Second pillar pension fund payments can be temporarily suspended in October ({{contentCtrl.commentsTotal}})

€200 bill.
€200 bill. Source: Siim Lõvi/ERR

The Estonian state suspended its 4 percent pension payments into the second pillar made from social tax from July 1 this year until August 31, 2021, however, the 2 percent individual payment made from salaries will continue automatically if an application for its temporary suspension in October is not submitted.

Minister of Finance Martin Helme (EKRE) said the temporary suspension of payments to the second pillar and the reform of the second pillar are different things. "Anyone wishing to suspend their 2 percent payment for nine months can do so in October, but this is temporary," he added.

Anyone who wants to continue collecting does not have to do anything. Everything automatically goes on as before - 2 percent of a person's salary is directed to the pension fund of their choice.

Those who wish to suspend their payment for nine months from December must submit a corresponding application to the registrar of the pensions register or account operator during October.

It is advisable to think carefully before submitting the application as it will no longer be possible to change one's decision after submitting the application.

People born in 1960 and earlier who joined the second pillar and were not affected by the suspension of the 4 percent contribution by the state from July can also apply to suspend their payment.

In this case, the suspension of one's own 2 percent payment will also be accompanied by the suspension of the 4 percent contribution by the state until the end of August 2021.

According to everyone's contribution, the 4 percent payment suspended in the meantime will also be reimbursed in 2023-2024. Compensation will take into account how much a person made 2 percent payments between July 1, 2020, and August 31, 2021, so that their 4 percent payments were suspended at the same time.

If the average return of the second pillar funds is positive from July 1, 2020, to December 31, 2022, the amount to be transferred to the second pillar shall also increase by the average return. Compensation will not depend on whether the person will be working in 2023 and 2024 and will make contributions to the second pillar in the usual way.

The additional contributions of the parental pension will not be affected by the changes, they will continue to be made in the usual manner. The change also does not affect those who already receive a pension from the second pillar and therefore no longer make payments.

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Editor: Helen Wright

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