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2012.11.15 10:35

Outgoing Seimas legislates for one last time seeking to revamp the pension system

Jorge Marcano | The Lithuania Tribune2012.11.15 10:35

The final activities of the outgoing Seimas constituted on passing amendments to the Law on Pension System Reform, required to launch an overhaul of the pension system in 2013. Those who have pensions funds will have a waiting period until September of next year to make their final decisions know, to opt for a private or a public system for their respective pensioner savings.

The final activities of the outgoing Seimas constituted on passing amendments to the Law on Pension System Reform, required to launch an overhaul of the pension system in 2013. Those who have pensions funds will have a waiting period until September of next year to make their final decisions know, to opt for a private or a public system for their respective pensioner savings.

Those pensioner savers who want to withdraw from the second-pillar pension funds due to changes in the savings’ funding will only be able to build their retirement savings in Sodra (State Social Insurance Fund), starting from 2014. The second-pillar funds will keep their respective savings accumulated by 2014. On this date, those who are saving up, can turn to claim such funds at any given moment.

Furthermore, starting January 1st, 2014, those who are saving up in their pensions will have the possibility of making an additional 1% contribution to their respective pension funds. In such cases, the state could add a stimulus contribution, calculated at 1% of the average wage. On the year 2016, pensioners would be able to make a 2% contribution to their pension funds, whilst the state would match such additional contribution with a 2% additional payment.

Nonetheless, were the pensioners refuse to make additional contributions with their own money, they will also be able to continue building their retirement funds, saving boths through Sodra and their second-pillar funds.

Sodra’s transfers to the second-pillar funds, were reduced to 1.5% in 2012, but now will be raised to 2.5% next year. On 2014, the transfers will be reduced to 2% but then again raised to 3.5% in the year 2020.

Lithuania Tribune

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