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President Gitanas Nausėda asked the government on Friday to review the pension indexation mechanism to ensure faster growth in old-age pensions.
This position was expressed by the President after a meeting with the Minister of Social Security and Labor, Linas Kukuraitis, and representatives of high-level organizations.
“The president urges and asks the government to make appropriate decisions to increase pensions faster, both in January 2021 and beyond than before, until we reach the minimum standard,” the adviser told reporters on Friday.
According to the adviser, the president is in favor of indexing pensions next year, although there are risks.
“This is a very important issue, but it carries risks, because, as you have seen, the forecasts of the Ministry of Finance show that both the gross domestic product and the wage bill are in the red, which means that the indexation of pensions is, in principle, the new year should start ”, said I. Segalovičienė.
“The president’s position is unequivocal: we must ensure that pensions continue to be indexed next year,” said the adviser.
According to her, the minimum standard is that pensions reach 50 percent. average salary (VMU), which in the first quarter of this year was “in the hands” of 879.2 euros.
“It takes a common standard and consensus for pensions in Lithuania to be 50%. Vytautas Magnus University Network,” said I. Segalovičienė.
“Pensions today represent about 42 percent. VMU, when the European Union average is 61 percent. It is a minimal program and we have to focus and do it,” he said.
According to the president’s adviser, the poverty rate for retirees is 42 percent, which means almost 250 thousand. People currently live in poverty.
“The well-being of older people must be given the highest priority,” said I. Segalovičienė, adviser to the President on economic and social policy.
The exact amount is unclear
Social Security and Labor Minister Linas Kukuraitis says he does not want to name a specific amount for how much his pension could increase next year.
“I don’t want to name it yet, we really do have at least some options until those options are discussed in government, we don’t want to talk about them publicly, because that will put some public pressure on colleagues,” the minister told BNS in the presidency on Friday. .
According to him, the coronavir crisis has adjusted the financial situation and this may affect pensions, but it is not clear what.
“That it will have an impact on our public finances is unequivocally linked to our ability to pay pensions. I will be able to say whether and how much it will have an impact after agreeing on the budgets together with the Minister of Finance, both the state and Sodra, L. Kukuraitis said.
He argued that pensions should be a priority because retirees are the poorest group in society. According to the minister, it is not yet possible to speak about the growth of the average old-age pension to 400 euros.
“In this case, I wouldn’t even talk about it, because even up to that limit there are 20 euros,” said L. Kukuraitis.
According to Sodra, the average old-age pension in the country in May amounted to 376.06 euros. At that time, the average pension with the required duration of service was € 398.85.
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