New pension law discriminates pensioners

The Baltic Times, TALLINN
By Kairi Kurm
Aug 27, 1998

The Estonian Pensioners Union is not satisfied with the pension insurance law approved on June 26.

Hilja Kukk, deputy chairwoman of the Pensioners Union, said the law discriminates the pensioners and does not improve their conditions.

The new pension law consists of three parts, which Kukk calls “crutches,” state pension insurance, voluntary pension insurance and obligatory collection principles.

The law is supposed to ensure future pensioners will receive a higher pension by collecting extra revenue in a pension fund. The law stipulates pensioners should receive a pension that is in accord with the salary.

The pension insurance law that will be adopted by 2000 will take into account the pay people received before the law came into effect.

“This means that a cleaning woman and a professor receive the same pension although the contribution of an educated person to the society has been bigger. The explanation was that converting pays from Russian rubles to Estonian kroons is difficult,” says Kukk.

According to Kukk, the new law does not apply to people born before 1957, and their life is poor as they receive an allowance instead of the pension.

“An allowance is much smaller than an average pension. An average pension is about 1,200 kroons ($83) but most of us receive allowances less than 1,000 kroons,” says Kukk.

There are 370,000 pensioners in Estonia, 300,000 of whom are old-age pensioners and the rest receive subsidies of different kinds.

Kukk said the new law contradicts the constitution because everybody should be equal according to the law and nobody should be discriminated against.

“The pension insurance law puts most of the pensioners and those near retirement in an unfair position compared to other citizens and discriminates them by their age,” Kukk said.

According to the current pension law, the pension of those already in retirement is not linked to the pay they received when working, unlike pension laws adopted in 1926 and 1956. Those laws foresaw an old-age pension which was only 55 – 90 percent of the previous salary.

According to Kukk, MPs have set themselves a pension that is 75 percent of the previous salary, which is about 10,000-16,000 kroons a month.

Kukk compared this to the average salary, which in the second quarter was 4,255 kroons.

This means that there are two different pension laws in Estonia, one for the ordinary people and the other for MPs, Kukk said.

Pensioners’ unions claim that they were not able to stop the approval of the law, which was signed by the President on July 8 despite protests from several parties. Parliament approved the act on June 26 with 51 votes, with one MP voting against and one abstaining.

Now pensioners are taking further steps to fight for their rights.

The Estonian Pensioners Union delivered a petition to the Chancellor of Justice Eerik-Juhan Truuvali demanding that the law be amended so that it would be in accord with the constitution.

They also noted that the law, which was prepared according to the German pattern, does not take into account Estonian circumstances and the fact that Estonia has lived differently for 50 years.

Hilja Kukk claims that the contribution of the people on whose account the nation and culture has continued has been forgotten and their opinions have not been asked when adopting a new pension law.

“The Estonian Republic misses a social program,” says Kukk. The chancellor agreed that there are some problems in the new law and promised to give a final answer by September.

A group of pensioners at the same time have been collecting signatures in order to launch a campaign against Estonia’s EU aspirations if Estonian leaders refuse to bring Estonian pensions up to the average European level and change the pension law.

Although the Pensioners and Families Party is not fully satisfied with the new law, the representative of the party Uno Veski believes that raising the pension to the European average is difficult as the country’s GDP per capita is low and the number of taxpayers is declining fast.

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