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Ceturtdiena 22.03.2018 | Name days: Tamāra, Dziedra

Experts invite to consider future pension independently

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Experts concede that there is an actual possibility that, after recklessly changing the 2nd Tier of pension scheme, the only source of income for the future pensioners’ may prove to be contributions to the 3rd Tier of pension scheme or similar savings instruments.

Moreover, experts are also concerned that more attention is turned to the pension system and allowance policies, but not to the most fundamental issues – the tax administration and creation of a positive incentive to pay taxes, reports Dienas Bizness.

If in the upcoming years the 2nd Tier of pension scheme is «messed-with», then in the future, there is a risk to receive lower pensions than it is due or not to receive them at all.

Therefore, the experts encourage each one to consider additional savings in different instruments, including 3rd Tier of pension scheme, or acquiring savings life assurance with tax credits for contributions. At the same time, experts warn that the fewer years remain to the retirement age, the greater the amount of contributions have to be made to the pension fund, in order to compensate for the pre-retirement level of income.

«The basics of investing provide that the investment period is of key importance – the longer one saves up, the smaller amount of contributions they have to make to accumulate the desired sum. If until the retirement age there are, for instance 40 years left, then, on average, 6% from current income is a sufficient amount to ensure the same income level after retiring. Whereas, if 30 years remain, it is necessary to save up 10% of the income on average,» pointed out the Chairperson of SEB Open-ended Pension Fund Board, Dace Brencena (Dace Brencēna).

Liga Krapane (Līga Krapāne), the Press Secretary of the Prime Minister Valdis Dombrovskis, who had previously suggested a possibility to temporally revoke contributions to the 2nd Tier of pension scheme, announced that when the reduction of funded pension scheme contribution rate from 8 to 2% was done in 2009, it was awaited that the special budget revenue of social insurance would increase by 106 3 million lats. However, the actual budget execution turned out to be by 56% better – 166 million lats.

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  1. The Old1 says:

    They better leave our pensions alone.

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