President of the Riigikogu and former Minister of Social Affairs Eiki Nestor (SDE) said on Tuesday that it was currently hard to say how realistic the implementation of the Pro Patria Party's proposed pension reform would be. One aspect of which he was sure, however, was that pension savings cannot go toward paying off quick loans.

"Now that is stupidity squared," Nestor told ERR on Tuesday in response to Pro Patria Party chairman Helir-Valdor Seeder's suggestion that funds freed up by a reform of the second pension pillar could be used by people to pay off debts such as SMS loans, also known as quick loans.

"If we give people the right to make more decisions than they do today, that they can choose between various funds based on a fund's risk level as well as administrative fees charged by the fund, then I have nothing against that," he explained. "But SMS loans, dear friends, will not be paid off at the expense of our pensions."

He also found that it wasn't right that people can withdraw this pension money from their investment accounts prior to retirement. "Then this money will be spent first, and they will have nowhere to get this money during their pension, and that is not the point of the second pillar," Nestor explained. "The point of the second pillar is the exact opposite — that someone retires and then they have some kind of income."

Over the course of the decades during which an individual accrues funds in their pension accounts, dozens of situations can arise in which they desperately need the money, and if there is nowhere else to take it from but pension savings, then that is where it is taken from. "And they may regret later that it was taken from there, but it has already been taken," he added.

Generally speaking, Nestor considers Pro Patria's current proposal to be much calmer than Seeder's original proposals. He noted that the current plan likely wouldn't mean any big, significant changes, but he questioned the practical aspect of how it could be done.

"We tend to forget that pension funds differ from regular investment funds in that requirements are stricter and that it is important that the money is preserved," he noted.

He stressed that the money in second pension pillars has been preserved, however. "All those flashy words about how it has all disappeared are an unseemly lie," Nestor said. "What are you gonna do when people lie to support their ideas?"

Neivelt: Estonians know what to do

Businessman Indrek Neivelt, meanwhile, finds that Pro Patria's initiative is reasonable and that Estonian people would benefit from it.

"This is a very statesmanlike step, and in the right direction," Neivelt told ERR. "I don't have a single bad thing to say; only good. Pro Patria's proposal is a big step in this field, and something for political parties to discuss."

He was unable to comment, however, on what the pension reform may end up looking like as it makes its way through the Riigikogu.

"That is uncertain," Neivelt said. "But it would be right for someone to be able to use the money they have accrued and pay back their loans. The state is forcibly pushing people's pensions into the second pillar, but if they have unpaid loans at the same time, it would be reasonable to erase these loans. People would have it easier, it would be a good step for their incomes, and also serve as a stimulus to the economy.

He added that Estonians are generally responsible people, and that payments into the second pillar should be voluntary. "The typical Estonian saves money and raises children, and they do not need to be taught what to do by 101 smart people from the Riigikogu."

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