Survey: 38 percent of people would withdraw second pillar funds ({{contentCtrl.commentsTotal}})

Were the second pension pillar to be rendered voluntary, 45 percent would retain the pillar and 38 percent withdraw pension assets.
Were the second pension pillar to be rendered voluntary, 45 percent would retain the pillar and 38 percent withdraw pension assets. Source: Images Money/(CC BY 2.0)

Thirty eight percent of people who have joined mandatory funded pension or the second pillar of the Estonian pension scheme would withdraw their pension assets, and 45 percent would continue saving in the pillar were funded pension to be rendered voluntary," a survey commissioned by ERR and carried out by pollster Turu-uuringute AS finds.

President Kersti Kaljulaid said on Friday that she will be taking the pension reform constitutionality dispute to the Supreme Court. A fresh survey commissioned by ERR and carried out by Turu-uuringute AS found that were joining and leaving the pillar to be rendered voluntary, 45 percent would retain their second pillar funds - referring to employee contributions - and 38 percent take the opportunity to withdraw pension assets.

21 percent of respondents would invest the money themselves, 8 percent would use it to pay off loans and debts, 6 percent would save the money for a "rainy day", while 3 percent of people would use it to purchase something.

Looking at sociodemographic indicators, Estonians seem to have more faith in mandatory funded pension than non-Estonians as 48 of Estonians said they would remain in the II pillar versus 31 percent of non-Estonians.

The latter more often prefer to use the money to pay off loans and debt (13 percent), while only 6 percent of Estonians would. Non-Estonians also include more people who would use the money to buy something (5 percent vs 2 percent in the case of Estonians).

Attitudes depend on income and education level

Keeping in mind that Ida-Viru County has relatively more non-Estonians, Northeast Estonia has the fewest people (29 percent) who plan to move forward with the II pillar. In other regions, over 40 percent of people would opt for staying put.

People with an above average professional status, such as entrepreneurs, executives and top specialists, tend to favor remaining in the II pillar (51 percent) compared to people who stay at home, are unemployed and less active (29 percent).

The higher a person's level of education, the more likely they are to continue saving in the second pillar – 48 percent of people with higher education, 42 percent with secondary education and 32 percent with basic education.

Supporters of the second pillar are most numerous in the 37-49 age group (48 percent).

Attitudes by party affiliation

Based on people's preferences of political parties, voters of the Social Democratic Party (63 percent), Reform Party (59 percent) and Estonia 200 (60 percent) are more likely to continue saving.

45 percent of Isamaa voters would remain in the second pillar, 34 percent of Center Party voters and 33 percent of EKRE voters. Voters of the Conservative People's Party (EKRE) tend to include more people who would withdraw pension assets to invest them independently (38 percent), while Center Party voters are most likely to save for a "rainy day" (14 percent).

ERR has commissioned the survey three times, with results having remained more or less consistent. 43 percent of people said they would continue saving in the second pillar in May of 2019, down from 47 percent in September 2019. The result from March this year is 45 percent. Last fall, 39 percent of people said they would withdraw assets, down one point to 38 percent now.

Use of second pillar assets once retired

People who were planning to leave the money in the second pillar were also asked what they would do with the money were they free to use it once retired.

The share of people who are planning to withdraw the money in bulk has grown, up from 26 percent in September 2019 to 33 percent in March 2020.

42 percent of those questioned plan to make use of pension payment services offered by life insurance providers or pension funds in that case (fixed-term or lifelong pension).

Turu-uuringute AS questioned over 1,000 people between March 5 and March 16, with 300 people interviewed face-to-face and over 750 online.

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Editor: Marcus Turovski

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