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Ceturtdiena 19.07.2018 | Name days: Jautrīte, Kamila, Digna

70% evaluate 2nd Tier pension contribution revocation negatively

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The weekly Internet poll indicates that 70% of inhabitants of Latvia do not approve the voiced suggestion to cancel contributions to the 2nd Tier of pension scheme, which comprise 2% of social insurance installments, in order to consolidate the state budget.

Only 9% of surveyed are ready to support this proposal, while 21% admitted that they have not heard that the government has discussed it, the agency Snapshots informed the news portal BNN.LV.

The majority of respondents or 24% believe that such changes in the 2nd Tier of pension scheme (2TPS) will undermine the confidence in the pension system as a whole. While almost every fifth respondent or 19% of the surveyed participants acknowledge that it will encourage them to consider the possibility of paying taxes in other countries, where they can receive what has been promised. 18% of the correspondents mentioned personal loss as the main consequence of the possible revocation of 2TPS contributions, namely, their future pension would reduce.

It should be noted that the idea to cancel contributions to 2TPS is mostly disapproved by the elderly people (50-74 years) and adolescents (15-19 years) — correspondingly 82% and 72%. It is most likely that younger people are better aware that such government decision would reduce their future pensions, while the elderly, who have already retired or will retire soon, are more worried about their pension amount.

The idea to pay taxes in another country is mainly supported by inhabitants aged 30-39 years. In case the decision is approved by the government, the motivation to pay taxes will reduce the most in Riga (19%), as compared to other cities (17%) or to rural areas (5%).

Respondents that indicated Latvian as their native language — would consider the idea of paying taxes in other countries more, as compared with the Russian speaking inhabitants (respectively 25% and 12%). Moreover, the idea to leave the country is more pronounced among the Latvian speaking population (12% compared to 5% of Russian speaking).

The Doctor of Economic Sciences and expert on pension questions, Edgars Volskis (Edgars Voļskis), is of the opinion that «the overall proportion of shadow economy will continue to grow during the next five years; and the working population will continue to emigrate to other countries during the following ten years. Thus, a very serious threat to the stability of Latvia’s social insurance system will be caused.»


Leave a reply

  1. B4re says:

    In my opinion, the changes will not lead to anything good.

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