Novickytė, Lina

Since demographic problems have appeared, the pension system’s transformation has become an extremely relevant issue in terms of dealing with country’s social security problems. Development of medicine and a better quality of life have caused population aging which is particularly noticed in the developed countries. The problem of an aging population has encouraged scientists and practitioners to actively discuss the issue of social security. Particularly, the importance of a changing pension system has become a concern in regards of ensuring the public welfare. Therefore, the article analyses the sustainability of Lithuania II pillar pension funds using multi-criteria methods. The carried out research has enabled the evaluation and comparison of II pillar pension funds and their performance. The use of multi-criteria methods combining a few funds’ actions defining indicators into a whole have helped to evaluate the pension funds. In addition, it has helped to identify the funds’ operational sustainability and to choose the best fund, emphasizing the most important aspects for each member and shaping the weights of multi-criteria methods’ evaluation. It is important to emphasize that the aspect of reward indicator is significant in the asset accumulation in pension funds because the goal of these funds is to accumulate the biggest amount of asset for the future pension in a long period and not just to protect the money from its depreciation. Finally, it is worth mentioning that this type of a research provides a new perspective on the pension funds’ evaluation in the context of other criteria.

The government, in order to achieve the welfare of the citizens in the retirement age to keep pace with the working people, carried out the various pension systems transformations. The working people’s welfare is growing due to the economic progress, so there is a theory of economics, which examines the existing income redistribution in time. It should be noted that in order to ensure the financial well-being in old age it is necessary to efficiently allocate the scarce resources. In Lithuania, the existing three pillar pension system allows each employee to contribute to their own financial well-being in the future. This article aims to assess the second pillar pension fund performance and how fund differences affect the amount of old age pension. The analysis made it possible to determine the correlation between the return generated by the fund and the number of participants in the fund; the spreadsheet is provided, which allows estimating the influence of the choice of different funds on the size of the retirement pension. It was found that fund return and the number of participants in the fund have a negative correlation. This shows that the part of households who raise money in fund with the lowest return will be much poorer, and the corresponding result is a smaller pension. It may be noted that the accumulation of different pension fund reserves have a significant impact on the future pension size (this difference can be as high as 230%).