SDE chair: Government's pension bill lacks answers to most basic concerns
The government's pension reform bill lacks answers to even the most fundamental questions regarding future pensions, said Indrek Saar, chairman of the opposition Social Democratic Party (SDE).
"The bill, which was made public on Wednesday, doesn't say a word about how pensions will be paid in the future or what happens to the people who stop saving up for retirement when they get old," Saar said. "Who will support pensioners in 20 and 30 years if a large share of pension assets are soon to disappear? Our children and grandchildren? Or will a large number of migrant workers be the solution?"
The SDE chairman said that the initiators of the bill presume that lower income earners will be the keenest to withdraw their savings and also immediately spend them. From their perspective, it might b completely rational to make use of these savings by covering urgent current expenses, however, the share of savings held by these people is small, the bill's letter of explanation reads.
"The government thus wants to get the consumption party started, not knowing what the mass abandoning of the second pillar fun will mean in the long run for our pension system and economy, as well as for our people and the future of Estonia," he commented.
The government will tax people who withdraw their funds from the second pension pillar, however, pursuant to the bill, payouts would be subject to income tax, Saar said.
"[Prime Minister] Jüri Ratas' government works like a gambler," he continued. "The Estonian state is not a casino. It is our duty to build a strong, safe and sustainable state for future generations as well, rather than make decisions at their expense."
While the Social Democrats are in favor of making the pension system significantly more flexible, they reject the plan aimed at dismantling it.
"In the name of short-term political gain, the coalition wants to sacrifice the lowest earning people as well as our children and grandchildren, who will be forced to bear an unaffordable tax burden," Saar concluded.
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Editor: Aili Vahtla