Managers of pension plans in other European countries are also thinking about this. For example, in Estonia, "second level" or "level 2" pension savings can be withdrawn in parts and kept in the capital markets for a longer period of time in order to earn more in the long term. On the other hand, Latvian residents' interest in pension savings is still small.
Atis Krūmiņš, the head of Luminor bank's asset management and pensions department in the Baltics, said that level 2 pension capital is invested in the global financial markets, which are volatile, but he assessed last year as exceptional.
"The differences between the different strategies were basically very minimal last year. Both the so-called conservative plans and the more aggressive plans saw an equal decline. This year, the most active plans that have more stocks are up about 10-12%. In conservative plans dominated by promissory notes, the increase is lower - 2, 3, maybe 4%. If the European Central Bank, for example, starts reducing its rates, then these conservative plans will certainly recover faster," explained Krūmiņš.
Not much interest
According to the data of the State Social Insurance Agency, last year the average old-age pension in Latvia was 530 euros gross, with almost 43% of pensioners on such a pension. The pension of 6,000 inhabitants exceeds 1,500 euros per month, however, in general, public interest in pensions is not high.
The financial manager of the "Indexo" financial services company, Artūrs Roze, assessed that citizens save less because they choose inadequate pension plans.
"If we talk about what is happening to the financial markets in general, then we should not worry anyway, because it is preferable not to make long-term decisions due to short-term fluctuations.
Because the financial market has always fluctuated, it will continue to do so in the future. Over 15, 20, 30 years, global stock markets and also bond markets have shown positive results, which are usually even 7-8% per year," Roze explained.
"If you are 30 years old, it is likely that at the moment the second pension level is three, four, maybe five thousand euros saved, but by the time you reach retirement age, you will probably save about 50-70 thousand in the second pension level."
Atis Krūmiņš, said that changes to the Law on State-funded Pensions will come into effect on July 1 next year. Therefore, with the bank, customers will be able to see their pension level 2 savings in the internet bank and asset managers will have the opportunity to inform about more appropriate options.
Currently, two thirds of the Latvian population are believed to have inadequate pension provision.
"Calculations show that if a young person enters the pension system, he has about 40 years or even more until retirement age, and, if during this time most of the time is spent in the wrong pension plan, then the difference in the accumulated capital can be as much as two to three times. This is one of those issues that everyone should decide for themselves right now, check whether they are in the right pension plan according to their age," Krūmiņš suggested.
Capital must be accessible
The co-chair of the Capital Market Committee of the Financial Industry Association, Kristīne Lomanovska, said that also in Latvia, as in Estonia, citizens should be allowed to withdraw their 2nd level pension capital in parts.
"The most important thing is not to force a person to necessarily fix his capital at that moment when he retires. Because there is a sufficiently high probability that at that moment there will be a crisis that can certainly be passed over, survived and the amount of capital returned to the previous level, and there is no solution, for example, there was also a proposal – five years earlier. Then we simply shift that time period five years earlier, but the problem remains the same. We cannot predict when the market will be up and when the market will be down," Lomanovska explained.
Members of the public can view their pension savings on the "latvija.lv" portal, while the profitability of their pension plan over the last six months or longer can be found on the "manapensija.lv" website.
