The general insurance record for retirement pensions provided in 2015 was 36 years and 4 months (37 years and nearly 4 months for women and 35 years and nearly 1 month from men). Of this insurance record, and average of 21 years and 7 months were spent working by residents before 1996 and 14 years and 8 months after 1996, according to information from Welfare Ministry.
Before 1996, insurance record mainly consists of work period (including work in kolkhoz/sovkhoz), work-related periods (service, training, etc.). After 1996 – months in which residents had carried out social insurance payments for pension insurance – 14% (from 2016) or 20% of individual wage (depending on the person’s participation in 2nd level pension programme), as well as state payments for periods of economic inactivity (child care period, unemployment, etc.).
By 2015, 1.25 million residents had applied for 2nd pension level (38% – voluntarily and 62% – under mandatory conditions). The average age of residents was 40 years and nearly 5 months (39 years and 8 months for women and 41 years for men).
At the same time, the number of pensioners with capital gathered on 2nd pension level has been gradually growing since 2013. In 2015, there were 11,000 people. 90% of Latvia’s residents choose to enhance their 2nd pension level capital with 1st level pension capital to receive one pension amount in the end. Nevertheless, the number of pensioners who choose to buy a life pension policy using their saved capital keeps increasing every year.
By buying a life pension policy, the chosen life insurance association, in accordance with the client’s wishes, can pay pension capital every month, quarter or year. It is possible to select multiple (a maximum of three) pension payment periods, during which pension amounts differ (the first life pension payment period is at least five years, paying no more than half). The pension repayment moment can be put off to up to ten years.
«Although people most often choose to add their 2nd level pension capital to the 1st level, it is clear that the importance of life pension continues to grow. It is good that the country now has a system that allows residents to choose between adding their capital to the 1st level or getting a life pension policy,» – admits Welfare Minister Janis Reirs.
By 2015, 255,000 pension plan participants had applied for 3rd level pension plan (56% of women and 44% men). Capital saved on this level can be received starting from 55 years. There are exceptions that allow pensions to be paid at a younger age. This pension capital can also be inherited.