CHANGES OF LITHUANIAN PENSION INSURANCE SYSTEM DURING CRISIS PERIOD

Abstract

This article analyze changes of state social insurance and private pension insurance systems during crisis in Lithuania.Research results have showed that pensions in Lithuania are among lowest in Europe. During the crisis pension scheme members had financial difficulties because of following reasons: increase in emigration and effect of shadow economy, as well as decision of politician to reduce payments size to private pension funds. It is possible to mark out perspective of pension system – in order to reduce the scale of the shadow economy State Social Insurance Fund must to divide payment into equal parts for insurer and the insured and to limit power of politician decisions to private insurance system. Optimal benefit of retirement in the future is a fixed pension from the state budget, witch is paid for all pensioners with minimum length of service, an additional pension would be provided from State Social Insurance Fund, and the third part from private pension funds.According to the foreign experience, total pension should be about 70 percent of person income. DOI: https://doi.org/10.15544/ssaf.2012.11