this must end as soon as possible

this must end as soon as possible
this must end as soon as possible

While some politicians have been suggesting for a while that residents withdraw money accumulated in second-tier pension funds or withdraw from the pension accumulation system, not everyone agrees. Such a system has long been criticized by scientists, and the chairperson of the Confederation of Lithuanian Trade Unions (LPSK) Inga Ruginienė considers such accumulation to be the scam of the century.

“I am in no way saying that there shouldn’t be some additional tools to save for our old age, it exists in other countries as well. But those additional tools are completely voluntary and freely chosen, which is the key point I’m trying to make. Unfortunately, in Lithuania we have a flawed system that only Eastern European countries have been tempted by. Western Europe immediately refused it and said that it would not change its established system,” said I. Ruginienė on the “Nauja diena” TV show of “Lietuvos rytos”.

She likened such a system to a trap.

“For some reason, we rushed to adopt the law by creating a model where people are automatically enrolled in the second tier of pension and after half a year they lose any possibility to withdraw. The only possible exception is a once-in-a-lifetime twelve-month suspension of payments. And that’s it. If you fall into a trap, then you leave it without the right to choose otherwise, you cannot change anything”, said the chairman of LPSK.

It is true that pension savers can still change one fund to another, but such a service is paid for.

“Such a system is really unacceptable, the practice of other countries also shows that – Poland abandoned this system a long time ago, Estonia has already said: thank you, but no.” Developed countries are moving in the direction that there is one mandatory pension accumulation, which we also have in Lithuania, namely “Sodra”, to which we pay taxes and secure a certain pension base.

If we see an opportunity, if the pension funds convince us that this is a successful investment, we can sign the contract and save additionally. But I don’t understand why that process has to happen automatically. Even after you opt out, you are automatically refunded and have to opt out again and again. Doubts arise as to whether this is really a correct system or whether it should take place in a democratic country,” I.Ruginienė pondered.

Therefore, the interlocutor advised the authorities to abandon the automatic enrollment of people in second-level pension accumulation as soon as possible.

“This is the money of all of us, the employees. The decision to accumulate must be our free choice and at any time, if we see negative results, we must have the right to terminate the contract and choose another method or none at all. This social justice must be restored as soon as possible – we must get out of this flawed system,” said the woman.

In addition, I.Ruginienė added that the funds themselves can freely advertise themselves, show results, compete with each other and convince the population that they need to save more.

“And yes, if the results are stunning, to ensure that more dignified old age.” But it must be the moment of the person’s choice, and not the system itself records, selects the fund, and if I want to change it, I have to pay extra. This is complete absurdity”, emphasized the chairman of LPSK.

She had more criticism for pension funds.

“What do you call a business that automatically receives customers?” For which does the state not only ensure an automatic flow of customers, but also other support mechanisms? Dream business. It’s not just anyone talking about it – world-class economists who have received Nobel prizes are talking about it. They talk about the fact that there cannot be such a system in a democratic country, when we support one type of business with our earned money and that return seems questionable so far,” said I.Ruginienė.

One of the problems why it was decided to apply such a pension accumulation system in Lithuania is the natural aging of the society, which may lead to the fact that there will be too few people of working age left within the framework of the century. However, I.Ruginienė emphasized that not only Lithuania is facing such problems.

“This is a problem for the whole of Europe. Society is aging, we are raising fewer children than our social and labor market system would require. I have already said once that Western Europe solves these problems in a simple way – the integration of elderly people into the labor market is increasing, which is an unacceptable topic in Lithuania.

Our businessmen are still looking for roundabout, roundabout ways to bring in citizens from third countries to fill vacancies, but make no effort to integrate both people with special needs and the elderly. It’s no secret that if an employee who is over 55 years old loses his job, there are practically no chances of finding another equivalent job,” she said.

According to I.Ruginienė, solving such a problem with workers from abroad is a cheap and easy way.

“Our employers really want it, they choose an easier way – the import of cheap labor.” But this will not improve the demographic situation, or stop aging, or solve long-term problems. And the long-term problems are that our workplaces are unattractive to workers who are already in the European Union and could come to work here – the wages are too low.

Even third-country nationals rarely stay in Lithuania, because they move on to better working conditions. We go around in the same circle – we don’t care about the elderly, nor the youth and their health, nor the working conditions and salary,” said I.Ruginienė.

The article is in Lithuanian

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