Pension reform bill Supreme Court hearing starts Tuesday

The  Supreme Court building in Tartu.
The Supreme Court building in Tartu. Source: Supreme Court of Estonia

The Supreme Court is to sit en banc Tuesday to hear President Kersti Kaljulaid's request to declare the government's pension reform bill unconstitutional.

The president rejected the bill, which would make membership of the so-called second pillar of the Estonian pension scheme optional, for the second time on March 20.

The president has the constitutional right to decline to sign bills into law, returning them to the Riigikogu in the first instance, and referring it to the Supreme Court, based in Tartu, if any changes made are not amenable to her.

Justice chancellor Ülle Madise represents the Estonian state in such cases. The last bill to appear before the Supreme Court was the law aiming to cut excise duties on alcohol, a little over a year ago. The court upheld the bill and the cuts passed into law.

The second pillar refers to employer/employee contributions to pension funds, as distinct from the first (state pension) and third (private pension schemes) pillars. Membership of the second pillar has been mandatory for most wage earners since 2010.

Supreme Court spokesperson Kristi Kirsberg told ERR that the court's ruling is due in the fall.

Parties at the hearing and their representation

The president, whose office has generally relied on the private sector for legal counsel, is represented by sworn advocate Madis Päts, Director of the Office of the President Tiit Riisalo, and departmental deputy head Mall Grämberg.

The Riigikogu is represented by chair of the finance committee, Aivar Kokk (Isama), Kristo Varend, advisor to the committee, and Reform MP Andres Sutt, who also sits on the finance committee. Isamaa is in office – the second pillar reform was that party's brainchild ahead of the March 2019 general election – and Reform is in opposition.

The office of the Chancellor of Justice is represented by advisers Evelin Lopman and Kristi Lahesoo, head of the social rights department Kärt Muller, and justice chancellor Ülle Madise herself.

The government is represented by finance minister Martin Helme (EKRE) and lawyer Paul Keres.

The Ministry of Justice is also represented, by justice minister Raivo Aeg (Isamaa), and lawyers Paul Keres and Artur Sanglepp.

The central bank, the Bank of Estonia, is represented by its president, Madis Müller, and departmental heads Marek Feldman, Martti Randveer and Kadri-Liis Raun.

Auditor General Janar Holm, board chair of the Financial Supervision Authority Kilvar Kessler, head of the Estonian insurance companies association Mart Jesse, and lawyer Veiko Veske are also taking part.

The hearing starts at 1 p.m. Tuesday and runs till approximately 4 p.m. ERR's online news in Estonian will be livestreaming the hearing.

The Supreme Court en banc consists of all 19 judges, with a quorum attained if 11 or more justices are present. The court has opted to hear the case via oral proceedings, favored when there is public interest and a requirement for the broadest possible picture of the possible outcomes of any court decision.

Timeline of the dispute

The Pension Reform Act passed the Riigikogu on January 29 this year, by 56 votes to 45. The government linked the vote to a vote of confidence, reportedly to avoid further delays by the opposition.

The president rejected the law, citing six constitutional violations, mainly revolving around unequal treatment of those who remained in the pillar versus those who opted out or who were never in it, and sent it back to parliament.

The bill was readopted at the Riigikogu on March 11 with no substantive changes, with the president rejecting it a second time on March 20.

Constitutional institutions have also sent their opinions to the court.

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Editor: Andrew Whyte

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