From Wednesday, July 1, the state will suspend contributions to the second pension pillar at the expense of social tax. From October, people can also stop making a 2 percent payment of their salary to the second pillar.
The Ministry of Finance said the state hopes to save €142 million by suspending the contributions this year and €211 million next year.
The contribution made at the expense of the social tax, the 4 percent payment by the state, will be suspended from July 1 this year until August 31 next year. The exception is for people born between 1942 and 1960, for whom second-pillar contributions continue to be paid as usual.
Those wishing to opt-out of the deposit themselves in October must submit an application in the autumn. For people who do not want to give up contributions to the pension pillar, everything will continue as usual, i.e. 2 percent of a person's gross wages will continue to go to the second pillar fund.
People who continue to pay 2 percent during this period will be compensated for the suspended 4 percent with a return in 2023-2024.
If desired, payments can also be suspended by people who were born between 1942 and 1960, in which case they will also have their 4 percent tax, i.e. payment at the expense of social tax, suspended.
The government decided to suspend contributions to the second pillar of the pension as part of the economic measures caused by the coronavirus crisis.
Editor: Helen Wright