State Audit has concluded the retirement pension system costs the state budget EUR 74 million annually, but the amount of commitments or the amount needed to pay retirement pensions in the future is estimated at EUR 4.5 billion. State auditor Elita Krūmiņa pointed towards problems uncovered in the retirement pension system, urging to review it.

Commenting on State Audit’s conclusions, Kariņš admitted the retirement pension system should be reviewed. However, specific proposals, he said, should come from Welfare Ministry. «There are visible flaws in the retirement pension system. These problems could eventually increase pressure on the state budget,» said the prime minister.

Healthcare Minister Ilze Viņķele, who was once Latvia’s Welfare Minister, adds that the retirement pension system is a «hot potato, and for years it has not been possible to progress this issue». According to her, the coalition should decide on an age threshold for retirement pension, because the state has decided to gradually increase the general pension age in Latvia.

Finance Minister Jānis Reirs, who was also once Latvia’s welfare minister, said retirement pensions are not paid from the social budget – they are paid from the state budget. «The retirement pension system is not related to the social budget or social fees. This means pensioners should not worry about State Audit’s report and longevity of the social budget,» said Reirs.

Welfare Ministry’s Social Insurance Department’s senior expert Dace Trušinska had previously said that all existing special retirement pension laws should be reviewed, establishing a balanced transition period of reviewing conditions for both the issue and payment of retirement pensions.

Welfare Ministry admits that in relation to retirement pension provision conditions it would be necessary to review the range of persons that are provided with this pension, at the same time reviewing the need to increase pension age and seniority.

The ministry believes each ministry and institution whose employees already have or are planned to be provided with retirement pension should review the usefulness of quicker retirement.

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