The two opposition parties intend to deliver greater flexibility when it comes to using one's accumulated assets in retirement, as well as allow the needs-based use of these assets in specific cases in the saving phase as well, spokespeople for the Riigikogu said.

The bill also seeks to grant people the opportunity to increase contributions to their mandatory funded pension as well as promote long-term saving through a supporting tax regime.

It is said in the bill's explanatory letter that saving up more for retirement during one's employment years results in higher replacement rates and helps reduce poverty risks without requiring any additional hikes in taxation or the retirement age.

The current payout system, which effectively only allows one to withdraw savings via a pension insurance contract, is too rigid, the letter notes. Changes in the pension system affect all residents of Estonia, entail long-term effects on people's financial conduct and investments in the Estonian economy, and affect people's trust in their state. It is for these reasons that changes in the system must be carefully considered and implemented without haste and by involving various interest groups.

The Finance Committee of the Riigikogu was appointed as the lead committee on the bill.

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