The beginning of pension reform: March 1995 and Māris Gailis' vision
Thirty years ago, the Saeima started discussing pension reform to break away from the Soviet legacy. Prime Minister Gailis called for splitting the social tax and changing payment proportions.
On March 1, 1995, the first item on the Saeima's extraordinary session agenda was the pension reform concept – a plan to fundamentally change the system inherited from Soviet times. Then-Prime Minister Māris Gailis emphasized that the previous government had carried out significant reforms but had delayed the social sphere, making it a priority. He stated that it was the last moment to stop debating and implement the reform based on common principles. Gailis proposed splitting the social tax into specific insurance categories – pensions, benefits, unemployment insurance – so that everyone would know how much they pay and for what. He also called for changing the proportions of social tax payments between employers and employees. These remarks marked the beginning of one of the most ambitious and complex reforms in the history of restored Latvia. The reform aimed to transition from the old solidarity-based system to a three-tier model, allowing for targeted growth of pensions. Although more than 30 years have passed, the improvement of the pension system continues.
