The State Chancellery’s proposed reform of the early retirement pension (service pension) system, which has been conceptually approved by the government, does not truly address the core issue, considering that the goal was to significantly reduce budgetary expenditures, said Dr. Edgars Voļskis, economist and expert on the pension system, in an interview with the LETA news agency.
He noted that this is a highly politicized issue, as it provides an opportunity “to score extra points by saying: ‘Look how we fought for you.’”
Voļskis emphasized that instead of maintaining the early retirement pension system, the state should ensure that professions involving risks to life and health are compensated through rehabilitation opportunities, longer vacations, health insurance, and retraining programs.
At the same time, he rejected the idea of raising the early retirement age threshold.
“Let’s remember why we introduced early retirement pensions in the first place — for cases where people who have not yet reached the statutory retirement age can no longer perform their duties due to physical or mental limitations. Now we want to decide that this point will come even later than it currently does? Why are we lying to ourselves? The goal is for a person to be able to perform their job according to the highest professional standards.
When that is no longer possible for objective reasons, retraining opportunities must exist,”
Voļskis stressed.
He argued that the best course of action would be to set a specific year when Latvia would phase out early retirement pensions entirely and transition to a system in which all employees accumulate capital for their old-age pensions throughout their working lives.
To maintain legal certainty, early retirement pensions should, of course, remain for those who already receive them — but it is crucial not to create new recipients.
Instead of early pensions, professions currently unable to perform duties until retirement age should be provided with insurance coverage.
“Such insurance premiums would cost significantly less than future liabilities for early retirement pensions. Moreover, in professions involving risks to health and life, this risk can materialize at any moment — at which point the person could receive the insurance compensation.
It’s also important that any insurance contributions are an investment instrument
that stays within the national economy and does not create long-term liabilities,” the economist explained.
However, Voļskis admitted that politicians are unlikely to take such a risk, though he emphasized that it is essential for people to continue working as long as possible — ideally until retirement age — even if in a different profession. Therefore, the state must provide retraining opportunities.
“Even at 40 or later, people can learn new skills. Should cultural workers at 40 just stop working and sit at home? Continuing one’s career — even in a new field — and building up pension capital is a completely different story. I’m quite skeptical when I hear statements that it’s impossible to learn anything new or continue working. That’s primarily a question of attitude,” Voļskis said.
He underlined that the key issue is not whether a person continues in the same field or switches to another, but that they remain in the workforce until reaching retirement age.
As previously reported,
the government has conceptually approved the State Chancellery’s informative report on early retirement pension reform.
The proposal envisions that, starting in 2027, all professions not associated with regular risks to life and health could be excluded from eligibility for early retirement pensions. The reform would not affect those already employed in such professions, although they would face higher service requirements and potentially adjusted pension amounts. The proposed changes will undergo further discussion in the Saeima (Parliament), which will make the final decision.
The State Chancellery proposes excluding from the early pension system prosecutors, judges (to be covered by a special pension), diplomats, ballet dancers, puppeteers, circus performers, choir singers, orchestra musicians, solo vocalists, and theatre actors, offering instead support for retraining in other professions.
Additionally, it suggests excluding all positions and occupations where the performance of duties is not associated with regular risks to life and health, including support staff. These changes would apply only to individuals starting such work after the end of 2026.
At the same time, for those employed in early retirement professions as of the 1st of January, 2027 — except those already eligible for the pension — the proposal envisions a gradual increase in both the minimum retirement age and required service length. Both criteria would increase by six months each year, up to five additional years in general cases, and ten additional years for prosecutors. This gradual increase would not apply to employees with 15 years of service already completed in an early retirement profession.
Meanwhile, the Ministry of the Interior (IeM) objected to raising the minimum retirement age in this way, suggesting that any new regulation — including the retirement age and pension amount calculation — should not apply to officials with special service ranks who are still in service on the 1st of January, 2027, but have not yet gained eligibility for early retirement and who have at least 10 years of accumulated service.
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