Press Release: CEEC Forum 2024 – Where We Are and What’s on the Horizon: Directions and Challenges of Pension Systems in Central and Eastern Europe
Brussels, 19 September 2024 – The PensionsEurope CEEC Forum 2024, hosted by the Lithuanian Investment and Pension Funds Association (LIPFA), was held on 17 September 2024. This year’s event also marked the 20th anniversary of Lithuania’s funded pension system. Industry experts, European and Lithuanian policymakers, academics, and supervisors gathered to discuss the current landscape and future directions of pension systems in Central and Eastern Europe.
Welcoming Addresses:
- Tadas Gudaitis, Chair of LIPFA, opened the event by highlighting the success of Lithuania’s second-pillar pension system. He said: “Over the past two decades, Lithuania, like many others, has experienced growth, reforms, and transformation. Today, we can confidently say the pension accumulation system is delivering real benefits for Lithuanian employees—our future retirees. More than €8 billion has been accumulated in pension accounts, representing the largest investment by Lithuanian citizens outside of bank deposits.”
- Csaba Nagy, Chair of the CEEC Forum, reflected on the Forum’s journey since its first meeting in Bratislava in 2007 and complimented the progress made by countries like Romania, Croatia, and Bulgaria as they move into their pension payout phases.
- Matti Leppälä, CEO of PensionsEurope, expressed his enthusiasm for LIPFA’s return to PensionsEurope and stressed the importance of collaboration within the region.
- Martynas Šiurkus, Vice-Minister of Social Security and Labour, discussed the challenges Lithuania still faces, particularly the need to increase contribution levels in second-pillar pensions.
Presentation of the Lithuanian Pension System:
Simonas Krėpšta, Member of the Board of the Bank of Lithuania, provided an in-depth analysis of Lithuania’s pension system, focusing on challenges such as population decline, low replacement rates, and fiscal pressures on the first pillar. He presented potential solutions, including strengthening employer contributions to the second pillar and enhancing the underdeveloped third pillar.
The forum featured three sessions:
- Experiences and Challenges of Pension Accumulation Systems in the CEE Region: Experts from Lithuania, Croatia, Poland, and Estonia shared their experiences. A key takeaway was the importance of political stability and consistency in policies to build a strong pension system that gains the trust of its citizens. Important factors that will ensure higher replacement rates in the future include higher contribution rates, greater employer participation in pension accumulation defined contribution schemes, and broader coverage of the working population in pension accumulation programs. It appears that countries that have partly withdrawn from pension accumulation systems earlier and used funds earmarked for the future to address current needs, face significant challenges in restoring higher accumulation levels and potentially achieving higher replacement rates.
- The Future of Pension Systems in CEE Countries: Keynote speeches by Patrick Hoedjes from EIOPA and Valdis Zagorskis from the European Commission set the stage. Patrick Hoedjes emphasised the importance of multi-pillar systems, while Valdis Zagorskis presented findings from the Pension Adequacy Report, discussing the replacement rate levels and the large gender pension gap across Member States. A panel discussion followed, highlighting the role of pension funds for economic growth, and the need to allow pension funds to invest in more productive areas in some Member States.
- The Role of Employers in Pension Development in the CEE Region: This panel explored the varying levels of employer engagement in different countries. The low contribution levels of employers in Lithuania were discussed. Comparisons were made with Germany and the Netherlands, where employer contributions play a significant role. The discussion highlighted the importance of continuous dialogue between the government, employees, and employers to create a framework incentivising employers’ contributions to pension schemes.
In his closing remarks, Matti Leppälä emphasised that, regardless of the resilience of the system, increasing savings will be essential in the face of changing demographics in Europe. He insisted that while pension funds are managed at the national level, the European Union plays an important role. With the new European Commission mandate focusing on boosting growth and competitiveness, pension funds will unavoidably be part of the EU agenda.
The CEEC Forum 2024 reaffirmed the commitment of PensionsEurope and stakeholders in the CEE region to building robust, sustainable pension systems for future generations.
For more information, please contact Gabrielle Kolm, Policy and Communications Officer.
