The imperfections of old-age pension insurance in Lithuania and possible solutions

Boguslavas Gruževskis, Algirdas Bartkus


The latest crisis in the Lithuanian social insurance system began in the fourth quarter of 2008. The system that had been fully and successfully functioning since 2002 again entered a recession phase. The decline promoted a public debate on the measures necessary for preventing similar events in the future. The authors of the present article analyse and discuss the major external threats, shocks and disturbances that caused the failures of the social insurance system in 2008 and 2009. The article concludes with a suggestion for ensuring long-term financial sustainability of the old-age pension system and for solving the population decline problem. The paper proposes a mixed pension-funding principle, the novelty of which lies in the direct contribution of children to their parents’ pensions.


old-age pension insurance; population ageing; labour force migration; economic value of children

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"Social Work" ISSN online 2029-2775 / ISSN print 1648-4789