Latvian Pension Reform: What Will Change for 'Length of Service'

The Ministry of Justice recently announced its proposals for amendments to the Law on Special Pensions for Judges and Prosecutors – they are requesting a "more lenient transition to the new regulation" for new judges and prosecutors.

What the Commission Decided

• Length of service pensions will only be granted to those whose work is associated with increased risk, threats to health or life. The changes aim to reduce the differences between recipients of length of service pensions and the rest of society, creating a fairer overall system.

• Gradually over 5 years, the length of service required to receive a length of service pension and the retirement age will increase by 6 months annually, and the last 2 months will be excluded from the pension calculation.

• Individuals who have accumulated less than 10 years of service by January 1, 2027, will have the formula for calculating their length of service pension changed: it will be calculated based on the salary received over the last 10 years, ending two months before leaving service.

• The minimum and maximum amounts of the length of service pension will be reduced by 10-20 percent through equalization between services, including a 5 percent reduction in the case of dismissal or removal from office.

• Time worked in the private sector can be included in the length of service, but not more than 20 percent of the total length of service.

• The length of service pension will be paid until the general retirement age is reached. After that, its payment will cease, and the individual will receive an old-age pension (calculated in the general manner from social security contributions).

• Prosecutors and judges will be excluded from the professions eligible for "length of service" pensions. However, "special pensions" are provided for them, as well as for diplomats.

• The changes will affect ballet artists, circus performers, choir members, theater actors, orchestra musicians, soloists, and vocalists.

Nuances of the "Special" Pension

The Ministry of Justice has prepared its proposals for amendments to the Law on "Special Pensions" for judges and prosecutors:

• an increase in the established minimum and maximum amounts of special pensions for both judges and prosecutors by 5%;

• preservation of the right to a special pension for senior judicial officials and partial consideration of work experience as a lawyer and academic experience;

• to receive a special pension, an individual must have 25 years of work experience, of which the last ten years must have been worked in the position of judge, prosecutor, or ombudsman, as well as reach the age established for retirement pensions;

• a special pension can also be granted to an individual who has been dismissed for health reasons with at least 25 years of service, of which the last three years were worked as a judge, prosecutor, or ombudsman. (Currently, judges can retire with a length of service pension at age 65, and prosecutors at age 50 with 20 years of service, of which ten years were worked in the relevant position);

• for prosecutors, the minimum retirement age for length of service is planned to be gradually increased by 15 years to align it with the current retirement age for judges – 65 years. This condition is proposed to apply to those prosecutors whose length of service will exceed ten years but not exceed 15 years by the end of next year;

• the changes will not affect current recipients of length of service pensions. They will fully apply to those officials who start working as judges, prosecutors, or ombudsmen from January 1, 2027, and work in these positions for less than 15 years, as well as to those who will be appointed as judges, prosecutors, or ombudsmen in the future.

It is expected that the Law on Special Pensions for Judges and Prosecutors will come into force on January 1, 2027.