Bērziņš: Foreign nationalisation debates do not threaten Latvia's second-pillar pension savings

Reports of possible real estate nationalisation in Berlin, the German capital, and Madrid, the Spanish capital, have raised questions about whether similar decisions could also threaten the second-pillar pension savings of Latvian residents. Andris Bērziņš, chair of the Saeima's Social and Employment Matters Committee and a member of the Union of Greens and Farmers (ZZS), said on 12 October on the TV24 programme "Uz līnijas" that such concerns are unfounded.

The second pillar is the part of Latvia's state pension system in which residents' pension capital is invested in financial instruments. Bērziņš noted that about 11 billion euros are currently accumulated there. The money is invested to increase its value over the long term and to provide people with larger pensions in the future.

Contacts with the authorities

The lawmaker said that after reading the news he contacted the responsible institutions, including Latvijas Banka, the central bank of Latvia, to find out whether events in Germany and Spain could affect Latvian funds. Based on the information he received, he concluded that these developments are not directly connected to Latvian residents' pension savings.

Oversight

Bērziņš stated that Latvijas Banka supervises the activities of pension fund managers and monitors how residents' savings are invested. According to him, the aim of supervision is to prevent unjustifiably risky investments and to protect the interests of second-pillar participants.

He also stressed that discussions about property nationalisation abroad do not in themselves mean that such a scenario could be applied to Latvia's pension system. In his view, it is important to separate foreign political debates about the housing market from investments made within Latvia's second pension pillar.