PENSION SYSTEM REFORM IN LATVIA

Cala Sophia Espinho

Claire Kempka

Céline Mazingarbe

Ana Gonçalves

Valérie Racot

Matti Ratilainen

Eveliina Kiusijärvi Anja Mikkola

Sergi Munoz-Arroyo Inese Mavlutova

Maija Zieds-Ziedina Stanislava Titova

Introduction

The pension system in Latvia has some dificulties

The Minister for Social Welfare want to increase the current retirement age of 62 to 65 in a few years

Latvia’s problems

Unemployment Black economy GDP

Taxation problem Improve level 2, 3

Birth/Death rate Migration Life expectancy

2006 2007 2008 2009 2010 20110

200

400

600

800

1000

12001047.31075.51076.2

953 918.9840.1

78.8 71.1 91.3199.6 215.1 181.7

Economic activity employed res-idents

job seekers/other status

Years

Residents '000

Alternatives for pension system’s improvement

Unemployment

To increase the branches of industry To make trainings throughout the life of

company’s To welcome self employed person To give the possibilities to young people

early to start and to continue to work Suggest to the young people working in

contract apprenticeship

Black economy

The black economy today represents about 40% of the Latvian economy

A solution could be to divide the taxation in more products.

It would be interesting to control the border with Russia because the principal product of the black market comes from there.

Sentences for the employer in case of concealed work

Inspectors of URSSAF: civil action

A recovery of the contribution and application of penalties for payment delay

If the preliminary declaration of employment isn’t respected, a penalty is given.

Sentences for the employee who is working illegally

No social protection when he has an accident

Possible that employee doesn’t receive his salary

Financial sentences: a fine More sentences are attributed in every personal case

Birth Rate

Solutions to increase the Birth rate in Latvia Family Allowance

individuals who have to support effective and permanent at least two children under 20 years.

paid only from the second child and have a surcharge when the child is older than 14 years

Family card Issued from the SNCF, according big reduction

in many structures

Migration

Recovery of the situation could be done by providing workplaces to citizens here, for example to giving support for young businesses. That could give jobs not only for the Latvians but also attract immigrants to the country. Most important issue is that government has to establish policy for migration.

Life Expectancy and Quality of Life

The low life expectancy and quality of life is one of the problems that currently exist in Latvia.

Nowadays people from Latvia are showing serious difficulties in acquiring and maintaining good habits of life so as not to have so many problems at the level of health.

Life Expectancy and Quality of Life

Latvian people seem to show serious problems in relation to:

drinking habits, smoking habits unhealthy diet lack of physical exercise = sedentary life

All of this problems will contribute to the development of health problems that will cause the populace to spend money and resources on medical care, medication and treatments

Witch could have been avoided if there had been disease prevention and health promotion throughout the life in this population.

!

Life Expectancy and Quality of Life

It is absolutely necessary to intervene in each of these problems, so that the people

of Latvia will increase not only their life expectancy but also their quality of life.

it is necessary to start educating the population to acquire a healthy lifestyle

since his childhood.

Life Expectancy and Quality of Life

Possibilities to improvement Life expectancy and quality of life:

Invest more in training of health care professionals of Latvia in order to increase its capacity for action on children and remaining population.

Go to schools and intervene with children in order to improve their knowledge and behavior about oral health, a balanced diet and the need to exercise in their spare time

inform the adult and elderly population about the need to take a more active lifestyle in order to combat sedentary lifestyles.

Warning adult and elderly population about the various diseases that might appear due to unhealthy habits.

Have programs like screening units for Cholesterol, Diabetes and breast cancer, for example, because these diseases exist in a large scale.

Pension System

Two pension schemes: earnings-related pension and basic pension. pension index

The basic pension is financed by tax revenue 

The lifetime coefficient a mechanism that controls the amount of the

old-age pension When the lifetime expectancy increases the

lifetime coefficient reduces the monthly pension.

Earnings-Related Pension

Earnings-related pension payment for the employer 23,3 % of the gross salary

The employee’s share of the payment 5,15 % of salary 6,5 % of salary for the employee’s over 53 years old

The percentage of accruing depending on age: 18–52 years old: 1,5% 53–62 years old: 1,9% 63–67 years old: 4,5%. 

Family Pension

Family pension ordered by law widow pension and child pension

Pension’s amount depends on how much earnings-related pension the deceased person has collected

Thanks for your attention!