Estonia's pension system rests on three pillars: the state-funded first pillar, the previously mandatory funded second paid from social tax and gross salary, and the voluntary third (private pensions plan).

Second-pillar contributions became voluntary in 2021, and about a third of savers withdrew their funds following the changes, with the first major wave in September that year.

Applications to resume contributions can be submitted and were open from November 1. Those who left in the first wave can begin making contributions in May 2027; the rule is that five years must elapse between leaving the pillar and restarting .

Commenting on how things have developed since 2021, Heidi Reinson, a researcher in economic behavior at the University of Tartu, said: "There were more people who had no other savings, such as a third pension pillar or other financial reserves. Among them were many people who had high-interest payday loans hanging over their heads, as well as large families. But what is perhaps most interesting is that trust in the state, the financial sector and the media was much lower among those who left the second pillar."

A third of the withdrawn money went on loan repayments, while nearly a fifth went straight into consumption. On the latter, Reinson recalled anecdotal stories of televisions bought at the Ülemiste mall which were too large to fit into taxis.

A year after the reforms, half the money was sitting in people's current accounts.

Pension fund assets currently total €8 billion, but without the withdrawals they would amount to €11 billion. Age Petter, head of Swedbank Investment Funds, noted someone earning the average salary had accumulated just over €8,000 by 2021 — but would now have seen that grow to around €20,000 had they not withdrawn.

Investor Kristjan Liivamägi said the state adds €80 for every €40 a person contributes. "If we take the average Estonian earning a gross salary of €2,000 a month, then two percent of their salary goes into their second pension pillar. That's about €40. The state adds another €80 from social tax," he said. A 45-year-old on that salary would accumulate around €63,000 by retirement, assuming no salary growth and returns of about 7 percent a year.

Reinson warned of a longer-term consequence: a wealth gap between savers and non-savers. "People regret not having saved, and then that wave of regret will be even stronger. Then you see that your colleague, who has been earning the same average salary as you, is in a much better position when they retire," she added.

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