Measly Returns Spark $5 Billion Raid on Estonian Pension Savings
Cracking open a 4.85 billion-euro ($5.3 billion) piggy bank of pension savings may be a vote-winner. But Estonia’s plan to allow early access to retirement cash is facing a tide of criticism for being short-sighted.
The government is meeting an election pledge by a junior coalition member to let more than half the Baltic nation’s 1.3 million residents reinvest or spend mandatory pension savings taken from tax contributions and gross salaries since 2002.
The money would be released from September 2021 under draft legislation to be passed Wednesday, though President Kersti Kaljulaid objects and may seek a ruling from the Supreme Court, according to local media.
“We’ll force financial institutions to compete more in offering products and we’ll give people more options to create financial security for retirement age,” Finance Minister Martin Helme said this week.
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