BaltCap case shows need to increase pension system credibility – advisor

VILNIUS – As Sarunas Stepukonis, a former partner at BaltCap Infrastructure Fund, embezzled and gambled away millions of euros from the fund Lithuanian pension funds had invested in, presidential adviser Irena Segaloviciene says this case shows the need to increase the credibility of the Tier 2 pension system.

Lithuania needs an alternative system to the social security pension system that is credible and meets people's needs and provides an additional part of pensions in old age, she underlined.

"It seems that pension funds can make mistakes and must correct them. The BaltCap case shows that we need to increase the credibility of the Tier 2 pension system in the eyes of people and go back to further developing the president's idea of allowing people to withdraw part of the funds," the presidential advisor told the Ziniu Radijas news radio on Tuesday.

She says the BaltCap case should encourage the responsible state authorities, first of all the Social Security and Labor Ministry, to analyze and look for ways to further protect pension savers: "I am also talking about additional protection mechanisms, perhaps additional obligations for funds, making investments public, insurance mechanisms". 

However, she also believes that pension funds themselves should show greater social responsibility and initiate actions on how they will specifically improve pensioners' savings. 

It is alleged that some 40 million euros may have disappeared from companies owned by BaltCap Infrastructure Fund. It is estimated that Lithuanian pension fund management companies may have lost around 3 million euros in investments.