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Disclaimer: The English language text below is provided by the Translation and Terminology Centre for information only; it confers no rights and imposes no obligations separate from those conferred or imposed by the legislation formally adopted and published. Only the latter is authentic. The original Latvian text uses masculine pronouns in the singular. The Translation and Terminology Centre uses the principle of gender-neutral language in its English translations. In addition, gender-specific Latvian nouns have been translated as gender-neutral terms, e.g. chairperson.

Republic of Latvia

Cabinet
Regulation No. 205
Adopted 27 March 2007

Procedures for the Calculation of the Insurance Contribution Wage Index and Updating of the Old-Age Pension Capital

Issued pursuant to Section 12, Paragraph one
of the Law On State Pensions

I. General Provisions

1. These Regulations prescribe the procedures by which:

1.1. an insurance contribution wage index to be applied for the updating of the old-age pension capital (hereinafter - capital index) shall be calculated; and

1.2. updating of the old-age pension capital shall be carried out in conformity with the changes of the wage subject to the insurance contributions in the country.

2. Each year the State Social Insurance Agency, on the basis of the information at the disposal thereof regarding the amount of wages subject to social insurance contributions at a specific time period, shall calculate the capital index, as well as shall carry out updating of the old-age pension capital accrued in the account of the insured person.

3. The capital index shall be published in the official newspaper "Latvijas Vēstnesis" [the Official Gazette of the Government of Latvia].

4. The capital index and the updated pension capital shall be expressed in up to four decimal places.

II. Calculation of the Capital Index

5. The capital index shall be calculated by using the following formula:

Iti = A(ti-1 1.aug.-ti 31.jūl.)
A(ti-2 1.aug.-ti-1 31.jūl.)

Iti - the capital index in year ti;

A(ti-1 1.aug.-ti 31.jūl.) - the amount of wages subject to social insurance contributions from 1 August of year ti-1 until 31 July of year ti ;

A(ti-2 1.aug.-ti-1 31.jūl.) - the amount of wages subject to social insurance contributions from 1 August of year ti-2 until 31 July of year ti-1 .

III. Updating of the Old-Age Pension Capital

6. The annual updating of the old-age pension capital in year ta shall be carried out by multiplying the pension capital accrued (updated) during the time period from 1996 until year ta-2 with the capital index determined for year ta-1.

7. The total updated pension capital that is applied for the granting of the old-age pension in year tp shall be made up by the pension capital updated according to the procedures specified in Paragraph 6 of these Regulations, the pension capital accrued in the previous and in the current year, as well as the updated initial pension capital. The total updated pension capital shall be calculated by using the following formula:

K = (((K1996 x I1997 + K1997) x I1998 + K1998) x I1999 + ... + Ktp-2) x Itp-1 + Ktp-1 + Ktp + Ks,

where

K - the total updated pension capital;

K1996, K1997, . . ., Ktp-2, Ktp-1, Ktp - the pension capital, accrued before granting the pension in each relevant calendar year (1996, 1997, . . ., tp-2, tp-1, tp), if the pension is granted in year tp;

Ks - the initial pension capital that has been calculated according to the procedures specified in Paragraph 13 of Transitional Provisions of the Law On State Pensions and that has been updated in conformity with Paragraph 8 of these Regulations;

I1997, I1998, . . ., Itp-1 - the capital index, which has been determined for a specific calendar year (1997, . . ., tp-1), if the pension is granted in year tp.

8. The initial capital of the old-age pension shall be updated, for the average yearly wage subject to insurance contributions that shall be taken into account when calculating the initial pension capital, applying the capital indexes that have been determined for the years that follow the year to be updated, until the year of granting the pension.

9. The total updated pension capital, calculated in Paragraph 7 of these Regulations, shall be supplemented with the funded pension capital that has been accrued in conformity with the Law On State Funded Pensions, if the insured person has expressed such a wish when requesting the old-age pension.

10. Recalculating the old-age pension in year tr regarding the additionally accrued pension capital after granting (recalculation of) the pension for the time period starting from year tr-n (n = 1, 2, 3, 4,....) up to year tr, the total updated pension capital shall be formed by the additionally accrued pension capital, updated according to the procedures specified in Paragraph 6 of these Regulations, as well as by the pension capital accrued in the previous year and in the current year. The total updated, additionally accrued pension capital shall be calculated by using the following formula:

K = (((Ktr-n x Itr-(n-1) + Ktr-(n-1)) x Itr-(n-2) + K tr-(n-2)) x Itr-(n-3) + ...+ Ktr-2) x Itr-1 + Ktr-1 + Ktr,

where

K - the total updated, additionally accrued pension capital;

Ktr-n, Ktr-(n-1), Ktr-(n-2), . . ., Ktr-2, Ktr-1, Ktr - the accrued pension capital, after granting (recalculation) the pension in each relevant calendar year (tr-n, tr-(n-1), tr-(n-2), ..., tr-2, tr-1, tr), if the pension is recalculated in year tr;

Itr-(n-1), Itr-(n-2), . . ., Itr-1 - the capital index that has been determined for the current calendar year (1997, . . . , tr-1), if the pension is recalculated in year tr.

Acting for the Prime Minister,
Minister for Defence A. Slakteris

Acting for the Minister for Welfare,
Minister for Education and Science B. Rivža


Translation © 2008 Tulkošanas un terminoloģijas centrs (Translation and Terminology Centre)

 
Document information
Title: Apdrošināšanas iemaksu algas indeksa aprēķināšanas un vecuma pensijas kapitāla aktualizācijas .. Status:
In force
in force
Issuer: Cabinet of Ministers Type: regulation Document number: 205Adoption: 27.03.2007.Entry into force: 31.03.2007.Publication: Latvijas Vēstnesis, 54, 30.03.2007.
Language:
LVEN
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