It is necessary to review Latvia’s retirement pension system, because the volume of the state’s binding commitments towards maintenance of the retirement pension system is allocated at EUR 4.5 billion, as reported by State Audit’s chief Elita Krūmiņa at a press-conference.
Performing an audit of ministries’ and state institutions’ expenditures in 2019, Latvia’s State Audit turns attention towards the retirement pension system.
The audit institution has estimated that maintenance of the retirement pension system costs the state budget EUR 74 million every year. The amount of commitments or the amount needed to pay pensions in the future is estimated at EUR 4.5 billion.
Currently Defence Ministry’s estimated pension costs reach EUR 1.3 billion, Foreign Affairs Ministry’s amount is estimated at nearly EUR 53 million, Corruption Prevention and Combating Bureau’s (KNAB) amount is estimated at EUR 11.5 million, Culture Ministry’s amount – EUR 1.5 million, Welfare Ministry’s – EUR 645 million, and the pension cost amount estimated for the office of the prosecutor is EUR 158.2 million. Although Interior Affairs Ministry has not re-calculated amounts for retirement pensions, the amount, according to estimates from auditors, could reach EUR 2 billion.
The State Audit’s council member Edgars Korčagins says currently retirement pensions are available to workers of multiple different industries, including workers from military, transport, culture and medical sectors. Korčagins mentioned that retirement pension payment order should be reviewed.
«Retirement pensions are mainly paid to persons unable to continue working. However, it was concluded that seven out of ten persons continue actively working. Additionally, retirement pensions are allocated under different conditions. For example, military personnel retire at 33,» adds the State Audit council member.
According to the State Audit, retirement pensions system should be changed. «The retirement pension matter is topical because there is a number of professions that want to join this pension system, especially considering the retirement pension is larger than old age pension, and it can be paid much earlier than age pension,» explains Krūmiņa.
She adds the State Audit has been talking about the retirement pension problem since 2015. However, now the state auditor has hopes this matter will be discussed at its core, because like it was for audits performed in previous years institutions are aware of the retirement pension costs for the state budget – EUR 4.5 billion.
«There are a large number of interested parties, but we have to stop and consider if we can afford it. Is this system balanced when compared to the age pension system? We have to think how to resolve this problem,» Krūmiņa stresses.
— to bnn-news.com