Money here and now? In Latvia, signatures are being collected for access to second-level pension savings
As stated, the author of the initiative is Girts Bumbers. He explains that the funds accumulated in the second level of Latvia’s pension system are personal financial savings of an individual, formed through social contributions and invested on their behalf in financial markets. Although the current regulations primarily provide for the use of these funds upon reaching retirement age, the economic reality and various life cycle risks require a more flexible approach to the use of accumulated funds, notes Bumbers.
He proposes to include in the law the possibility for an individual to voluntarily withdraw their second-level pension savings either fully or partially. The proposed changes, in his opinion, could be implemented through amendments to the Law on State-Funded Pension Provision and related regulations.
According to the author, a person could be granted the right to voluntarily request a full or partial payout of their second-level savings, and it should be stipulated that the payouts will be administered by the State Social Insurance Agency in cooperation with pension fund managers.
He calls for the establishment of clear conditions and limitations, such as mandatory maintenance of a minimum balance, withdrawal limits, or the application of taxes, to protect the interests of individuals in old age. Additionally, Bumbers suggests ensuring a simple, transparent, and digital application process.
“The implementation of changes does not require the creation of new institutions or significant additional expenses from the state budget, as the second-level pension savings are already individually accounted for and administered,” notes the author of the initiative.
In Bumbers’ opinion, the proposed changes would bring significant benefits to society. For example, people would be able to use their savings in critical situations (medical expenses, housing, family needs), which would reduce the risk of financial difficulties.
Also, he believes this would lessen the burden on the state social system—the ability to use personal savings would reduce the need for state benefits and social assistance.
In addition, the author believes that economic activity would increase—the withdrawn funds would be directed towards consumption, investments, or entrepreneurship in Latvia, contributing to growth in tax revenues and economic development.
Bumbers believes that greater flexibility will enhance residents’ trust in the pension system and the state, as people will see that their savings truly belong to them.
The initiative also emphasizes that the changes will promote financial literacy among the population and responsible decision-making about their future.