By Vaida Kalinkaitė-Matuliauskienė, LRT.lt.
From January 1, Lithuania will introduce changes to its second pension pillar. Experts remain divided on whether it is worth withdrawing for those already enrolled – or joining for those who have not yet signed up.
Some specialists urge people to make their own independent decision. LRT.lt answers the key questions: what exactly is the second pension pillar, how will it change, and what are pension annuities?
What is the second pension pillar?
Lithuania’s pension system is built on three pillars.
The first pillar is the state pension, administered through Sodra (the State Social Insurance Fund). All employees effectivelly participate in this scheme automatically, paying compulsory social insurance contributions. Pension amounts are calculated on the basis of so-called “pension points”, which reflect a person’s contribution history and years of service.
The second pillar is voluntary. Under the current rules, employees contribute 3% of their gross salary, while the state adds a further 1.5% of the national average wage.
Read more: LRT.LT
