The retirement age is already above the average life expectancy for Estonian men; the government's proposal would increase the gap by two years. Photo by Kirjutas Liina.
TALLINN — Estonians may end up literally working themselves to death under a new government proposal to increase the retirement age to 65, exceeding the life expectancy of men by five years.
The government is trying to counteract the effects of Estonia’s aging population on the social security budget by increasing the retirement age, arguing that too many people on retirement benefits with a small workforce isn’t sustainable. Estonia’s population is aging and shrinking. The birth rate has not exceeded the death rate in any year over the last decade.
If the proposal is passed the retirement age will be extended incrementally three months every year, starting next decade until the retirement age reaches 65 in 2024. The current law says that workers retire at the age of 63, but an exception is made for women who were born between 1944 and 1952.
“The main argument is that the raising of the retirement age doesn’t happen overnight. The people close to retirement shouldn’t be afraid,” Raul Allikivi, economic policy division chief at the Ministry of Economic Affairs and Communication told Baltic Reports.
Allikivi and along with representatives of the Ministry of Finance assert that this is the most viable way for the country to have a sustainable pension system.
“Like in all of Europe we have an aging population and we also have more healthy people now with better medical system,” Allikivi said. “If we want to have a pension system that is sustainable, this is essential.”
Estonia’s Auditor General Mihkel Oviir is a keen proponent of the rise in retirement age, arguing that the rise is very reasonable.
“Our problem is, after all that, the ratio of workers and pensioners are totally out place. We need much more taxpayers,” Oviir said in local media adding that many people chose to retire before the regular age and that the state has to find a way to ensure that people continued working.
Social affairs minister Hanno Pevkur supports the reforms and said that the European Union’s Barcelona Summit in 2002 determined that Europe needs to set the retirement age at 65 years.
Systemic health care problems
Those choosing to work past the retirement age have a troubled medical system keeping them fit for labor.
Waiting times on surgeries can drag on for years. This year the maximum waiting time for patients needing non-emergency care rose from four to six weeks, but this is often exceeded. Also, doctors working for the state now earn less due to budget constraints, a fact which medical professionals fear will send doctors abroad.
A recent release from Statistics Estonia showed that the country has the lowest healthy-life expectancy in the European Union and the male life expectancy is only slightly above the other two Baltic states in third to last place.
Allikivi said that the life expectancy isn’t important when making considerations about the retirement age.
“The average life expectancy is not very high because the risk age brackets are when they are in their 20s and their 50s. When you pass these periods you are expected to live much longer. If you make it this far, you have survived,” he said.
The change in retirement age accompanies a slew of reforms in government policy aiming to make the country’s finances sustainable and economy competitive.
