Skip to main navigation menu Skip to main content Skip to site footer

Vol. 3 No. 4 (2015)
Dilemmas of Modern Economy and Business

Articles

Sustainability of Pension Systems in the Baltic States

https://doi.org/10.15678/EBER.2015.030409

Published 2015-12-30

  • Olga Rajevska

Olga Rajevska
University of Latvia

Abstract

Objective: The objective of the paper is to identify how the concept of sustainability is understood and ensured in the pension systems of Estonia, Latvia and Lithuania; and what implications it brings to the performance of pension schemes. Research Design & Methods: Analysis of various conceptual and methodological approaches to the notion of sustainability of pension systems. Comparative analysis of present pension legislation, as well as preceding stage of pension reforms,  accompanied by a number of numerical models. Findings: The understanding of sustainability is limited by narrow 'fiscal' meaning in Latvia, compared to more a multifaceted concept that includes the principle of social fairness and which can be traced in the logic of Estonian and Lithuanian legislators. Implications & Recommendations: In the long-term, pure financial appreciation of sustainability is misleading, low level of credibility may cripple a financially sound but socially unfair system; the perceived unfairness of redistribution can undermine the public support to, and, therefore, sustainability of pension systems. Contribution & Value Added: The originality of this work lies in studying how differences at policy formulation stage and in the very design of pension schemes influence pension system sustainability in countries with a very similar initial conditions and socio-economic environment.

Keywords

pension systems, sustainability, equity, policy formulation, Baltic States

PDF

Author Biography

Olga Rajevska

Mag. hum. in the Baltic Sea Region Studies, PhD student, acting research assistant at the Economics and Management Research Institute of the University of Latvia. Research interests: pension systems and their good governance, equity in social policy, evaluation criteria of pension reforms, comparative analysis of the Baltic States

References

  1. Barr, N. (2006), Non-Financial Defined Contribution Pensions: Mapping the Terrain In Holzmann, R. & Palmer, E. (Eds.), Pension Reform: Issues and Prospects for NDC Schemes (pp.57-70). The International Bank for Reconstruction and Development / The World Bank.
  2. Bartkus, A. (2013). On Future Pensions from Second Pillar Pension Funds. Organizations and Markets in Emerging Economies. 4-1(7), 121 - 140.
  3. Bitinas, A., & Maccioni, A.F. (2014). Lithuanian Pension System’s Reforms Transformations and Forecasts. Universal Journal of Industrial and Business Management, 2(1), 13-23.
  4. Chłoń-Domińczak, A., & Strzelecky, P. (2013). The minimum pension as an instrument of poverty protection in the defined contribution pension system – an example of Poland. Journal of Pension Economics and Finance, 12, 326-350.
  5. Dundure, I. (2013). Role of the Elderly in Building Sustainability of Pension System. Journal of International Scientific Publication: Economy & Business, 6(2), 131-141.
  6. European Commission (2009). Monitoring the social impact of the crisis: public perceptions in the European Union. Analytical report. Flash EB Series No. 276. Retrieved on November 1, 2014, from http://ec.europa.eu/public_opinion/flash/fl_276_en.pdf.
  7. European Commission (2010). Progress and key challenges in the delivery of adequate and sustainable pensions in Europe. European Economy, 71, Brussels: DG Economic and Financial Affairs.
  8. European Commission (2012a). Active Ageing. Report. Special EB no. 378. Retrieved on November 1, 2014, from http://ec.europa.eu/public_opinion/archives/ebs/ebs_378_en.pdf.
  9. European Commission (2012b). Pension Adequacy in the European Union 2010-2050, p. 118. Retrieved on November 1, 2014, from http://ec.europa.eu/social/BlobServlet?docId=7805&langId=en.
  10. Grech, A.G. (2010). Assessing the sustainability of pension reforms in Europe. Centre for Analysis if Social Exclusion, London School of Economics. Retrieved on November 1, 2014, from http://sticerd.lse.ac.uk/dps/case/cp/CASEpaper140.pdf.
  11. Hagemejer, K., & Woodall, J. (2014). How should the adequacy of pension coverage be balanced against financial sustainability? Australian Journal of Actuarial Practice, 2, 21-32.
  12. Holzmann, R., & Hinz, R.P. (2005). Old Income Support in the 21st Century: An International Perspective on Pension Systems and Reform. Washington, D.C.: The World Bank.
  13. Holzmann, R., Hinz, R.P., & Dorfman, M. (2008). Pension Systems and Reform Conceptual Framework. Social Protection Discussion Paper 0824, The World Bank. Retrieved on November 1, 2014, from http://siteresources.worldbank.org/SOCIALPROTECTION/Resources/SP-Discussion-papers/Pensions-DP/0824.pdf.
  14. Holzmann, R. (2012). Global Pension Systems and Their Reform: Worldwide Drivers, Trends and Challenges. Social Protection & Labor Discussion Paper 1213. The World Bank.
  15. Lazutka, R. (2006). Pension Reform in Lithuania. In E. Fultz (Ed.), Pension Reform in the Baltic States (pp. 267-350). Budapest: International Labour Office.
  16. Leppik, L., & Võrk, A. (2006). Pension Reform in Estonia. In E. Fultz (Ed.), Pension Reform in the Baltic States (pp. 17-142). Budapest: International Labour Office.
  17. Lusardi, A., & Mitchell, O. S. (2011). Financial literacy around the world: an overview. Journal of Pension Economics and Finance, 10, 497-508
  18. Medaiskis, T. (2011). Pensions at the Time of Recession. The Case of Lithuania. Zeitschrift fur Socialreform (Journal of Social Policy Research), 57(3), 251-266.
  19. Medaiskis, T., & Jankauskiene, D. (2013). ASISP Country Document. Pensions, health and long-term care. Lithuania. Retrieved on November 1, 2014, from http://socialprotection.eu/files_db/1334/LT_asisp_CD13.pdf.
  20. Muller, K. (2006). The Political Economy of Pension Privatisation in the Baltics. In E. Fultz (Ed.), Pension Reform in the Baltic States (pp. 397-420). Budapest: International Labour Office.
  21. OECD (2009). Policy Brief: The Benefits of Long-term Fiscal Projections. Retrieved on November 1, 2014, from http://www.oecd.org/governance/budgetingandpublicexpenditures/43836144.pdf.
  22. Pūķis, M., & Dundure, I. (2012). Sustainability of the Pension System in Latvia. Journal of Economics and Management Research, 1, 139-154.
  23. Rajevska, O. (2013). Equity Criterion in Pension Systems Assessment and Its Manifestation in Estonian and Latvian Pension Schemes. Journal of Economics and Management Research, 2, 118-130.
  24. Rajevska, O. (2014). Adequacy of Pensions in the Baltic Region. Reģionālais Ziņojums (Regional Review), 10, 41-51.
  25. Rajevska, F., Rajevska, O., & Stavausis, D. (2014). Challenges for the Sustainability of Latvian Pension System. In B. Bela (Ed.), Latvia. Human Development Report 2012/2013. Sustainable Nation (pp. 13-33). Riga: Advanced Social and Political Research Institute of the University of Latvia.
  26. Rasnača, L., & Niklass, M. (2014). Social Sustainability: Are Unequal Societies Sustainable?. In B. Bela (Ed.), Latvia. Human Development Report 2012/2013. Sustainable Nation (pp. 34-44). Riga: Advanced Social and Political Research Institute of the University of Latvia.
  27. Schokkaert, E., & Van Parijs, P. (2003). Social Justice and the Reform of Europe's Pension Systems. Journal of European Social Policy, 13(3), 245-279.
  28. Skačkauskienė, I. (2013). Peculiarities of Labour Income Taxation in the Baltic States. Entrepreneurial Business and Economics Review, 1(4), 57-69.
  29. Stavausis, D. (2013). Izglītības veicināšana finanšu jautājumos kā spējināšanas instruments Latvijā: valsts fondēto pensiju gadījums. In F. Rajevska (Ed.), Sociālā cilvēkdrošība: spēju attīstība, sadarbība, iekļaušana (pp. 141-160). Rīga: LU Akadēmiskais apgāds.
  30. Tavits, M. (2003). Policy Learning and Uncertainty: The Case of Pension Reform in Estonia and Latvia. The Policy Studies Journal, 31(4), 643-657.
  31. Vanovska, I. (2006). Pension Reform in Latvia. In E. Fultz, (Ed.), Pension Reform in the Baltic States (pp. 143-266). Budapest: International Labour Office.
  32. Vork, A., & Paat-Ahi, G. (2013). ASISP Country Document 2013. Pensions, health and long-term care. Estonia. Retrieved on November 12, 2014, from http://socialprotection.eu/files_db/1372/EE_asisp_CD13.pdf.
  33. Winter, S. (1990). Integrating implementation research. In D. Palumbo, & Calista, D. (Eds.), Implementation and the Policy process. Opening–up the Black Box (pp. 19-38). New York: Greenwood Press.
  34. World Bank (1994). Averting the Old Age Crisis: Policies to Protect the Old and Promote Growth. Oxford: Oxford University Press.
  35. Zaidi, A. (2010). Sustainability and Adequacy of Pensions in EU countries: Synthesis from a Cross-national Perspective. European Papers on the New Welfare, 15, 65-76.
  36. Zilvere, R. (2013). ASISP Country Document 2013. Pensions, health and long-term care. Latvia. Retrieved on November 1, 2014, from http://socialprotection.eu/files_db/1415/LV_asisp_CD13.pdf

Downloads

Download data is not yet available.

Similar Articles

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 > >> 

You may also start an advanced similarity search for this article.