The Bank of Latvia considers the idea of allowing residents to freely withdraw second-tier pension savings to be dangerous. According to the Vice President of the central bank, Santa Purgaile, this could lead to increased poverty among future pensioners and additional burdens on the state.
Discussions about the possibility of freely managing second-tier pension savings in Latvia must be conducted with extreme caution. This was stated by the Vice President of the Bank of Latvia, Santa Purgaile, during the broadcast of the program TV3 "900 seconds."
According to her, if people are allowed to withdraw and spend their pension savings before retirement, some residents may find themselves without sufficient income in old age in the future.
"We will find ourselves in a situation where people after retirement will simply be on the brink of poverty," Purgaile warned.
She reminded that Latvian society continues to age, and the first-tier pension alone — the state pension — will not be enough to maintain a usual standard of living after completing work.
This is why, according to Purgaile, the second-tier pension was created as an important part of the overall pension system.
The Vice President of the Bank of Latvia also referred to the experience of neighboring countries. According to her, in Lithuania and Estonia, after the easing of regulations, many residents did not invest the funds received but simply spent them.
What is important to understand is that the debate around the second-tier pension now concerns not only the freedom to manage one's own money but also the question of who will provide for people in old age if the savings are spent in advance.
The Bank of Latvia fears that this may lead to an increase in the number of pensioners needing additional state assistance in the future.
At the same time, Purgaile rejected the widespread criticism regarding the low profitability of pension savings.
According to her, changes have been made in the system over the past few years that have improved the performance of pension funds. In particular, management fees have been reduced, and the opportunities to invest part of the funds in more profitable assets have been expanded.
According to the Bank of Latvia, in 2025, the return on the second-tier pension in the country was the sixth highest among OECD countries.
"Right now, we really see very healthy returns. These levels are earning well," Purgaile stated.
She expressed confidence that in the future, second-tier pension savings will become a significant part of the income of Latvian pensioners.
Against the backdrop of ongoing discussions about the pension system, the question of the possibility of more free access to savings remains one of the most sensitive for both politicians and the residents themselves.
