According to Ratas, the second pillar has to remain, while the third pillar would be for those who earn more and want to contribute. He noted that the government is planning to discuss a new pension reform bill in the next few days.

"I think that retirement should be more flexible, and the state's ability to pay pensions has to be sustainable," he added.

The prime minister added that the new reform could once again open up the opportunity to pay into the second pillar to those born between 1970-1982.

According to Ratas, who is also chairman of the Center Party, an extraordinary €100 pension increase will be one of the party's promises for the 2019 Riigikogu election. He said that the current old-age pension is not sufficient, as a considerable share of the elderly in Estonia live in relative poverty.

"As of this April, the average pension increased 7.6 percent, but indexation is not enough to ensure a dignified retirement," said Ratas. "An extraordinary pension increase is one of the main goals of the Center Party for the next Riigikogu election."

The Center Party has proposed that the average old-age pension should increase by €100 with indexation in 2020. Specific sources of funding to cover the increase would be worked out when drawing up the party's election platform, he added.

Ratas also noted that the agenda for Thursday's government meeting includes improving the current pension system. "We want to make the currrent system fairer, more flexible and more financially stable," he said, adding that economic inequality should not extend into one's retirement.