Tiit Terik: At least one reason for pensions hike

ELVL chief Tiit Terik.
ELVL chief Tiit Terik. Source: Anna Aurelia Minev/ERR

Old age does not necessarily have to come with poverty and it is high time to make a change and help the elderly live their twilight years to the fullest, Tiit Terik writes in a reply to Indrek Kiisler's comment "Extraordinary pensions hike not justified."

Indrek Kiisler said in Vikerraadio's daily comment that hiking pensions in the current economic situation is condemnable and wrong. That an extraordinary pensions hike is not justified and constitutes obvious flirting with voters.

Kiisler's train of thought is surprising. I could mention several good reasons for pensions to be bigger in my sleep and without needing in-depth analysis. I will not argue [with Kiisler's claims] that single mothers and people making modest salary are also struggling, while I cannot agree to the suggestion that pensioners need nothing further.

Pensioners are vulnerable because of their low income and I'm afraid will be for the foreseeable future. The claim that an elderly person's pension earned after a lifetime of work constitutes "safe income" or that prices have fallen do not provide grounds for satisfaction. It seems cynical to tell people that they are doing well as it is. Claiming that pensioners are doing well also depends on who one compares them to.

The income of Estonian pensioners is poor. The latest comparative data from the OECD (2015) suggests that pensions require 7 percent of the Estonian GDP, while the figure is over 11 percent in Finland and around 17 percent in Greece that is well-known for its generous pensions.

The situation has been improved in recent years and social protection is receiving more attention. I'm convinced that the extraordinary pensions hike in the spring of 2020 that amounted to €45 with indexation and was ridiculed by opposition politicians will improve the situation of the elderly. It also needs to be said that no prior government has managed to hike pensions by this much.

It comes as no news that poor pension throws the elderly into poverty. The OECD data offers a good picture of where our past decisions have led – Estonia is at the bottom of the pack [in terms of spending on pensions in GDP], ahead only of South Korea. The OECD average is 14 percent.

Estonia's figures really are poor: In 2018, over 43 percent of pensioners were living in relative poverty, putting almost every other retired person at risk of poverty. Nearly 80 percent of elderly persons living alone fell under the poverty line (€573.05).

Is that not reason enough to hike pensions? In addition to local governments, the central government has also tried to alleviate the situation of pensioners living alone by introducing an annual benefit.

Old age must does not necessarily have to come with relative poverty and it is high time to change the situation and help the elderly live their twilight years to the fullest. Today's average old-age pension (€529.9) is not enough to ensure a comfortable life, while the policy of recent coalitions suggests the situation is improving and that the older generation in Estonia will not have to suffer among the worst off in Europe in the future.

It is not about flirting with voters, it is about a dignified old age for our elderly.

Editor: Marcus Turovski

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