Sustainability of the Public Finance System Via Optimization of Strategic Management

Abstract

Driven by sustainability and knowledge-based principles, the public policy at all levels requires innovative ways of strategic management, which in many countries, particularly those that are trying to catch up to better-developed economies, is still chaotic and unstable. Having the theoretical background of innovative development of public finances and the concept of sustainability in finances revealed in the first chapters of the present publication, it continues with the overview of the pension system in Lithuania. Finally, the theoretical aspects of the pension reform in Lithuania, through proposed precise quantitative methods of valuating reform, are supported. The aim of the present article is to propose the model of optimizing the strategic management of the public finance system via calculating the contributions from the income that changes wages and salaries, modifications in strategies for the investment of accumulated funds in pension funds as well as the increase in the level of pension contributions.