The old-age pension is one of those questions that sooner or later starts to interest almost everyone: what will it be like, when can it be received, and what does its amount depend on? However, the pension system seems complicated to many because the calculation takes into account work experience, social contributions made, pension capital, and the order established by the state.
This time, Margarita wrote to LA.LV with the following question:
"I would like to ask for clarification on how the old-age pension is calculated. I have little time left until retirement age, so I have started to wonder how the amount of my pension will be determined. I have worked almost my entire life, but the years of work have been very different — there have been official employment, periods of part-time work, as well as times in the nineties when incomes were irregular and it was not always clear whether any social contributions were being made at all.
I am concerned whether all periods of work will be taken into account and whether it might turn out that I have actually worked many years, but my pension will still be unexpectedly small. I also do not quite understand if it is possible to know in advance the approximate amount of my future pension and to check whether the State Social Insurance Agency (VSAA) has complete information about my work experience.
I would like to understand: how can a person before retirement ensure that their work experience and social contributions are accounted for correctly? Where should one turn if there is a suspicion that the data for a certain period may be incomplete? And can the VSAA provide a preliminary calculation of the future pension?"
The response was given by the press secretary of the State Social Insurance Agency, Iveta Dainé:
"The old-age pension is calculated individually for each person, taking into account the accumulated insurance experience, mandatory social contributions made, the updated pension capital, as well as the retirement age, since the calculation also uses the expected life expectancy for the corresponding age.
Insurance experience before December 31, 1995, must be confirmed by the individual, providing documents to the VSAA — for example, a work book, an archival certificate, or educational documents confirming education after obtaining secondary education, etc. Periods of work and equivalent periods before December 31, 1990, are counted in the insurance experience regardless of the payment of social contributions.
On the other hand, from January 1, 1991, to December 31, 1995, the insurance experience is formed by periods for which contributions were made or should have been made. A period of work is counted if the person was an employee and the employer was registered as a social contribution payer. For the self-employed, only those periods for which contributions were actually paid are taken into account.
From January 1, 1996, all data on social contributions are stored in the VSAA information system, and the insurance experience is formed by those months for which contributions were made or should have been made. If there were no incomes in any month, that month is not included in the insurance experience. Until December 31, 2010, the experience could also be formed by periods when incomes were reported, but social contributions were not actually paid. And starting from January 1, 2011, only those periods for which contributions were actually made are counted.
To ensure that the information about the insurance experience in the possession of the VSAA is complete, this can be checked on the portal Latvija.gov.lv, using the electronic service "Information and Services of the VSAA." With its help, one can obtain a certificate "Information about registered work experience before 1996," if the relevant documents have already been submitted to the VSAA. If it turns out that the information is incomplete, additional documents can be submitted in advance — even before applying for a pension.
Data on contributions after 1996 are available in the certificate "Information about social contributions and insurance periods." Information about the expected amount of the pension can be obtained in the "Forecasts and Calculators" section of the same electronic service.
If there are no more than five years left until retirement age and the necessary insurance experience has been accumulated, one can obtain a certificate of the projected amount of the old-age pension. A pension calculator is also available before the pension is assigned.
It should be noted that any pension amount forecast is purely informational, and the final amount is determined only at the time of pension assignment when the VSAA has all the actual and legal data related to the specific pension.
For the necessary information, one can contact the VSAA client center in person or submit a request electronically, signing it with a secure electronic signature. More detailed information about the assignment and payment of the old-age pension is available on the VSAA website.
