A survey by Luminor on the topic of Estonian pensions showed that nearly half of Estonians are not sure what the general pensionable age in Estonia will be by 2026. At least a quarter to half of Estonians are wrong about different facts pertaining to the II pension pillar and the pension system in general.

The results show a certain paradox, according to Martin Rajasalu, Member of the Management Board of Luminor Pensions Estonia. “On the one hand, people are ready to invest their pensions independently; on the other hand, they do not know where the current investments are made, or how the current pension system works exactly,” said Rajasalu.
 
“The initial effects analysis that was published by the Bank of Estonia on Monday, showed that Estonians’ saving behavior is also defined by low level of diversification and reluctance to take risks when investing. This combined with relatively little knowledge and experience in investing can increase risk of poverty,” added Rajasalu.
 
Results of the survey showed that 40% of Estonians are unaware of the fact that units of the II pension pillar can be transferred to another management company for free. However, 69% of people also responded correctly to this statement, which shows that 9% of people gave contradictory responses. 
 
The question concerning the general pensionable age received the most wrong answers. The retirement age will gradually rise and reach 65 by 2026. However, 46% of survey participants thought that the retirement age will have risen to 69 by 2026.
 
Estonians are also not familiar with the investments of their II pillar pension fund. More than half of the respondents were unable to say whether their II pillar pension fund invests in real estate (59% of respondents), in fields with great future potential (57%), or avoids investment in industrial sectors that have questionable ethics and are harmful to the environment (53%).
 
Nearly half of the respondents do not know, for example, whether their II pillar pension fund avoids investing in authoritarian countries that violate human rights (50 per cent); whether their fund invests in Estonia (49 per cent) or in European Union member states (46 per cent); or diversifies investments to keep risks low (45 per cent).
 
Almost a third, i.e. 31% of people were not aware that income tax is refundable on payments made into the voluntary III pension pillar.

The survey responses were collected using a quantitative web survey in June and July of this year. The aim was to clarify people’s opinion of the national pension system, and to better understand the expectations and attitude of these people regarding pensions. The survey involved 1599 people among the clients of the Luminor Pensions Estonia II pension pillar.