The Estonian government is to approve at a sitting on Thursday this year's value for the index of the national pension at 1.016, with pensions set to rise on average 1.6 percent as a result.
Pensions will grow by an average of 1.6 percent from April 1 following indexation, spokespeople for the government said.
The value of the index is calculated yearly to the extent of 80 percent based on the change in last year's social tax receipts and to the extent of 20 percent based on the change in the consumer price index (CPI). CPI fell 0.4 percent last year compared with the average of the preceding year and year-on-year growth in the pension insurance portion of social tax contributions was 2.1 percent, according to the Ministry of Finance. Following indexation, the national pension will total €225.18, the base amount of pension €219.30 and the value of a year of pensionable service €7.20.
Pursuant to an amendment to the State Pension Insurance Act, the base amount of pension will be additionally increased after indexation by €16 and the national pension by €30, bringing the base amount to €235.30 in total and the national pension to altogether €255.18. Following indexation, the old-age pension of a person with 15 years of pensionable service will increase to €327.40 and together with the additional increase in the base amount will total €343.40.
The estimated cost of the indexation of national pensions will amount to €23,712,000 this year and the indexation will concern some 321,000 pensioners. The total cost of increase in national pensions in 2021 will be €83,774,000 and the resources for that have been earmarked in the state budget.
The regulation will take effect from April 1.
Editor: Helen Wright