Chairman of the Riigikogu Social Affairs Committee Tõnis Mölder (Center) says that the Center Party will fight for an extraordinary pensions hike at state budget deliberations which goal would be greatly aided if the Supreme Court found the second pension pillar reform constitutional.
"We are talking about a core election promise for Center and it is important to keep moving forward here despite last year's record pension hike and the economic crisis today," Mölder says in a press release.
He says that the coronavirus emergency situation impacted pensioners' security and that one way to help the elderly is to boost pensions. "If one of the goals of the state budget strategy is to liven up the economy, pensions contribute to consumption. Forecasts suggest that next year's indexation of pensions will be modest at best and that the only possibility to hike pensions is to do it extraordinarily," Mölder says.
The social affairs committee chair adds that the Supreme Court dispute over the constitutionality of the government's second pillar reform has an important part to play. "The money this would free up is meant primarily for boosting the prosperity of pensioners today and a positive ruling would certainly provide an advantage," the politician says.
Mölder admits regarding state budget talks that finding ways to cover new expenses is problematic as merely hiking pensions by €25 would require an additional €60 million.
Pension indexation takes place on April 1 and only if the pension part of social tax receipt and the consumer price index grow. This means that while pensions will automatically grow as a result of indexation, they cannot be lowered if the economy is ailing.
Data from the Social Insurance Board reveals that the average pension was hiked by 9 percent or €45 on April 1 this year as a result of indexation and an additional extraordinary hike.
Editor: Marcus Turovski