Isamaa party leader Helir-Valdor Seeder says that getting rid of the second pillar of the Estonian pension system, what he called the “worst product in the world”, would bring far more benefits than losses. Opposition Reform Party MP Andres Sutt said that it would change very little in a positive way, and affect the most vulnerable in society most.

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Appearing on political discussion show Esimene stuudio Tuesday evening, moderated by Anna Pihl, the pair went head-to-head on the controversial move by the coalition government to make the second pillar, made up of employee pension contributions put into managed funds, voluntary, rather than mandatory.

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The policy was a central plank in Isamaa’s pre-election manifesto; proponents including Seeder argue that the current system is too rigid and inflexible, and performs below market rates. In this they line up against both the central bank, the Bank of Estonia, and the IMF, who both urge caution in removing the mandatory membership of the second pillar, while conceding the system can be improved.

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Seeder said that the scheme had been in place for 20 years (the mandatory requirement to contribute kicked in for most present-day earners in 2010-ed.) and was never popular. “People’s savings in the pillar are burning up. It is wise to trust people and believe in their sense of responsibility.

Practice has shown that an average person can certainly better invest and manage their money than various pension funds today, as analysis shows. In any case, it is more profitable for people today to confine themselves to the first pillar (employer contributions-ed.),” he said.

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