Lithuanian government rejects president’s pension increase proposal

The Lithuanian government has chosen a different approach to raising pensions than the one proposed by President Gitanas Nausėda, Prime Minister Ingrida Ruginienė said in an interview with national broadcaster LRT on Sunday.

With over half a million people withdrawing accumulated funds from private pension accounts, the state social insurance budget Sodra has seen its reserves swell by more than €1 billion, reaching a record high of over €6 billion. Yet despite the surplus, the average pension in Lithuania remains around €750, with many retirees facing financial hardship.

Last autumn, Nausėda urged the government to allocate 20–75% of Sodra’s excess funds to immediately increase pensions, arguing that the reserve could be replenished more slowly. However, nearly nine months later, the cabinet has yet to adopt his proposal.

Social Security Minister Jūratė Zailskienė acknowledged the need for higher pensions but stated that her ministry was still evaluating options, with potential changes not expected before 2027. “We agree pensions must rise using this year’s surplus, but we’re assessing all possible measures—pension units, total funds, and what can be done,” she told LRT.

Finance Minister Kristupas Vaitiekūnas dismissed the president’s plan as incomplete, noting that while it outlined spending, it lacked proposals on how to offset the costs. “When you suggest adding something, you must also say where the money will come from,” he said. The government currently plans to use about 11% of Sodra’s surplus for pension increases—far below Nausėda’s recommendation.

Ruginienė defended the cabinet’s approach, calling it “more precise, targeted, and the best available option” compared to the president’s proposal. Presidential adviser Vaidas Augustinavičius accused the government of “dragging its feet,” comparing its inaction to that of past conservative administrations.

Opposition MP Linas Kukuraitis argued that the Sodra reserve—projected to grow by another €900 million next year—could be tapped without violating fiscal rules, as the funds could be reallocated to cover current expenses like defence or social priorities. “The government’s job is to rebalance budgets. If the reserve grows by €900 million, the state could borrow the same amount for other needs without breaking borrowing limits,” he said.

Officials stressed that the Sodra reserve itself would remain untouched, as it serves as a crisis buffer to avoid repeat scenarios like the 2009 pension cuts imposed during the global financial downturn. Discussions focus solely on slowing its replenishment rate.