SOCIAL SECURITY ISSUES: II PILLAR PENSION FUNDS‘PERFORMANCE IN LITHUANIA

Abstract

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.