BA School of Business and Finance Research Ageing in Europe Students: Laura Mazure Marita Greidāne...
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Transcript of BA School of Business and Finance Research Ageing in Europe Students: Laura Mazure Marita Greidāne...
BA School of Business and FinanceResearch
Ageing in EuropeStudents:
Laura Mazure Marita Greidāne
Endijs MelecisUļjana Salija
Reinis VucānsAnna Mavļutova
Research managers:
Inese Mavļutova
Terēze Korsaka
PLAN
• AGEING:
- MIGRATION
- NATURAL DECREASE OF CITIZENS• FIRST PILLAR• SECOND PILLAR• THIRD PILLAR
SOCIAL SECURIY TAX – 34,09%
Maternity benefits, disable pensions etc. – 14,09%
1st pillar -18% 2nd pillar – 2%
3rd pillar - private
1st pillar
• Launched in 1992.• The principle of generation and gender solidarity.• Working population pays the old age pensions.
2nd pillar
• Launched on 1 July, 2001• Everyone’s social contributions are invested into
the financial market and accumulated on the personal account
• Do not have to pay additional social contributions
Total redistribution of the pension capital contributions between
the 1st and the 2ndtiers of the pension scheme
Years 1st tier 2nd tier
2001 - 2006 18% 2%
2007 16% 4%
2008 12% 8%
2009 18% 2%
2010 18% 2%
2011 18% 2%
2012 18% 2%
from 2013 14% 6%
Number of persons involved in the second pension level- voluntary and obligatory
138138224219
304662 374523 423894 451024 468715 479330356924
409466
468608
525575573790
614540 627292 645113
0
200000
400000
600000
800000
1000000
1200000
2003 2004 2005 2006 2007 2008 2009 2010
Obligatory
Voluntary
3rd pillar
• Provides an opportunity to save money in private pension funds
• Managed by credit institutions, life insurance companies, investment firms and asset management companies
• Payments are placed in individual account
Conclusion I
• The decreasing of workers who can pay pensions certainly will cause the raising of the retirement age and influence the living quality for seniors.
• Nowadays Latvia runs a three-pillar pension system, which was started to reform soon after independence.
• The share of pensions is divided in two parts-for the first pillar 18% and for the second pillar-2%.
Conclusion II
• The reasons for depopulation in Latvia are negative birth balance and migration problems.
• People in Latvia are having the possibility to increase their pensions by implementing 3 pillar pension system.
• The size of pensions paid has been increased because of inflation and salary increase.
• In Latvia there are seven private funds for now. The third pension level also supply insurance companies.
Proposals I
• Government should give benefits four young people to motivate them stay in Latvia and start businesses – offer them tax reliefs, courses for young entrepreneurs for free etc.
• Government should pay benefits four young families with children.
• The campaign should be made like discussion in simple words, so people could realize this huge ageing problem.
Proposals II
• Latvian government have to indicate specific future of 3 level pension system in country, so people will start to believe in it.
• The government should explain, where the taxes paid are going, so it could help to reduce the black economy.