Pension assets in Lithuania are under threat of nationalisation, the chairman of the Lithuanian Pension Fund Member Association (LPFMA) has warned, as its parliament legislated a 25 per cent reduction in contributions to the second pillar.
LPFMA's chairman of the board, Marijus Kalesinskas, said that politicians in his country were informally entertaining similar ideas as in Hungary. "This is not yet the official position, but informally in the political discussions they are already referring to the Hungarian example as a good one and one to follow", he said.
Kalesinskas said it was still possible the court would rule the initial cut unconstitutional, necessitating a rebate from government, and noted one important change between Lithuania and Hungary – which next year will introduce a new constitution removing responsibility for fiscal oversight from its highest court's remit. “Importantly, I would say the big difference in our case compared to Hungary is that our country has a constitution that cannot be changed by parliament", he said.
The chairman estimated that up to €450 million in contributions had been lost since the initial reduction, but said that liberal politicians within the country's coalition government were coming to the realisation that the changes risked "crippling" the second pillar – launched in 2004 – and would only increase pension expenditure in future.
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