Estonian Parliament passes pension reform

TALLINN -- The Riigikogu (Estonian parliament) has approved a controversial pension reform bill that will raise the retirement age to 65.

The State Pension Insurance Act was passed 50-40 amid protests outside the building.

The law will increase pensionable age for men and women to 65 years by 2026. In defense of the bill, Minister of Social Affairs Hanno Pevkur said the alternative would be to increase taxes, reduce pensions or bring migrant workers into Estonia.

Pevkur said that the law would ensure that pensions will grow in the future. He said that as the population ages faster, Estonia has no option but to increase pensionable age.

The government claims that raising the retirement age is a solution to Estonia’s demographic problem of an aging population and in the long term will reduce the pension system’s burden on the budget.

The bill foresees raising the pension age by three months per year until it reaches the new age bracket.