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The Lithuanian government led by Prime Minister Saulius Skvernelis intends to make the first decisions in connection to restructuring of the pension system in the nearest future, while implementation of all reforms may take until the end of 2019, according to the measures of the government plan published on Thursday.
Pensioners in the middle of money
Pensioners in the middle of money
© Shutterstock

In the first quarter of this year, the debt of the state-run social insurer Sodra should be moved to the state treasury. The Sodra debt stood at 3.894 billion euros at the end of 2016, including 3.593 billion euros in loans provided by the government.

Other tasks for this quarter also include approval of the make-up and management requirements for the Sodra reserve fund, which has not yet been started. The reserve fund's share for pensions is expected to be at least 400 million euros by 2020.

The bulk of pension reforms are scheduled for next year. By the end of 2018, Lithuania plans to consider movement of financing of the second phase pension fund from Sodra to the budget, as well as discuss ways of improving the second and third phase pension funds and promote professional pensions.

Finance Minister Vilius Šapoka told a news conference earlier on Thursday that the Lithuanian residents who are expected to have the lowest old-age pensions would be advised to make additional contributions to their pension fund or return to Sodra.

Plans for 2018 also include assessment of the possibilities of reducing the number of exceptions for Sodra contributions, giving up restriction of Sodra pension sizes by calculating the additional pension size by all of a person's insurable income, as well as analyzing the possibilities of applying a cap on Sodra contributions and draft relevant bills.

The pension system reform should be completed in 2019 by drafting and implementing a plan for financing the general pension share from the state budget.

The government of Skvernelis expects the proposed measures would allow raising the average old-age pensions by 27.5 percent by 2020, in light of the growing economy and salary fund.

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