Analytics, Financial Services, Legislation, Lithuania, Pensioners

“When we starting thinking about various social benefits, we saw that our pension system and the pensions themselves are the smallest in the region. That lag, that our pensions are smaller than in Latvia, Estonia or Poland, is actually getting both painful and shameful. Hence the indexation of pensions, which has been submitted to the Seimas, which matches the financial capacities of the state, shall be considered and decisions shall be made,” she said at a news conference after a working lunch with Cabinet members on Monday.

This year, the government should focus on increasing the employment, which would ensure economic growth, financial stability and the reduction of social exclusion, Grybauskaite said.

Last September, she said that discussions of the new social model had left open the questions of whether the state would have sufficient financial resources for pension indexation, whether there would be any new incentives for making retirement savings or for participation in the social insurance system altogether. She pointed out shortly thereafter that pension indexation was important.

The Seimas [parliament] is deliberating on a model, worked out by the government, which liberalizes labor relations and reorganizes the pension system of the social insurance fund (Sodra) and, among other things, provides for automatic indexation of pensions.

Late in 2015, the government decided to increase the average old-age pension by 8.21 euros, to 265 euros, on January 1.