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Saeima establishes indexation increase for pensioners with high seniority

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUOn Thursday, 22 June, Latvia’s Saeima approved Social and Employment Matters Committee’s prepared amendments to the Pension Law in two readings, ensuring greater pension indexation for multiple pensioner groups next year.

In accordance with amendments it is planned to provide greater indexation for pensioners with high seniority, as well as larger bonuses to pensioners who retired before the introduction of the social insurance system in 1996, BNN was informed by Saeima press-service.

«Amendments to the law will help older people with high seniority and who acquired most of their work experience in the years when each individual’s contribution to future pension was not taken into account. Changes to the law were prepared by the committee’s work group in close cooperation with ministries and pensioner organizations,» says chairperson of Saeima’s Social and Employment Matters Committee Aija Barca.

To improve the situation for pensioners with high seniority, it is planned to apply a higher growth coefficient to certain pensioner groups next year.

Law amendments provide persons with 40 years of seniority apply 70% of social fees from wage growth in the country instead of 50%. For pensioners with 30 to 39 years of seniority, the increase is planned to reach 60%. The same increase is planned for seniors who worked in hazardous or dangerous work conditions regardless of their total seniority.

Pensions will be recalculated this year in accordance with inflation growth, as well as 50% from insurance fees in actual wage growth.

The legislative draft also provides an increase of bonuses to pensions of people who retired before 31 December 1995. The bonus for this pensioners group is planned to be increased from 1 to 1.5 euros for every year. Changes to the pension indexation order will require an additional amount of EUR 3.2 million from the social insurance budget in 2018. Increase of bonuses would require EUR 13.9 million from the state budget.

As noted by Barca, changes to the law were submitted to the Saeima for an immediate review, so that the State Social Insurance Agency has a legal reason to perform the necessary changes to its information systems, which usually takes about six months.

Ref: 224.109.109.6109


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