We have one of the lowest real rates of returns among all OECD countries.
Nominal yields are appr. 2 times lower than in Finland.
Macro level: Losers from the 2. pillar
Pensioners (last 17 years): appr. – 10% (At the same time risk of poverty is the highest in EU)
Estonian economy: 1+% from annual GDP has been taken away from consumption and invested
For most of the people 2. pillar impact on their pensions is 0
Pension funds give the wrong signal to the society.
On macro level it is important to compare yields with economical growth not with inflation.
It is very challenging to get higher return than the nominal GDP growth.
Ownership and conflict of interests: fund managers maximized their own profit.
Overregulated: restrictions in the law and nobody has been responsible after the launch.
How to make it work?
Voluntary not mandatory.
Only mutually owned (ühistud) or state-owned funds.
Less restrictions. More power and responsibility to pension fund managers.