Following the proposal to allow the withdrawal of pension funds, there was talk of an important barrier: certain conditions

Why did you choose such an amount?

The initiator of the offer, Gintautas Paluckas, explained on the show why such an amount was chosen.

First of all, this proposal, as a compromise, was born after the Seimas sent us to modify the original proposal, which did not specify a threshold at all, but the average of five thousand instead of eight, as in this case in Estonia. , accumulated in pension accounts is related to a very low periodic annuity payment that subscribers would receive if they continued to participate.

We determined this amount by looking at the information available from Sodra sources when people who had participated in the accumulation of pensions for 15 years and the like concluded their first pension annuity contracts and, sadly, were very unpleasantly surprised to see that those periodic benefits they were extremely low. “Twenty, thirty, maybe even forty euros, but qualitatively it does not change the economic situation in retirement,” says G. Paluckas.

When asked if a negative sign can be seen in such a system, Tadas Sharapov, a professor at ISM University, says the idea is good, but there is still no need to rush.

“I think that idea is worth considering and it may not be so attached to a specific amount, but basically the right to dispose of my money to those who accumulate pensions if those rights are extended, is fine, but we have to consider other aspects.

If we look at the very idea of ​​why people are encouraged to accumulate pension funds, it is simply a certain distribution of risk so that not the entire burden of paying pensions falls on the state and other taxpayers, the problems social aging and some scale effects in pension funds. There are other arguments to make such a decision, which opens up more opportunities to dispose of the money accumulated in pension funds. Such decisions must be made with care, without making sudden movements or quick decisions without pondering, ”says Sharapov.

According to G. Paluck, we misunderstand the old-age pension guarantee.

“Because that guarantee can only be given by the State, which guarantees the taxes of our employees to the” Sodra “system. Private funds, for their part, do not guarantee anything. It is simply private savings for old age under predefined conditions that we cannot choose and it is a limitation.

That restriction is based, so to speak, on the public interest that we all have to think about old age, and that is true, but it has been statistically calculated that low-income people have relatively no added value because their returns far outweigh inflation. Overall, Sodra’s return, which is clearly in the form of growing pensions, is certainly outpacing that of private pension funds.

These are obvious numbers, so to talk about who benefits and who doesn’t, we probably have a certain shelf for middle-income people that is profitable for those people and not really worth it for low-income people. “

For pension funds – risk

When asked which path would remain the fairest, or perhaps even better, than the one proposed, the ISM professor assured that even a person should have more opportunities to decide, but it would also be important to establish specific conditions.

“If we do it in absolute terms, setting certain amounts and under what conditions this money can be made available, I think this is a challenge that must be addressed considering all the factors that affect both the capitalized pension, the pension fund and the state, and then access a threshold of approximately five thousand, where we could say that it is the scope that pension accumulators can have at any time as soon as they decide to terminate the contract and withdraw the amount.

On the other hand, it is not necessary to leave it at all without any type of barrier, because from the perspective of pension funds, they can have liquidity problems if one day we allow everyone to freely dispose of that accumulated money and withdraw it at any time. The pension fund is not in a position to operate effectively in this case as they need to hold certain amounts of money to provide liquidity and the like.

I think that a compromise should be sought, because consensus is almost impossible, and if we had to look at some situations or cases in which a person needs to take advantage, such as an illness or a disaster, to have more reserves on that money, I think it is worth it. the sorrow. considering. “