More than 500,000 people in Lithuania have withdrawn over three billion euros from the country's second-tier pension funds since the government opened a two-year window allowing participants to exit the scheme at the start of this year.
The figure, equivalent to roughly three percent of Lithuania's gross domestic product or six percent of annual disposable income, was disclosed by Gediminas Šimkus, governor of the Bank of Lithuania, on Wednesday.
Background
Lithuania operates a multi-tier pension system. The second tier, known as pension accumulation funds, allows workers to direct a portion of their social insurance contributions into privately managed investment funds, with the state topping up contributions.
Participation had been broadly encouraged for years as a way of building long-term retirement savings.
