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116 members of the Seimas voted in favor of the amendments to the law and 1 abstained. They will need to be signed by the president for it to take effect.
Under current law, pensions are only increased when there are two circumstances: an increase in the wage bill and an increase in gross domestic product (GDP).
The Ministry of Finance forecasts that, despite the coronavirus pandemic, the Lithuanian wage bill will continue to grow this year (4.8%), but GDP will contract (-1.5%).
For this reason, it was not necessary to increase pensions.
However, the government introduced amendments to the law proposing to modify the provision and stipulate that the indexation of pensions would not take place only if the two previous conditions were met, both in terms of GDP and reduction of wages.
Thus, if the Seimas modifies the law, pensions should increase by 7.17% from the beginning of next year, calculates the Ministry of Social Security.
As a result, the average old-age pension would increase from € 377 this year to € 404 next year, and the average old-age pension with the required seniority from € 399 to € 428.
However, this is not all, because the law provides for the possibility of increasing pensions in addition. The previous Seimas and the Provisional Government did not provide money for this in the budget. But the new government promises to find them.
Promised an additional raise
At the Seimas session, conservative Mykolas Majauskas said that it was important to meet obligations to pensioners.
“Laws were passed, including the president’s initiative to index pensions in addition to an average increase of 9 percent. This will require an additional 67 million euros. Funding and this will be done.
Retirees should not have the slightest doubt that the Government will fulfill its obligations and their pensions will increase as established by law ”, said M. Majauskas.
Tomas Tomilinas, a member of the Lithuanian Farmers and Greens Union faction, pointed out that the law does not change the formula for indexing pensions.
“In this case, it is just an improvement of the existing mechanism. Therefore, no revolution is being made. Life simply dictated its terms, its circumstances. We have a very atypical crisis, when we no longer have GDP growth, but we have a pretty good rate compared to other countries and we have a growing wage bill.
Therefore, these amendments, through the efforts of the opposition and the office, have created preconditions for a higher indexation of pensions, ”explained T. Tomilinas, adding that he is waiting for the Government to present an improved budget with funds additional for additional indexation of pensions.
He thanked the company for the higher salaries.
Remigijus Žemaitaitis, a member of the mixed group of members of the Seimas, was surprised that other parliamentarians attributed his merits to the Seimas or the Government.
“I would like to thank the Lithuanian entrepreneurs who have managed to increase their salaries proportionally every month, every year, and that the indexing is thanks to them.
If there were no wages, no exports, no production, and no business promotion, I probably wouldn’t be happy if we could enjoy and post how good or wonderful we are here and the 9%. if we will be able to index those pensions more, ”said R. Žemaitaitis.
Kęstutis Glaveckas, who belongs to the Mixed Group of Members of the Seimas, also considered philosophically: the belief that tomorrow there will be cakes does not always bear fruit.
“We promise 63 million. Next year it will be allocated regardless of economic growth and your status. That is good. That money, it goes without saying, comes from borrowed funds, from European money.
And that European money also appears in this line due to the suspension of the Stability and Growth Pact, which allows increasing the budget deficit, public debt and other indicators that previously stood still ”, said K. Glaveckas.
He warned that the coronavirus is unlikely to be overcome next year and people need support, but in economic terms it will raise many questions.
At that time, the Social Democrat Algirdas Sysas emphasized that the reform adopted to the law does not change the formula for indexing pensions, but rather the conditions to apply it or not. He recalled that in 2015 the pension indexation law was approved. and he thanked him that it was not revoked by either the previous or current rulers. The Seimas member also assured that there are pensions in Sodra to increase pensions.
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