President signs pension, social insurance reform into law

Dalia Grybauskaitė
Reuters-Scanpix

“The president signed another 18 laws,” her spokeswoman Daiva Ulbinaitė said on Friday. In her words, signing of the laws completed the analysis of the laws of the social model.

The laws envisage revising the formula of how retirement pensions will be calculated, setting out clear rules to index pensions to economic growth, and extending the mandatory length employment to 35 years before one can retire.

The Sodra reform envisages capping social security contributions: 120 average monthly wages in 2017 (average monthly wages stood at €748 in the first quarter of 2016) and 60 average monthly wages in 2022. The cap currently does not apply to Sodra contributions, just to benefits.

In 2017, the share of employer payments to Sodra will be cut by 1%.

The president has earlier vetoed the new Labour Code, another crucial part of the social model. The ruling coalition said that the plans to hold the extraordinary Seimas session would depend on the president’s choice to veto other laws of the social model.

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