Deadline Passes for Raising Pension Payments ({{commentsTotal}})

Business
Business

The Finance Ministry counted 106,140 applications by the September 15 deadline for taking up a government offer to increase second tier pension copayments, reported ETV.

The number, which represents a sizable chunk of Estonia's 645,000-strong workforce, met forecast expectations. 

Facing a deep recession in 2009, the Estonian government froze state contributions to the second pillar of the three-pillar pension system from June 2009 to December 2010, and made only reduced contributions in 2011. Meanwhile, second-pillar pension holders had the right to continue making their copayments.

To make up for the losses incurred in the recession, the government is giving people the option of increasing both individual (from 2 to 3 percent) and state copayments (from 4 to 6 percent) for the four years from 2014 to 2017. Those who continued their payments during the recession were rewarded with automatically increased state contributions, with the option of raising their own payments as well.

Altogether, 209,000 people had continued making payments during the recession.

The government estimates that the first two mandatory pillars of the pension scheme will yield the equivalent of about half of a pensioner's work income, and that a person's pension should be 65 to 70 percent of previous income in order to maintain the established living standard.

The share of the 33-percent social tax allocated for pensions is 20 percent of the gross payroll.



{{c.alias}}
{{c.createdMoment}}
{{c.body}}
{{cc.alias}}
{{cc.createdMoment}}
+{{cc.replyToName}} {{cc.body}}
No comments yet.
Logged in as {{user.alias}}. Log out
Login failed

Register user/reset password

Name needs to be fewer than 32 characters long
Comment needs to be fewer than 600 characters long
{{comment.captcha.word.answer}}

news.err.ee

Opinion
Independence Day: Estonia’s way into the future isn’t a race

There is a lack of connection between the Estonian state, and the people who live here. While it expects a lot of the state, Estonian society doesn’t seem ready to contribute, writes Viktor Trasberg.

Lotman: Security academy would be crucial Estonian identity point in Narva

In an opinion piece published by Eesti Päevaleht, Tallinn University professor Mihhail Lotman found it important to overcome the mental barrier separating Ida-Viru County from the rest of Estonia.