State to compensate pension payments into second pillar ({{contentCtrl.commentsTotal}})

Euros. Source: (Marco Verch/Wikimedia Commons)

From July 1 this year to August 31 next year, the state payments into the second pension pillar would be halted but those who continue paying in two percent will be compensated.

The draft stipulates that the state will stop temporarily payments from social tax into the second pension pillar, with the exception of people born between 1942 to 1960, to whom regular payments apply until the end of November.

In October 2020, everyone who has joined the second pillar of the Estonian pension scheme can decide whether to continue paying in two percent of their salary or not. If the choice is to not continue contributing, payments will be halted from December until August 31 next year.

Those who decide to continue making payments will be compensated for the halting of the four percent, Siiri Suutre, a spokesman for the Ministry of Finance, told ERR.

"Depending on whether the person files for halting payments in October 2020, six percent of their social tax will be payed into the second pillar during the next 10 or 28 months instead of four percent from January 1, 2023. 14 percent will be payed into the first pillar instead of the usual 16 percent," she explained.

People born between 1942-1960 are the exception here, as their payments into the second pillar will continue as per usual in 2020 and 2021.


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Editor: Anders Nõmm

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