Younger people lead withdrawals from private pensions in Lithuania, says official

VILNIUS - Younger workers have led withdrawals from Lithuania’s second-pillar pension system following new rules allowing partial or full withdrawals, a senior official at state social insurance fund Sodra said.

"We observe that the highest withdrawal rates were among young people aged 25 to 35. The older the participants, the lower the withdrawal rate. In terms of income levels, those earning around the average wage were most likely to exit. Higher earners were less inclined to stop accumulating," Sodra Deputy Director Violeta Latviene said on Wednesday.

"One might have hoped for the opposite, as lower-income individuals should be the most interested in saving for retirement to ensure dignity in old age. However, younger people still have time ahead of them, and we see that some are signing new contracts even after terminating previous ones," Latviene added.

According to the official, residents who terminated their private accumulation and returned to the state system will receive an average of 1.06 pension accounting units.

Data released on Tuesday showed that approximately 550,000 people, or about 40 percent of system participants, ceased accumulation during the quarter, while 875,000 remained in the funds.

Nearly 3.2 billion euros were transferred to those who fully or partially withdrew, while approximately 1.3 billion euros were returned to Sodra.