January 2022
11Jan

Estonia. State to provide option of increasing second pension pillar deposits

The Ministry of Finance has drawn up an intention to allow people to voluntarily increase their second pension pillar deposits to 4 percent or 6 percent from the current 2 percent. The draft is currently on a coordination round. Since the creation of the mandatory funded pension system, the rate of payment for the second pillar has always been 2 percent of a working person's gross salary, but the finance ministry is planning amendments to the Funded Pensions Act, which...

January 11, 2022
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October 2020

22Oct

Estonia. Central bank chief: Pension reform will reduce public contribution to funds

Bank of Estonia chief Madis Müller says that many people in Estonia lack the ability or discipline to save, meaning the pension reform given the go-ahead by the Supreme Court on Tuesday will lead to both reduced pension pots and potentially higher taxation. "When the pension reform enters effect, people will be able to freely leave or join in the new year," Müller, who had opposed the reform bill when it passed the Riigikogu, told ETV news show "Aktuaalne kaamera" (AK)...

October 22, 2020
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February 2020

05Feb

Estonia. President not to hold further legal assessment of pension reform bill

President Kersti Kaljulaid is not planning to commission a legal assessment on the government bill to reform the Estonian pensions system, which passed the Riigikogu on January 29. "Over recent months, various parties have been conducting analyses on pension reform, and we do not plan to add to that," the president's communications officer Taavi Linnamäe told ERR. This did not mean the president would not be thoroughly examining the bill, which makes employee contributions to the so-called second pillar of...

February 5, 2020
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January 2020

31Jan

Estonian pension reform passes

The Riigikogu has passed the controversial pension reform bill, by 56 votes in favor to 45 against, making membership of the so-called second pillar of the Estonian pension scheme voluntary, also passing the vote of confidence it attached to the bill. Read also Estonia. Reform leader: We’ll use every means possible to halt pension reform mess The Compulsory Funded Pension Reform Act, to give it its full title, once it comes into effect, will make membership of the so-called second...

January 31, 2020
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30Jan

Estonia. Reform leader: We’ll use every means possible to halt pension reform mess

Reform Party leader Kaja Kallas says that the large number of proposed amends opposition parties made to the coalition's pensions reform bill to be vote on today were needed, given its huge socio-economic impact, and that she and her party intend to fight the bill every step of the way. "What worries them most is the pension system being dismantled in the way it is," Kallas said, speaking on ETV politics discussion show "Esimene stuudio" Tuesday night. "The experts...

January 30, 2020
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29Jan

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...

January 29, 2020
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December 2019

17Dec

Estonia: use robust growth to improve income equality and well-being

Estonia’s economy is performing well, and public finances are in excellent shape, yet growth is softening and spending pressures from infrastructure needs and an ageing population are mounting. Efforts should now focus on improving income equality and well-being, greening growth and accelerating the country’s digital transformation, according to a new OECD report. The latest OECD Economic Survey of Estonia notes Estonia’s expertise in information technology and its global head start in digitalising government services. Estonia now needs to accelerate...

December 17, 2019
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November 2019

11Nov

Bank of Estonia: Pension reform to bring pressure for tax increase with it

The Bank of Estonia recommends not making the second pillar of Estonia's pension system voluntary, as that may result in lower old-age pensions in the future and bring pressure to raise taxes in the future with it. The Ministry of Finance sent the pension reform bill that would make the second pillar optional for an interministerial round of approvals last Wednesday. Earlier this fall, the Bank of Estonia drew up an impact analysis of changes to the system of...

November 11, 2019
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08Nov

Estonia. Social affairs minister: Limit second pillar voluntary withdrawals

The Ministry of Social Affairs has proposed the Ministry of Finance amend its pension reform bill to limit the amount of money which can be withdrawn from the so-called second pillar fund. The draft bill was issued last Wednesday, with interested parties given a week to submit feedback, comments, suggestions etc. by midnight this Wednesday, Nov. 6. The social affairs ministry, a key player and part of the same coalition government, had not submitted its comments as of Wednesday...

November 8, 2019
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07Nov

Estonia. Second pillar pension reform continues to divide politicians

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. Read also Estonia. Social affairs minister: Limit second pillar voluntary withdrawals Appearing on political discussion show Esimene stuudio Tuesday evening, moderated...

November 7, 2019
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