare Ministry.

Other recommendations have been proposed for Latvia’s pension system. They will be carefully analysed to find solutions.


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