This is the State social security system through which individuals are insured or insure themselves for a State pension. State pension contributions are paid to SoDra by both the employer (23.3% – from 1 July 2017: 22.3%) and the employee (3%), and SoDra makes pension payments from these contributions. Pension insurance (self-insurance) over a particular period of time gives individuals entitlement to a state social insurance old-age pension. Those who are insured for a full old-age pension and who have not yet reached pension age may invest a portion of their state social insurance contributions (2%) in a pension fund. That is to say, they may participate in pension cumulation through a pension fund.
In such cases, individuals need to make an additional contribution from their own earnings (2% of insured income) to a chose pension fund. Additionally, a fixed contribution will be paid into the fund from the State Budget (this amounts to 2% of the average earnings before tax of the average wage of workers over four quarters, based on data published by the Lithuanian Department of Statistics). Once a pension fund scheme has been set up, individuals are not allowed to withdraw from it before reaching pension age.
These are additional voluntary contributions to a pension fund or participation in a life assurance scheme. Anyone may participate, including those who do not make payments to SoDra and who do not participate in Tiers I and II.
Social assistance pensions are payable to those who are not entitled to social insurance old age pensions or for whom such pensions would be very small.
© European Union, 1995-2017