Residents of Latvia often do not understand how their pension savings work, and therefore do not trust the second pension level system. This was stated by the rector of the University of Latvia, Gundars Berziņš, who suggested giving people more control over their own pension funds.
The issue of the second pension level in Latvia is directly related to public trust in the pension system. This opinion was expressed in the podcast tv3.lv "Piķis un ģēvelis!" by the rector of the University of Latvia, Gundars Berziņš.
According to him, many residents currently have a poor understanding of how their pension savings work and how the funds are invested.
"A system needs to be created in which people would be interested in investing in the second pension level," Berziņš noted.
He believes that one of the main problems remains the feeling of injustice. According to part of society, similar pension funds in other countries yield higher returns than in Latvia.
As an example, Berziņš mentioned Estonia, where the topic of pension savings has long been a subject of broad public discussion.
Currently, the second pension level in Latvia is a mandatory accumulation system, into which a portion of workers' social contributions is directed. These funds are invested through pension funds, and the accumulated capital is to be used after a person retires.
However, for many residents, the system remains too complex and opaque.
Berziņš believes that the situation can be changed by providing people with more opportunities to make their own decisions about their savings.
As an example, he cited the United States, where people can partially withdraw their pension savings after reaching a certain age. However, earlier use of the funds is subject to higher taxes.
According to the rector, this approach motivates people to pay more attention to their own savings and to participate more actively in managing them.
He also considers it important to encourage residents to save larger amounts for retirement.
In recent years, the topic of the pension system has regularly sparked discussions in Latvia — especially against the backdrop of an aging population, rising state expenditures, and residents' concerns about the future size of pensions.
For many, the issue of trust in pension savings remains sensitive also because investment results directly affect the future standard of living after retirement.
According to Berziņš, without greater trust and understanding of how the pension system works, residents will not begin to perceive the second pension level as their real savings.
