Arturs Miezis, Managing Partner at Hanseatic Alternative Investments, provided expert insights into Latvia’s pension system in a recent article on Delfi.lv, titled “Spoži pasaules mērogā, nabadzīgi mājās: Latvijas pensiju sistēmas briestošā katastrofa.”
In the article, Miezis highlights the long-term consequences of historical policy decisions, particularly the reduction of the second pension pillar contribution rate from 8% to 2% in 2010. He notes:
“The reduction of the second-pillar contribution rate from 8% to 2% in 2010, even for just one year, has had massive long-term consequences. At that time, financial markets were at their lowest point, creating an ideal opportunity to purchase financial assets at significantly reduced prices. Had 8% of salaries been invested in the second pillar, the profit potential would have been enormous.”
Miezis estimates that this missed opportunity equates to approximately €1.5 billion in unrealized earnings today, based on an average annual return of 2.8%. He adds: “This amount would have been earned had those contributions not been reduced.”
The article also addresses the broader challenges and systemic risks facing Latvia’s pension system and underscores the importance of forward-thinking strategies to secure the financial future of its citizens.
To read the full article and learn more about the current state of Latvia’s pension system, visit https://www.delfi.lv/bizness/37293360/bankas_un_finanses/120050528/spozi-pasaules-meroga-nabadzigi-majas-latvijas-pensiju-sistemas-briestosa-katastrofa