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Tuesday 19.09.2017 | Name days: Verners, Muntis
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State Audit: early retirement pension does not fit Latvia’s pension policy

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThrough an audit at Welfare Ministry about the longevity of Latvia’s pension system, State Audit analysed the pension filed. The service concluded that Latvia’s current pension system does not comply with the policy’s nature.

The range of people receiving early retirement pensions has increased over the course of the years. However, there has not been an assessment of professions included in the early retirement pension system, the State Audit reports.

Early retirement pensions can be received by soldiers, fire fighters, police officers, diplomats, representatives of creative professions and officials from different institutions. The range of recipients continues to expand, which requires more and more funding.

Payment of early retirement pensions required EUR 45 million in 2011. By 2021, the size of required funding will have reached EUR 75 million, as mentioned in State Audit’s report.

Early retirement pensions allow pensioners to start receiving pension amount that is not tied to their pension capital before reaching pension age. Early retirement pension size is on average 1.51 times larger than actual retirement pension. For example, average early retirement pension of diplomats is EUR 1,552, whereas their standard retirement pension is EUR 592.

‘Although the main goal of early retirement pensions is associated with a person’s inability to continue working, SA’s performed data analysis shows that seven out of ten early retirement pension recipients continue working. In addition, the majority work in institutions and professions they left for early retirement,’ SA representative explains.

Continuing, she says: ‘Allocating early retirement pensions, equal treatment is not provided in relation to other working people and early retirement pension recipients. Because the system was formed historically or with political support there are now different early retirement pension provision criteria and calculation order.’

For example, certain military officers can leave on early retirement at the age of 33, because there is no minimal pension age. Workers of the Emergency Medical Service and diplomats have a minimal pension age of 55, SA explains.

SA believes progression of new legislative drafts that expand the range of early retirement pension recipients without first performing a comprehensive evaluation of the system is unacceptable.

To resolve the problems noted in the audit, SA recommends decisive political changes. SA intends to inform the State President, Saeima and Prime Minister of the conclusions made in the audit.

Ref: 225.109.109.5206


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