Social Democrats: Raising retirement age to 70 not justified, more flexible solution needed
Former Minister of Social Protection and deputy chairman of the parliamentary group of the Social Democratic Party (SDE), Helmen Kütt, said on Wednesday that her party didn’t support the proposal of Minister of Social Protection Margus Tsahkna (IRL) to raise the retirement age to 70 by 2040.
Kütt said that the party saw no justification for such a drastic and rigid step. “People are different, and so are their wishes and abilities to work or retire. We should seriously consider a more flexible approach to retirement age, or the possibility of a so-called flexible retirement,” Kütt said. “If somebody feels at 65 that it is the right time for them to retire, they should have the opportunity. But if somebody wants to work part or full-time, this should also be made easy.”
Tsahkna presented a plan on Wednesday to raise the retirement age to 70 years by 2040, to unpeg the amount of pensions paid out of first pillar funds from wages, and to instead peg it to the number of years worked.
The proposal of the Ministry of Social Affairs is to raise the retirement age to 70 years by 2040 and to link it to life expectancy after that, so that when life expectancy increases the retirement age increases also.
If no changes to the system were made, the average old-age pension in Estonia would shrink to less than €300 a month in the future, the minister said.
Tsahkna will present proposals for changing the pension system in the cabinet meeting on Thursday.
The current retirement age for men and women in Estonia is 63 years.