Kilis stirs pension waters

RIGA - The statement by the Strategic Analysis Commission’s chairman, Roberts Kilis, that Latvia might have to abandon its pension system in the future was “misbegotten and damaging to society’s trust in the pension system,” said Welfare Minister Ilona Jursevska (Union of Greens and Farmers) in an interview with Latvian State Radio on June 30, reports news agency LETA. “Making such statements at this time is misbegotten and risky. And the statement was made by a person whose opinion carries much weight,” said Jursevska.

Jursevska said that the pension system would continue to function normally. When the system was being developed at the beginning of the 1990s, all the possible factors were taken into account - aging society, low birth rate, emigration and others. Last year, several measures were taken for stabilization of the pension system; there are several development scenarios for the pension system - the optimal, the optimistic and the pessimistic, which were developed taking into consideration various risks.

The minister believes that “it is not right to compare Latvia’s pension system with that of other countries that have different pension systems.” Several European countries’ pension systems have been badly hit by the economic crisis, she added.
President Valdis Zatlers, however, believes that Kilis has launched debate on the necessity of reforms in the social insurance system. Such important matters must be openly discussed and well thought out in a democratic society, pointed out the president.

At the same time, Zatlers was surprised by a For a Good Latvia letter, where the political alliance demanded an explanation from the president regarding Kilis’ statements. Zatlers stresses that For a Good Latvia consists of Latvia’s First Party and Latvia’s Way, which are equally responsible for leading Latvia’s economy and social insurance system to such a disastrous state as it is in today, such that senior citizens can no longer receive decent pensions. The alliance and its members “should take personal responsibility for the fact that the active, able-bodied generation doubts the sustainability of the pension system,” stresses the president.

Kilis said in an interview with the magazine Klubs that Latvia would have to abandon its pension system and replace it with a system of poverty allowances. “People of my age and younger will not be paid pensions,” claimed Kilis.

The diminishing population in Latvia’s regions during the next five years will force the government to take some very radical decisions, and one such decision will be to abandon the pension system, social anthropologist Kilis said in the interview.
Kilis believes that the pension system will be replaced by a poverty allowance. “When people will reach a certain age, they will be told that the country will most probably not be able to provide them with pensions, and poverty allowances will be provided instead,” explained Kilis.

President Zatlers, though, stressed that Kilis’ statement “is his personal opinion.”