Last year, pensions were disbursed without issue in only one month. So far this year, that hasn't happened at all. On May 5, officials barely managed to complete pension and benefit payouts by the skin of their teeth.

"On May 1, we started work around four in the morning and didn't finish until a quarter past one at night. Then we began again before 5 a.m. on May 2. We came very, very close to a total collapse — where we wouldn't have been able to make any payouts at all. Altogether, we got about six hours of sleep in 48 hours," said Kristina Pähkel, head of the development department at the Social Insurance Board (SKA).

According to Pähkel, the first days of May brought an unprecedented number of technical issues, posing a real risk that the agency would not manage to transfer pension funds to banks on time.

The distribution of pensions and benefits relies on two information systems called SKAIS, one of which is 25 years old and the other eight. These systems have had recurring problems for years. The situation became critical in 2023, when changes to income tax exemptions for pensioners and adjustments to family benefits required major system upgrades. In recent years, the Social Insurance Board has repeatedly warned policymakers that the situation is dire.

"All four governments I've served in as minister have been aware of the situation, but despite that, no solution has been found," said former Minister of Social Protection Signe Riisalo (Reform).

According to Riisalo, SKAIS is not only outdated but overloaded, as more and more responsibilities have been added to it over the years. Most of the funding allocated for system development has gone toward implementing legal mandates rather than upgrading the core system. Riisalo questioned how the money has been used so far.

"The money I managed to secure for the sector has melted away like spring snow, and I haven't seen results to match, which as a minister raised serious concerns for me," she said.

As resources have been poured into meeting new legal obligations, little has been left to maintain the foundational system, resulting in a massive technological debt.

"Every new development that goes into production needs maintenance funding to ensure it remains sustainable — that all bugs are fixed, security updates applied and small improvements made over time. But that consistent funding has been lacking for years," said Margus Arm, head of TEHIK, the Health and Welfare Information Systems Center.

To illustrate, it's as if the state bought a new car eight years ago but hasn't budgeted for maintenance — because it still runs. Sure, a little money has been allocated, but just enough to buy windshield washer fluid.

Last spring, the national exams information system crashed. Now, SKAIS — a system responsible for distributing roughly a third of the national budget in pensions and social benefits — is running on fumes. And SKAIS is not alone, other outdated IT systems face similarly large technical debts.

"One of the most critical is the population register, which is a cornerstone of our digital state. It's several decades old and in desperate need of a full reboot," Arm said.

Andres Aavik, CEO of the software firm Flowit, said the root of these problems is the state's poor project management.

"Many state information systems are built on a flawed model: we put all the money on the table up front and assume the system will function perfectly for the next 15 years, meeting all future needs. In that sense, the Estonian public sector has seriously missed the mark," Aavik said.

Large information systems funded by EU structural funds typically receive no money for maintenance or further development.

"Annual maintenance and development should ideally be budgeted at 20 percent of the system's initial investment. Even 10 percent would be decent. But what we have now is a major upfront investment — and then nothing. We just pay to keep the server fans running," Aavik said.

According to Aavik, this technological debt has accumulated not only due to lack of funding but also because of time constraints. While legal drafts undergo legal review, there is no analysis of how long it will take to implement the necessary IT solutions.

TEHIK and SKA estimate that bringing IT systems up to par over the next five years will require €25-30 million. Whether that money will be found depends on the next coalition agreement. But what happens if it isn't?

"With every passing month, the risk increases that pensioners and social benefit recipients won't get their money in their bank accounts on the fifth," Pähkel warned.

In contrast to the state's ongoing failure to get its house in order, many seniors seem to manage their finances just fine.

"Every responsible pensioner keeps at least a couple of months' worth of pension saved up and gets by just fine. Those who complain just don't know how to manage their money. Or maybe they just like to complain," said Malle.

"There are people who always complain, no matter what the issue is," added Lilia.

Around 320,000 people in Estonia receive a pension and there are nearly 100 different types of pensions.

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