Paper: Pension funds had best year ever

Second pillar pension reform will make membership of the fund optional. Source:

While 2019 is likely to go down as the year in which the government dismantled the Estonian pensions system, pension funds have performed better than ever, according to daily Postimees.

Making the so-called second pillar of the pension system, meaning employee contributions, optional, rather than mandatory as it had been for most wage earners, was a central plank of the Isamaa party's pre-election manifesto. After managing to get the policy into the coalition agreement, the bill to carry this out passed its first reading at the Riigikogu in early December.

One of the arguments put forward in favor of the reform was that pension funds often performed behind the market average, and so wage earners should have more flexibility on deciding what, if any, fund to invest in.

However, according to the Postimees piece, after the low of the 2009 crash, pension funds had their best year ever, with the top four-performing funds being from among the 23 pension pillar funds available.

Top of the list was Swedbank's K1990-1999 fund, which saw a 27.4 percent return.

At total of 36,000 fund investors had chosen index funds – about five percent of the total of people in the second pillar, according to the piece.

The original piece (in Estonian) including figures for all 23 pension funds is here.


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Editor: Andrew Whyte

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