Latvian parliament supports higher pension indexation in the final reading

On Thursday, 10 March, Latvia’s Saeima approved amendments to the State Pension Law in the final reading. These amendments provide for higher pension indexation starting with 2017. In particular, the pension calculation method will take into consideration 50% of salary’s insurance fee index as opposed to the current 25%.

«Pension indexation reflects a country’s economic situation – the higher the inflation and wage growth, the larger the addition to annual income pensioners receive. The proposed amendments will provide higher pension indexation directly in relation to wage growth in the country. Amendments were developed in cooperation with Welfare Ministry and in consideration of budget funds that will be necessary to increase pension indexation,» – notes the chairperson of the committee Aija Barca.

The expected pension indexation increase with amendments will be 1.0508 in 2017 and 1.0413 in the next two years, as reported by Saeima press-service.

The planned pension indexation increase will require EUR 3.42 million in 2017, EUR 17.61 million in 2018 and EUR 33.79 million in 2019.

Barca notes that the next step towards pension indexation would be an assessment of options to provide larger support to people with considerable work experience. «It would be respectful towards people who have provided considerable contribution to the national economy through long years of work,» – said Barca.

Amendments to the law are also meant to prevent situations in which some workers of the interior system are provided with pension amounts that are lower than previously received retirement pension.

BNN 

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