Review of valorisation index of pension capital in Latvia

The ESPN Flash Reports are produced by the European Social Policy Network (ESPN) established in 2014 to provide the European Commission with independent information, analysis and expertise on social policies. The topics presented in the Flash Reports are identified by ESPN experts in the light of significant developments in their countries, or in some cases suggested by the Commission.

The ESPN is managed by LISER and APPLICA, with the support of OSE - European Social Observatory. For more information, please visit this website.
During the crisis, the valorisation coefficient included in the Latvian pension formula dropped drastically in the last 5 years. As a result, with social insurance contributions constant, pensioners who retired in 2012 were receiving a pension that was 25% lower than those who retired in 2009. Parliament adopted amendments to the Law on State Pensions, prescribing recalculation of all pensions granted in 2010-2015 and new rules for the valorisation index. These amendments have short- and long-term effects on the pension system.

Author: Feliciana Rajevska