Mr. Lauri Leppik is a social policy analyst at the PRAXIS Center for Policy Studies. Formerly he has been a Deputy Director of the Estonian Social Insurance Board, an Advisor of the Ministry of Social Affairs and a Member of the Social Security Reform Commission, responsible for the elaboration of the pension reform and unemployment insurance.

Abstract of the speech:

Estonia launched a three-pillar pension reform in 1997. The pre-funded privately managed second pillar was established in 2002, being compulsory for new entrants to the labour market, while optional for all other workers. In spite of the optional element, the second pillar participation rate increased rapidly, reaching over 50% of the work force. However, the high participation rate entails increasing transition costs for the Government. The presentation will look into the factors behind the success of the reform and investigates the ways to finance the transition.