Pensions will grow both as the economy grows and under the pressure of the recession: the € 34 increase next year Business

The Seimas agreed on Tuesday that the indexation of pensions would take place even if the country’s GDP fell, but the wage bill would rise.

116 parliamentarians voted in favor of the reforms to the law, 0 against and 1 abstention.

Until now, the legislation has provided that pension indexation will not be carried out if at least one of these indicators is negative, such as a fall in GDP or a wage bill. This means that pensions will not be increased next year. In cases where indexing is not carried out, the rates in effect in December of the previous year will be applied.

The Social Democrat Algirdas Sysas affirmed in the Seimas session that it is not a question of any change in the formula, but simply an adjustment of the conditions when that formula can be applied and when not.

“This law was passed in 2015 and two fuses were installed. Until now, it has been that if the wage bill is growing and GDP is negative, it is a condition for not indexing pensions. Therefore, the suggestion that if the growth of the salary fund is, it would be necessary for the indexation to continue is a necessary solution, because the money in the social security fund is there ”, he emphasized.

M. Majauskas agreed that it is an important project and agreement for Seimas to comply with the obligations assumed with pensioners. He reported that after the approval of this reform to the law, the indexation will reach 9% next year, which will require 67 million. additional financing.

However, Kęstutis Glaveckas, which belongs to the Mixed Group, pointed out that this will be a commitment to allocate 63 million. regardless of economic growth.

According to him, those millions will be disbursed from borrowed funds, European money, and this is currently due to the suspension of the Stability and Growth Pact, which allows increasing the state budget deficit, the public debt.

“If the coronavirus is not overcome next year, 63 million. “People will be in great need of support, but in economic terms it will pose many problems, so I will abstain,” he said.

For his part, Remigijus Žemaitaitis summarized that the growth of pensions is not due to the Government or the Seimas, but to the country’s business, which increases wages every month and makes exports grow.

“The Seimas and the Government have not added absolutely anything here so that pensions are indexed today. I would like to thank the honest employers who have managed to raise wages proportionally every year for 10 years, and that indexation is thanks to them: yes there would be no wages, there would be no exports, there would be no production, I would hardly be afraid to rejoice and pose in what we are good at and 9%. We will be able to index pensions, ”emphasized the member of Seimas.

Pensions will be increased by 34 euros

M. Majauskas stated that the indexation of pensions rose to 9% at the initiative of the previous mandate and the president, but the outgoing government contributed only 7% to the budget. indexing

The state budget for 2021 foresees 249 million. EUR only for automatic indexation of pensions 7.17%.

However, M. Majauskas promised that pensions will definitely go up to 9 percent, and the new Government will find the necessary 67 million. additional financing.

“We say that all commitments must be met, including the part of the pension indexation proposed by the president, which raises the indexation from 7% to 9%,” he added.

The Ministry of Labor and Social Affairs has indicated that automatic indexing would increase the average pension by € 27 to € 404 next year, or up to € 411 if the president’s proposal is approved.

The average pension is now € 377 and € 399 with the required service time.