Paper: 12,000 people applied to opt-out of pensions second pillar so far

The second pillar refers to employer/employee pension contributions, and membership will be voluntary from next year. Source: Priit Mürk/ERR

Around 12,000 people have so far applied to take out funds from the Estonian pension scheme's second pillar, Õhtuleht writes.

Applications for withdrawals have been open since the beginning of the year following a 2019 legal change which allowed opting-out from the second pillar, referring to employer/employee contributions.

Board member at the Pensions Center (Pensionikeskus) Kristi Sisa told Õhtuleht (link in Estonian) that as of the end of 2019, around 766,000 people had second-pillar pension funds.

A fall 2019 survey found approximately 215,000 people, or 28 percent of the total, would withdraw from the scond pillar once that was possible.

Membership of the second pillar had been mandatory for most wage earners from 2010. Proponents of making second pillar membership optional - a central policy plank of the Isamaa party - say that the previous, mandatory system had made use of funds which performed below the market level. Opponents said that the change will lead to an unequal pensions system.

The first pillar of the Estonian pension scheme refers to the state pension; private pension schemes come under the third pillar.

Those who apply to leave the second pillar between January 1 and March 31 this year will get their money in one lump sum in September. Those who apply from April 1 to July 31 will get theirs on January 1 2022, and between August 1 and November 30, in May next year.


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Editor: Andrew Whyte

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