Bank of Lithuania
An Ex-Ante Assessment of the Proposal to Reform the Second Pillar of the Lithuanian Pension System
2025-04-14

An Ex-Ante Assessment of the Proposal to Reform the Second Pillar of the Lithuanian Pension System

An Ex-Ante Assessment of the Proposal to Reform the Second Pillar of the Lithuanian Pension System
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This document offers an ex-ante assessment of the proposal to allow the withdrawal of funds from the second pillar of the Lithuanian pension system. First, we use a quantitative macroeconomic model to quantify, under alternative scenarios, the potential impact that the withdrawal of Pillar II funds might have on the economy in the medium term. Second, we offer a long-term view of the current pension replacement rates and the consequences that the withdrawal of funds might have for those individuals who decide to opt-out of Pillar II.