Voluntary pension funds contribution in the pension system of Latvia in comparison with Estonia and Lithuania
Pension system formation is one of the questions on the daily agenda for most countries of the world. Most attention and discussion focus on the first two pension system pillars – state compulsory unfunded pension scheme and the state-funded or accumulated pension scheme in pension funds, both based on mandatory contributions. Private voluntary investments are the “third pillar” of pension systems and the gear to ensure an adequate level of income at retirement age by creating private pension funds. Voluntary savings are becoming the source of retirement income received on a monthly basis in line with the progress of private pension funds and expansion of the choice of pension schemes. This…
Financial Literacy Self-Evaluation of Young People in Latvia
Regular and proportionate voluntary savings in private pension funds can become an important part of oldage pensions. However, this can happen if the savings are made for a long period of time. This justifies the target group of the 3rd pension level, which are young people who have started to receive a regular income from their professional activity. One of the most discussed issues in promoting voluntary pension savings is the level of financial literacy. In addition to other motivating factors, such as financial incentives, the level of knowledge of the population about the opportunities to participate in the third pillar of pensions makes them want to build up voluntary savings. Effecti…
Voluntary Private Investments Role in Pension System in Latvia
Pension systems have become one of the main priorities for the national governments. Developed countries population is getting older by putting the pressure on the state budgets and work age people tax load. The current pension system in Latvia performs according to regulation of state compulsory unfunded pension scheme since 1996 and regulation of the state funded or accumulated pension scheme since 2001. The third pension system pillar is private voluntary pension schemes realized in form of people contributions into pension funds and life insurance policies. Aim of the research – deeper analyses of voluntary private investments as the pension system part and its development challenges in…
CHOICE ARCHITECTURE AS A BASIS FOR PENSION SAVINGS DECISIONS
The research was supported by the NATIONAL RESEARCH PROGRAMME “LATVIAN HERITAGE AND FUTURE CHALLENGES FOR THE SUSTAINABILITY OF THE STATE” project “CHALLENGES FOR THE LATVIAN STATE AND SOCIETY AND THE SOLUTIONS IN INTERNATIONAL CONTEXT" (INTERFRAME-LV, Project No.VPP-IZM-2018/1-0005).
Sales Channels and Media Digitalization Impact on People Voluntary Savings for Retirement
Due to the implementation of new technologies and orientation on digital solutions the communication and sales channels have changed dramatically. Information and client service on-line availability presents strong advantages for business, state agencies as well as customers. However, lack of personal interaction during the communication and sales process can make it difficult for people to understand and even frustrate their desire for a product or service. The purpose of the research is to analyse the digitalization impact on voluntary savings for retirement in Latvia and make comparisons with other countries. The voluntary pension schemes are the part of pension system and its third pill…
Tax Incentives as a Part of Governments’ Applied Mechanisms for the Third Pension Pillar in Estonia, Latvia, and Lithuania
The main objective of the improvements to public pension systems is to create a balanced three-pillar pension structure and increase public accountability for pension capital formation. Most pension systems are based on the first two pension system pillars – mandatory contributions in the state compulsory unfunded pension scheme and the state-funded or accumulated pension scheme in pension funds. However, the pension level adequacy has been reached by adding the third pension system pillar - voluntary investments in private pension funds. Governments are private pension system policymakers by defining a legal framework and providing tax incentives for voluntary investments for retirement. I…
Market Environment Factors Influence on Development of Bancassurance in Latvia
Banks and insurers as part of financial service industry engage in partnership under the concept of Bancassurance. Several studies are done on this topic, focusing on economies of scale and performance of most Bancassurance common models. The purpose of this study is to identify the key market environment factors that influence the development of Bancassurance for retail banks in Latvia and the level of increase. Aim of this research is to analyse – how market environment factors influence the development of Bancassurance in Latvia. The current paper is focused on the Latvian market where several Bancassurance models are present as we test our propositions by interviewing management represe…