Lithuanian pension system’s reforms following demographic and social transitions
|Title||Lithuanian pension system’s reforms following demographic and social transitions|
|Publication Type||Working Paper|
|Year of Publication||2013|
|Authors||A. Bitinas, A. Fiori Maccioni|
|ISBN Number||978 88 84 67 835 5|
|Keywords||demographic risk, Lithuanian pension system, markov chain, new entrants, pension forecasting, population forecasting, public budget|
The aim of this article is to define the Lithuanian public pension system reforms, influenced by the last economic crisis and social challenges (ageing processes, raising social expenses). The paper also investigates the influence that current demographic trends will exert on the financial dynamics of the pension system. Results reveal the long-term sustainability of the system, albeit at a cost of initial negative balances to be covered with public budget. Also, the system may expose pensioners to the risks of poverty and social exclusion because of low payments. It is then necessary to intensify the pension system’s reform. Policy solutions should encourage and extend employment (especially for the disadvantaged) and rebuilt trust in both public and private pension systems.