The pension reform that has been approved by the Riigikogu on two occasions is nearing its final act. Let us hope that we will have clarity in terms of whether the largest reform after the pension system was created can go ahead in 2021 before October ends, Sven Sester writes.
The constitutionality of the reform has been the subject of long arguments. However, those held over the past six months have not changed my position. The pension system is already so unfair that creating equal opportunities for everyone, irrespective of their age and income, will help compensate for past discrimination.
The United Kingdom's "Iron Lady" Margaret Thatcher has said that there can be no freedom without economic freedom. The right to be responsible for and govern one's property gives a person freedom and independence that are needed for realizing other rights and obligations.
This should be kept in mind in pension reform debates. Money people have saved up in their second pension pillar is theirs and people need to have the right to decide its use.
We are awaiting the Supreme Court's decision (concerning the reform's constitutionality – ed.) in the middle of the century's largest financial crisis. Despite decisions by all governments to liven up the economy with loan money during this difficult time, we can see that this aid does not reach everyone.
Unemployment is growing and this affects tens of thousands of families all over Estonia. States can adjust using loan money – all European countries will see their loan burdens grow in the coming years.
However, how will Estonian people and families cope? A person who has lost their income usually does not qualify for a loan. What are their options? Savings help one get by for a few months. But people also have additional resources in their second pension pillar. Money they cannot use because the state has made it clear that a slightly bigger pension (a few dozen euros a month) in 20-30 years' time is more important than taking care of their children today.
The state has afforded itself flexibility while placing people over a barrel.
I'm not urging people to spend their money. On the contrary, I urge you to be responsible, while we should all have flexibility and the opportunity to adjust to unexpected situations.
It is somewhat peculiar today to look at last year's forecasts of pension fund yields over 50 years without a single recession taken into account. Forecasts are important as decisions cannot be made without them. At the same time, life always makes adjustments in forecasts.
The crisis today clearly shows that all systems need to be flexible enough to adjust to the unexpected. State coercion forcing people to keep their money locked in an inefficient system does not afford that flexibility.
Editor: Marcus Turovski