Long-service pensions under debate

Early 'long-service' pensions for workers in dangerous occupations, or jobs where work performance depends heavily on age and health, were largely abolished in Latvia in the mid-1990s. However, in February 2004, parliament supported at first reading draft legislation that would reintroduce long-service pensions for performing artists employed by the state. This has raised the issue of re-establishing long-service pensions more widely - for example, the LDzA rail workers' trade union has suggested such pensions for train drivers.

Before pension reforms undertaken in the mid-1990s, 'long-service pensions' were a feature of Latvia's state-financed pension system. The system provided for a lower retirement age in occupations where: working conditions were dangerous for health (high stress, or exposure to various physical risk factors, such as dangerous substances, fumes and noise etc); ability to work in the occupation depended on age (musicians, dancers etc); or the occupation or work position was recognised as having special merit. The number of people awarded long-service pensions was 1,200 in 1990 and 7,200 in 1993. Long-service pensions constitute about 3% of total pension expenditure.

A new three-tier pension system, based on principles of insurance and equality, came into force on 1 January 1996. The new system restricted the availability of long-service pensions to a number of public sector occupations, such as civil servants at the Ministry of Internal Affairs (Iekšlietu ministrija, IeM), public prosecutors and civil servants at the Constitutional Protection Bureau (Satversmes aizsardzības birojs, SAB).

The abolition of long-service pensions under the general pension scheme was criticised by many of those concerned. Many occupations where work activity depends on workers' state of health received less favourable conditions. The situation became especially problematic in in cultural institutions, where performing artists often cannot continue their professional activity until retirement age, but there are few other jobs to which they can be allocated. The new pension scheme provided that performing artists were eligible for long-service pensions up until 1999, but have been covered by the general pensions legislation since then. The retirement age is thus now 62 years for male performing artists and 59.5 years for female artists .

In February 2004, the parliament (Saeima) supported at first reading the draft of a legislative act submitted by one of the main opposition political parties, the People’s Party (Tautas Partija, TP), which re-establishes long-service pensions for performing artists. Performing artists employed by state and local government professional orchestras, choirs and theatres would be eligible for long-service pensions, worth half of their average monthly salary during the last five years of employment. Ballet-dancers would be eligible for long-service pensions after 18 years' service, soloists in orchestras and choirs after 20 years's service, orchestra members and puppeteers after 25 years' service, and actors after 30 years' service.

Pensions would be paid from the budget of the Ministry of Culture (Kultūras ministrija, KM). About 50 artists would be eligible for long-service pensions in 2005, at an average level of LVL 50 (EUR 75) per month. The planned long-service pension would thus be lower than national average old-age pension (LVL 64.38 a month at end of the third quarter of 2003), and represent a quarter of the national average monthly wage, or about 60% of the 'survival minimum'.

Organisations representing performing artists have welcomed the idea behind the draft legislation. Lolita Cauka, head of the Union of the Theatre workers (Latvijas Teātra Darbinieku savienība, LTDS), said that many artists have to end their professional activities due to age, and it is then too late to requalify for another occupation. Long-service pensions would help these workers to deal with am economically and emotionally difficult period in their lives. The state institutions are more critical. The Ministry of Culture supports the idea but argues that the Ministry should not be responsible for the administration of the pensions. The Ministry of Finance argues that there are other professions and occupations that could be qualified for long-service pensions. Indeed, the Railway Workers' Trade Union (Latvijas Dzelzceļnieku arodbiedrība, LDzA) has raised questions about long-service pensions for train drivers. The same applies to all areas of transport, where not only professional skills but also the state of health are important. At the moment there are no proposals or solutions on extending long-service pensions to such groups, but it seems clear that the problem is becoming urgent.