SEB Bank CEO: Withdrawing Second Pillar Pensions Undermines Trust and Endangers Future
SEB Bank CEO Ieva Tetere warns that the proposed referendum to allow withdrawal of second pillar pension savings could have serious economic and social consequences, especially for lower-income individuals.
Ieva Tetere, CEO of SEB Bank, has voiced strong criticism of the initiative to hold a referendum on withdrawing funds from the second pillar pension system. She argues that such a move would break intergenerational solidarity and erode trust in the state, which is essential for the economy and the sustainability of the pension system.
Tetere emphasizes that the second pillar is a long-term savings vehicle that grows significantly over time due to compound interest. For example, a 35-year-old with €23,000 in savings could see that grow to over €200,000 by age 65, providing a monthly supplement of more than €900. Withdrawing the money now would forfeit both the principal and future returns.
The impact would be particularly severe for lower-income individuals, who would be most tempted to spend their savings and who rely heavily on this supplement in retirement. Wealthier individuals, in contrast, could manage without it. This would place an additional burden on the state to support impoverished pensioners.
The second pillar currently holds savings for 1.3 million people, and a referendum requires approximately 154,000 signatures. Tetere agrees with Supreme Court judge Marika Senkāne that the draft law is poorly argued and its consequences have not been assessed. She also responds to criticism that banks benefit from the system, noting that managing second pillar funds accounts for only 1.5% of SEB's operating revenue, and that banks have an interest in a prosperous state.
Tetere calls on politicians to act responsibly regarding people's futures and on second pillar participants to carefully consider whether it is worth sacrificing long-term savings for short-term gains.
