December 18, 2009

ESTONIA: Bill approved to raise pensionable age to 65 years from 2026

. TALLINN, Estonia / Baltic Business News / December 17, 2009

By Toomas Hõbemägi

The government decided today to submit to the Riigikogu the bill under which pensionable age would be 65 years from 2026. According to the explanatory memorandum, the bill has two objectives: first, to increase the pensionable age since future pensioners must be certain that their pension is not smaller than current pensions or would be higher, if possible, and, secondly, to ease the pressure on the labour market as the number of people who are actively on the labour market continues to fall. Social minister Hanno Pevkur said in comment that MPs should discuss the bill quickly since any delay threatens to create a situation where it would not be possible to pay decent future pensions to people who at present are employed. Current forecasts show that in the next 50 years the number of employed will fall by 284,000 people in Estonia. Photo: ERR/Hanno Pevkur "This means that while today there are four persons in working age for every 65-year-old or older person, by 2030 we will have only three and in 50 years' time only 1.8 persons in employable age," noted Pevkur, adding that the state is saying to the people who today are in employable age that they would receive 40% of average wages, the generally accepted pension level, also after 2025. The bill applies on persons who today are younger than 50 years old. Those aged 50 to 56 at present who are due to retire between 2017 and 2026 will be subject to a transition period. All people older than 56 years of age will retire under the current procedure. Today the old-age pensionble age is 63 years for men and 60.5 years for women. In 2016 also the women's pensionable age will be 63 years of age. Starting from 2017, pensionable age would be gradually increasing by three months a year and by 2026 it would be 65 for both men and women. [rc] Toomas Hõbemägi E-Mail: Source: Baltic Business News