Ratas disagrees with coalition partner, says second pillar to remain

Prime Minister Jüri Ratas (Centre).
Prime Minister Jüri Ratas (Centre). Source: Priit Mürk/ERR

Prime Minister Jüri Ratas (Centre) disagrees with Pro Patria chairman Helir-Valdor Seeder, who floated the idea on Thursday to make mandatory payments into Estonia's second pillar pension fund voluntary, and eventually abolish it completely. Any such step would make a tax hike inevitable, Ratas argued.

"In our ageing society, accumulating funds for pensions is definitely necessary, because otherwise we would have to significantly increase the tax burden of future generations even if we want to maintain the present wages and pensions ratio," Ratas wrote in a social media post on Thursday. "The second pillar as part of the state pension definitely has to remain," Ratas added.

Pro Patria's chairman, Helir-Valdor Seeder, one of the Centre Party's junior partners in the coalition, told ERR on Thursday that making the second pillar voluntary will be one of his party's campaign promises. He added that making payments into the second pillar voluntary would be a transitory stage before completely abandoning it.

Estonia's three-pillar pension system is made up of a state pension as the first pillar, mandatory payments into a pension fund as the second pillar, and voluntary pension fund payments as the third pillar.

The second pillar is mandatory for everyone born in 1983 or later. Under the second-pillar arrangement, two percent of a person's gross wage is paid into an individual pension account, to which the state also adds another 4% of an individual's gross pay.

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Editor: Dario Cavegn

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